DALLAS — Expansion of an international toll bridge in Eagle Pass, Texas, is expected to begin in April, with 97% of the funding from Texas Department of Transportation grants, officials said.
With the project in the works, Moody's Investors Service affirmed its Baa1 rating on Eagle Pass International Toll Bridge System's senior lien revenue bonds and maintained a stable outlook in a report issued Friday.
The rating affects $8.3 million of debt used to build the city's second bridge over the Rio Grande, providing six lanes for vehicles and walkways for pedestrians.
The bridge began operating on Sept. 24, 1999 about a half-mile south of the existing Eagle Pass International Bridge and immediately north of the international railroad bridge, which is owned and operated by Union Pacific.
The bridge, known as International Bridge 2, is 1,384 feet long, with 1,010 feet on the U.S. side and 374 feet on the Mexican side. The 84-foot wide roadway includes two six-foot sidewalks for pedestrians.
The city of Eagle Pass, which operates the bridges as the toll road authority, is adding two additional lanes to accommodate expected increases in commercial traffic to and from Mexico.
Recovery of the US-Mexico trade along the Texas border following the 2007 to 2008 recession has fueled strong growth in commercial traffic at the Eagle Pass crossing, officials say.
Although safety concerns related to the drug trade continue to suppress passenger traffic at the crossing, intensified security measures implemented by the Mexican government should mitigate safety concerns, according to Moody's.
In May, the bridges were closed by gun battles on the Mexican side that included the use of hand grenades.
Commercial truck traffic at Eagle Pass grew by 14% and 11.7% for fiscal years 2011 and 2012, according to Moody's. Mexican manufacturing exports continue to gain market share in the US as the corresponding share moved to 12.5% in August from 12.1% the same month last year.
However, due to near 6% annual losses in passenger traffic, total traffic declined by 3.9% in fiscal 2011 and 3.2% in fiscal 2012.
"These declines are not unique to Eagle Pass, as passenger transactions were down by 5.8% in Eagle Pass, compared to larger declines at the two closest border crossings, with Laredo (bridge system rated A2/stable) declining by 5.7 % and Del Rio (GO rated A1) declining by 4.4%," Moody's noted.
Factors fueling the local economy in Eagle Pass and Maverick County include the activity associated with hydrocarbon production at the Eagle Ford Shale, the only legal casino in Texas, the Modelo brewery, and large city mall.
"However, the pending security issues are still a risk to future traffic increases," Moody's noted. "The Mexican government is focusing on security with more militia, whose increased visibility should help stabilize local traffic activity, but management continues to expect a passenger traffic decline in 2013. Therefore, management's efforts to control costs and raise tolls remains key to maintaining financial margins in the future."