8/18/2009Texas Taxpayers Pay Spanish Firm for Failed Toll Road Bid
The loser in a bidding war for a toll road in Texas to receive $3.6 million from taxpayers.
An unaccountable transportation body in North Central Texas on Thursday awarded $3,615,214 in taxpayer money to a foreign corporation for its failure to produce a winning toll road project bid. The Regional Transportation Council (RTC) of the North Texas Council of Governments approved the payment to Cintra Concesiones de Infraestructuras de Transporte, a Spanish company, as a "stipend for unsuccessful bidders" and for costs associated with applications the company made for loans that would have been backed by federal taxpayers.
Although Cintra received a conditional green light in February 2007 for its bid to construct a 26-mile extension of State Highway 121 as a toll road through Denton and Collin Counties, the state legislature within a matter of weeks expressed second thoughts about the deal. New legislation restricted the private development of certain toll roads and forced the consideration of an alternative bid from the North Texas Tollway Authority (NTTA), a public agency.
On June 28, 2007, the RTC voted 27 to 10 to approve the NTTA proposal which was described as "more lucrative" than Cintra's. In return for an up-front payment of $2.5 billion, plus $1.5 billion in future payments, NTTA would have free reign to impose tolls on motorists for the next fifty years. The $4 billion in payments to the state would, in effect, be an advance loan of money that the agency expected to collect from motorists, less the substantial costs for overhead.
The switch to NTTA came in spite of Governor Rick Perry's strong support for Cintra throughout the process. In 2004, Perry had even hired his legislative director, Dan Shelley, away from his work as a consultant for Cintra. After the company landed several major state deals, Shelley returned to Cintra in 2006. By 2008, Shelley had collected an estimated $300,000 from the Spanish firm for his work as a registered lobbyist.
The payments to Cintra were made possible by Governor Perry's approval of legislation in June authorizing unlimited compensation to losing bidders on toll projects. Denton County taxpayers will pay the most, $1,961,063, to Cintra. Collin County will pay $1,446,086 and Dallas County $253,065. The anti-toll group Texans Uniting for Reform and Freedom (TURF) expressed outrage at the decision to send taxpayer money to Cintra.
"Wanna know why there's no money for roads?" TURF Founder Terri Hall asked. "Here's your answer. We're paying losers for not even building the roads. The cronyism is only getting worse, and it's at the expense of the taxpayers."