TTC drops Cintra, embraces NTTA

August 24, 2007

BY DANNY GALLAGHER, McKinney Courier-Gazette

The Texas Transportation Commission bid farewell Thursday to Cintra Concesiones de Infraestructuras de Transporte S.A’s bid for the State Highway 121 project.

Mark Ball, Texas Department of Transportation spokesman, said the TTC voted unanimously to cut Cintra’s procurement out of the SH 121 project and give more time to TxDOT to finalize its agreement on the North Texas Tollway Authority’s proposal.

“The commission has determined that it is in the best interest of the state to terminate the comprehensive development agreement negotiations with Cintra Concesiones de Infraestructuras de Transporte S.A. and to cancel the request for proposals for the development of the SH 121 project under a comprehensive development agreement,” according to the cancellation order passed Tuesday by the TTC.

The TTC also unanimously approved a minute order that authorizes TxDOT to enter into an agreement with NTTA on the SH 121 project and gives it more time beyond the 60-day deadline to reach an agreement, according to the minute order.

Chris Lippincott, TxDOT spokesman, said TTC’s decision completely removes Cintra from the picture.

“The bottom line is if we are not able to conclude an agreement with the NTTA, we cannot go back to Cintra,” Lippincott said. “Senate Bill 792 prohibits a CDA on this project.” Both measures were approved in order to comply with federal law violations levied by the Federal Highway Administration. The FHWA sent TxDOT Executive Director Michael Behrens a letter Aug. 16 stating it found the procurement process for the project violated federal laws regarding “competitive acquisition” and competition for projects between private and public entities. The letter written by FHWA Administrator J. Richard Capka stated, “The project will no longer be eligible to receive such funds unless TxDOT takes immediate action to comply with federal law.”

TxDOT Assistant Executive Director Armando Saenz sent a response to Janice W. Brown, FHWA’s Dallas division administrator, Aug. 21 assuring FHWA that TxDOT would consider canceling the CDA and the minute order at Thursday’s TTC meeting in order to comply with those violations. A follow-up letter from Brown confirmed both the CDA and the minute order cancellation would bring TxDOT into compliance, according to TxDOT documents.

Sam Lopez, NTTA spokesman, said NTTA has fulfilled its obligations with regards to the 60-day agreement deadline. The NTTA is just awaiting final approval from the FHWA on its environmental proposal so they can begin securing the financing.

“From an NTTA perspective, everything is done,” Lopez said. “What happens for us is we just sit tight and wait for them to finish the agreement, to sign it and at that point, once we know the agreement has been executed, the NTTA has 45 days to get its financing organized and off we go.”

Lopez said NTTA has been in touch with financial backers for the project, but cannot begin official negotiations until it has a project agreement in place.

“We’re pretty confident everything is going to go well, but we can’t do any formal agreements until we have a relationship with TxDOT,” Lopez said. “We’ve been in touch with rating agencies who review us and we’ve been in touch with underwriters who will help get all that financing organized. It’s kind of on a hold pattern and we’re just patiently waiting. Once we get the go-ahead, we’ll have 45 days to do that.”

Lippincott said the TTC still has some concerns with dismissing Cintra and moving ahead with NTTA’s proposal.

“The concern that was explained during today’s commission meeting was that the financial risk from the project would transfer from the private sector back to the motorists with concerns of higher tolls,” Lippincott said. “The commission didn’t feel like they had a choice in light of the legislative action passed in part of SB 792.”

Attempts were made to reach Jose Lopez, Cintra’s U.S. and Latin America president, but phone call made to his Austin office were not returned by presstime.