Mayfair in Tampa Palms

East-West Road INFO Mary E. Sheets Project Manager

Jun 26, 2006

Private toll road would blaze trail in state
If transportation planners have their way, the East-West Road through New
Tampa will be built by private investors


By EMILY NIPPS, St. Pete Times
Published June 18, 2006





TAMPA - Last month, a crush of smartly dressed business executives crowded
into the boardroom of the Tampa-Hillsborough Expressway Authority.


They came from as far away as Spain, Australia, Sweden and Canada to attend
the morning workshop. They filled every seat and lined the walls. They eyed
each other, looking away when they were eyed back.


What was the big deal? Tampa was about to become home to the first toll
road in Florida designed, financed, built, operated and maintained by a
private company, negotiated through a public contract. Whoever wins the
contract could make millions off Florida's drivers.


This new concept is taking the business of road building out of the
government's hands and into the private sector.


If everything goes the way planners want, New Tampa's East-West Road would
connect Interstate 275 and Bruce B. Downs Boulevard and become the first
road to operate as a private business, in which tolls are collected for
profit.


"This is going to be the forerunner of projects like this all over
Florida," said state Sen. Jim Sebesta, a St. Petersburg Republican who
attended the March workshop. "Once this gets publicized, others will
suddenly wake up."


And that has people wondering: Is putting the fate of Florida's roads in
the hands of profit-driven corporations in the public's best interest?


Others have tried it


The idea isn't new. Private companies have build public road projects in
Europe, Asia, Africa and Canada for 15 years. Only in the last few years
have these kinds of contracts been popping up in the United States.
Projects include the $184-billion Trans Texas Corridor and the $900-million
State Road 125 in San Diego.


In Tampa, leaders turned to the idea to find money for the long-needed
East-West Road, which would ease congestion in New Tampa by linking I-275
to Bruce B. Downs Boulevard. The road has been on city planning maps since
the 1980s. Since then, the price tag has risen from $30-million to
$150-million as city officials have scratched their heads over how to pay
for it.


The tradition of building roads using gas taxes and government bonds
doesn't always work as the federal transportation budget gets tighter and
tighter. Without a private investor, a backlog of state transportation
projects may never get built.


"Using the traditional method of 30-year bonding, this road would never be
built," said Ralph Mervine, acting director of the Expressway Authority.


Even for potential toll road agencies, building a $150-million road seemed
like a risky business venture. Most expressway authorities cannot afford to
wait 30 or 40 years for their investment to return a profit.


So the Expressway Authority, which took on the project in January after the
Florida Turnpike Authority didn't want to finance it, decided to try out
this creative new financing concept.


Here's how it works: Private companies finance and build the road and
collect tolls over a long-term lease, which is typically 40 years or more,
while adhering to public guidelines detailed in a contract. When the lease
is up, the road is returned to the government.


A shining example


New Tampa drivers can be comforted by the fact that the chosen private
investor will need this project to work, said Doug Callaway, president of
Floridians for Better Transportation, a road-building advocacy group in
Tallahassee.


If the East-West Road becomes the first public-private partnership in
Florida, it will be held up as an example to other gridlocked cities
shopping around for a private partner.


"These folks are not going to want to mess up their future opportunities to
build these kinds of roads all over the state," Callaway said.


Besides, Callaway said, is running a road like a customer-dependent
business such an awful thing? He doesn't think so.


"Which would you rather get customer service from: Winn-Dixie, Publix,
Disney World or the Department of Motor Vehicle place?" he said. "You have
all the positive aspects of the free market working here. This may be the
best of both worlds."


But the plan isn't foolproof.


According to a 2005 story in the Fort Worth Star-Telegram, about 700 people
using Canada's 407 Express Toll Route complained about aggressive toll
collection tactics and rude customer service by Cintra, one of the
companies looking at Tampa's East-West Road. In the story, a Cintra
spokesman countered that the company takes customer service seriously, and
that complaints represent a very small portion of the trips on Cintra's
roads.


In California, a company in charge of building high-speed toll lanes from
Anaheim to Riverside cited a noncompete clause in its contract when the
state wanted to expand an adjacent freeway, which would hurt the company's
toll revenue.


Details, details


For any public-private partnership, "the devil is in the details" of the
contract, said John Beck, a transportation lobbyist and consultant who
helped write the Florida statute allowing such road projects. The contract
must address solutions to any potential problems or conflicts, and it's up
to the Expressway Authority to protect the public from pitfalls.


No reputable investor will want to gouge or upset the public, Beck said.


"This is a business," he said. "You serve bad food, you don't get
customers."


The Expressway Authority's Mervine said that the East-West Road contract
will place limits on incremental toll rates over 40 years and will include
clauses detailing how quickly repairs must be made, among other issues. The
Expressway Authority also will inspect the road as it is being built.


"When we look at the issue, we ask if it is providing good public purpose,"
Mervine said. "That's the foundation of our thinking. The contract will set
the standards."


The concept of a privately financed and operated road might seem scary to
some, but these kinds of projects are the wave of the future, Mervine said.


"A lot of people might say, 'My God, we're having a private investor
building a public road,' " he said. "But if we don't do something, we'll be
falling further and further behind."




Mary E. Sheets
Project Manager
(813) 975-6166
mary.sheets@dot.state.fl.us