January 18, 2005
Erik Slotboom and Camino Columbia

Nice article in the Press about Erik Slotboom and his work disputing the need for the Trans Texas Corridor. One thing I learned in reading this piece is that we already have a shining example of a private toll road in Texas, the Camino Columbia down in Laredo. How'd that work out? Not so well.

The state's only private toll road, a $90 million link to Mexico that opened just three years ago, was auctioned back to the bank Tuesday for $12 million and may close.

The 22-mile Camino Columbia route between Mexico and Interstate 35 had investors expecting to get rich because of increased Mexico-U.S. truck traffic linked to the North American Free Trade Agreement.

The landowners along the route invested a total of $15 million, in addition to providing strips of property 400 feet wide.

Tony Sanchez's International Bank of Commerce provided an initial $6 million funding for the road. John Hancock and New York Life Insurance Co. loaned an additional $75 million.

But motorists weren't buying the $16-per-truck, $3-per-car trip from a bridge 23 miles northwest of the city, and traffic was only 13 percent of expectations.

Less than a year after it opened landowners were filing lawsuits claiming they'd been duped.

That sure makes the Cintra-built PerryPike from San Antonio to Dallas look appetizing, doesn't it? But don't worry, state officials know their salesmanship:

Still, the state sees privately run toll roads in its future, as population growth puts a strain on existing roads. Gov. Rick Perry's proposed $175 billion Trans Texas Corridor, is a 4,000-mile network of superhighways, high-speed rail lines and private toll roads.

"Basically, across the state we've got a transportation crisis," TxDOT spokeswoman Gaby Garcia said. "The demand is growing exponentially. ... Tolls are an option that we're going to consider. We have no choice."

Emphasis mine. So many crises, so little time to worry about them all.

In any event, TxDOT bought Camino Columbia in May, and their diagnosis of why it crashed and burned is what should really be worrying us.

The state has agreed to purchase the 22-mile Camino Columbia private toll road that disappointed investors and ended up on the auction block.

The Texas Department of Transportation will pay $20 million for Camino Columbia, which cost $90 million to build.


TXDOT spokeswoman Gaby Garcia said the road was a good deal for the state.

"It's just a matter of waiting for the traffic to come in," she said in Friday's San Antonio Express-News. "Unfortunately, the previous owners weren't able to hang in for the long haul because they had debt to pay and the revenue they had coming in to pay it wasn't there yet."

Cintra is putting up a lot of cash on this deal. What happens if they hit a liquidity problem? Do we have a contingency plan? At least I know the state of Texas isn't going to go belly up.

Something to keep in mind here, going back to the original story:

He points out that the toll fee from Dallas to San Antonio would be about $40. "The nightmare scenario is that these highways are underutilized because the people won't pay tolls, and then they'll toll existing interstates to make up the cost," says Slotboom.

I just checked, and you can fly on Southwest between San Antonio and Dallas for as little as $39 (not including fees) each way. Throw in two or three tanks of gas for the trip, and flying is easily cheaper (especially if you can use public transportation or get rides from others in the city you're visiting) as well as faster than the incipient toll road. Southwest has always said that cars and highways were its main competition. Would you bet on the PerryPike against them? I wouldn't.

Finally, this snarky column by Ed Wallace, who if the picture is to be believed has a bit of a young-Johnny-Cash thing going for him, gives some more background on Camino Columbia and how Washington State solved its "transportation crisis". Check it out.

Posted by Charles Kuffner on January 18, 2005 to Planes, Trains, and Automobiles | TrackBack

Its always gotta be a crisis with these guys.

I am surpised that this little gem has not gotten more play:

"Each mile of the corridor would require an unprecedented 146 acres, including land needed for environmental mitigation and space for roadside "convenience centers." New legislation also includes provisions to more quickly acquire private property through imminent domain, after just 90 days' notice and years before the land is actually needed."

I have a lot of Republican friends who are hard right on most things and imminent domain gets them riled like nothing I have ever seen. Who knows how this could be played politically, but if I were an opponent of this plan I would be pointing this out at every opportunity.

Posted by: Chris on January 18, 2005 9:02 PM

This clearly points out the influence of ultra-conservative, government-hating ideologues like Grover Norquist in Texas public policy issues. Toll roads are a perfect example of the way Norquist believes government should privatize what have long been public functions. It's a nice theory, perfect for discussion at conferences held by the Texas Public Policy Foundation. And Perry has bought into it, apparently without realizing that the damn things have virtually no public support. I predict this, too, shall pass.

Posted by: Dennis on January 19, 2005 5:47 AM

So, here's a scenario:
The government needs a $90M road between A and B, but only has $0M. Sell the rights to build it for $20M, let the private company build it for $70M, and buit it back from them for the same $20M after they go broke. Pow! Free highway.

How do you make $20M in private toll road construction in Texas? Start with $90M...

Posted by: Michael on January 19, 2005 12:38 PM

From the Ed Wallace column (and I agree; he does look like Johnny Cash):

Yet it was President Bill Clinton who first brought up the idea of putting tolls on existing Interstate highways. The Democratic President was quoted as being in favor of tolls by the Associated Press on March 13, 1997.

One of the many reasons I never became a Clinton worshipper. Of course, compared to his predecessor, and especially his successor, I can sorta understand why others made a different choice.

"The nightmare scenario is that these highways are underutilized because the people won't pay tolls, and then they'll toll existing interstates to make up the cost," says Slotboom.

That's pretty similar to what's happened in Oklahoma. Most of that state's turnpikes will never even break even, no matter what they set the toll to; so they've been subsidized by the three turnpikes along Interstate 44.

And when the three cash cows get close to being paid for again, I'm sure the Oklahoma Lege will come up with still more money-losing turnpikes they'd like to build, and they'll "refinance" yet again....

Posted by: Mathwiz on January 21, 2005 3:11 PM