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AUSTIN--The first House Transportation Subcommittee hearing on toll roads today came on the heels of a scathing audit of the Texas Department of Transportation (TxDOT). Chairman Jim Dunnam (D-Waco) and other State Representatives grilled agency officials on the practices and procedures used to develop toll roads, a contentious and complicated issue not only for state lawmakers but for the citizens of Texas as well.
For nearly a decade, the issue of toll roads has dominated transportation policy. The topic first arose when Governor Rick Perry proposed the Trans Texas Corridor (TTC), an unpopular network of privatized toll roads. The TTC was met with such fierce public opposition that in 2007, the Texas Legislature placed a moratorium on private toll road concessions referred to as Comprehensive Development Agreements (CDAs). However, TxDOT continues to push privately owned toll roads and routinely encourages the Legislature to grant them the authority to enter into these risky road deals.
Members of the subcommittee met after TxDOT officials were questioned about the agency audit. The 628 page report produced by the accounting firm Grant Thornton, recommends sweeping changes be made to the state agency. The report challenges the competence of TxDOT leadership and criticizes the agency’s management culture, its lack of transparency and its sometimes misleading and flawed information about the state’s road projects.
“The audit only confirms what we have known all along,” said Melissa Cubria, Advocate for Texas Public Interest Research Group (TexPIRG). “TxDOT needs a major makeover and needs to start answering some serious questions. We urge Chairman Dunnam and members of the toll road subcommittee to thoroughly investigate the many pitfalls associated with private toll road deals. We also urge the subcommittee to examine current state laws regulating private toll roads, and identify potential loopholes that could enable the TxDOT to continue pushing unpopular private toll road concessions.”
Private toll roads are characterized by the same leveraging of debt, conflicts of interest and reckless shifting of risk that caused the recent financial crisis. Contracts for privately owned toll roads often contain clauses and terms that make projects more desirable for private investors though they jeopardize taxpayers in the long term. Non-compete and compensation clauses prevent the state from improving existing infrastructure or building alternative methods of transportation that would compete or reduce the number of toll-paying drivers. A private entity can often sue the state if the amount of toll-paying customers drops due to new infrastructure projects.
“We encourage the subcommittee to keep the public interest in mind when investigating toll roads and we will be watching to make sure they do so,” Cubria concluded.
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