DALLAS - The Texas Department of Transportation can "unfreeze" private bidding for completing and operating a $1.2 billion toll highway in the Dallas area if the North Texas Tollway Authority passes on the project, a spokesman for TxDOT said.
The state transportation agency last year narrowed a list of finalists for the State Highway 161 project to four private developers before the Texas Legislature rewrote the process for awarding toll projects under SB 792.
Under the new law, regional toll authorities such as the NTTA have the right of first refusal or "primacy" on any toll projects. If the public toll authority passes on the project, TxDOT can then seek bids from private concessionaires.
SH 161 was one of several toll projects exempted from a two-year moratorium on public-private partnerships for toll roads in Texas under the legislation.
The NTTA this week passed a resolution with three proposals for TxDOT on SH 161, which is designed to operate as a toll road in the western suburbs of Dallas carrying traffic toward the Dallas Cowboys' new stadium in Arlington.
One of the proposals was for the authority to surrender the project if agreement cannot be reached with TxDOT on the market value of the toll project. The market valuation is at an impasse after weeks of negotiation, NTTA officials said.
The first NTTA proposal was to resume the so far fruitless market valuation process. The second proposal was a "take-it-or-leave-it" market valuation of $548 million for the fourth phase of the toll road, which is the section the authority is seeking to build. The third proposal was to let the NTTA out of the bidding.
Tomorrow the Regional Transportation Council, a consortium of local governments, will vote on which of the three proposals to accept. The RTC, which allocates state and federal transportation dollars regionally while seeking alternative funding, debated the proposals for several hours last week with no resolution.
The RTC's recommendation then goes to TxDOT and its governing board, the Texas Transportation Commission for a final decision.
"We'll act based on the guidance we get from them," said TxDOT spokesman Chris Lippincott. The department had set a deadline of Wednesday to settle the market value issue with the NTTA.
One of the authority's chief concerns is that taking on more debt could harm its credit rating, which slipped recently after it agreed to raise $3.3 billion of debt to finance another toll project, State Highway 121 north of Dallas. The new bond issues tripled the NTTA's debt load, prompting a downgrade from Fitch Ratings to BBB-plus from A-minus. The authority dismissed Fitch from rating the most recent bond issues as a result.
Standard & Poor's and Moody's Investors Service maintained their A-category ratings on which the NTTA had based its financing model. But Standard & Poor's issued a one-notch downgrade to A-minus after the $3.3 billion debt was approved, while Moody's maintained an A2, with both agencies holding the outlook at stable.
To build SH 161, the NTTA would have to provide an upfront payment of about $1 billion for the rights to the project. The toll agency paid a $3.3 billion payment to the RTC for SH 121.
Executive director Jorge Figueredo told the board last week that the authority could not make a decision on whether to build the new SH 161 until this summer, after an analysis by the ratings agencies on how additional debt would affect NTTA's credit.
However, the RTC and TxDOT see the SH 161 decision as more urgent, because local authorities want the project close to completion by the time the new Cowboys stadium opens in 2009. The stadium, under construction in Arlington, located halfway between Dallas and Fort Worth, is also scheduled to host the Super Bowl in 2011.
"We've got to get going on that project," Lippincott said. "But first, we must find a formula that we can all agree on, and that has been a long process."