Project Overview
State Highway (SH) 130 is a 91-mile, four-lane toll road east and south of Austin, Texas. The road runs roughly parallel to I-35 through central Texas, and is intended to facilitate growth in long distance travel between Mexico and the Midwest, in addition to providing additional capacity for local travel.
Segments 1-4 of SH 130, extending 50 miles from I-35 at Georgetown to US 183 at Mustang Ridge, were developed by the Texas Department of Transportation (TxDOT), which operates the facility as part of the Central Texas Turnpike System (CTTS) of toll roads in the Austin area.
Segments 5-6 cover the southernmost approximately 40 miles of the SH 130 route to its terminus at I-10, including 15 miles that follow the existing alignment of US 183. The SH 130 Segments 5-6 project was developed through a 50-year design-build-finance-operate-maintain (DBFOM) public private partnership (P3) between TxDOT and the SH 130 Concession Company, which is comprised of Cintra and Zachry American Infrastructure. The $1.35 billion project opened to traffic in October 2012 as the first privately developed highway in Texas.
Project History
During the 1990’s, growing traffic volumes and congestion in its key Interstate highway corridors led Texas to explore new methods of financing and delivering needed transportation system investments. In 2003, the state passed legislation authorizing TxDOT to make use of a broad range of new project delivery options, from design-build contracting to long-term DBFOM concessions, that would increase the involvement of the private sector in developing important transportation improvements. These arrangements with private developers were dubbed Comprehensive Development Agreements (CDAs).
The four northern segments of SH 130 were constructed under a design-build CDA, as allowed in 2003 legislation, and open to traffic in stages between 2006 and 2008. However, TxDOT was unable to identify adequate funding to build the remainder of the route (Segments 5-6) through the more sparsely developed areas to the south using that same approach.
During this same time period, TxDOT was exploring the possibility of developing a new long-distance route paralleling I-35 that it labeled “Trans Texas Corridor 35” (TTC-35), part of a planned network of multimodal “supercorridors” across the state. In March 2005, following a competitive process, TxDOT engaged a team led by Cintra (a subsidiary of the Spanish construction firm Ferrovial Agroman) and San Antonio-based Zachry Construction to prepare a master development plan for the TTC-35 corridor. Under the agreement with Cintra-Zachry (which was structured as a CDA under the 2003 law), the master plan would also identify specific projects within the corridor that might be ripe to advance in the near term, and gave the team the right to negotiate a separate CDA to develop those projects.
The TTC-35 plan produced by Cintra-Zachry identified SH 130 Segments 5-6 as a strong candidate for development, and the two firms formed a joint venture, the SH 130 Concession Company (with Cintra holding a 65 percent stake and Zachry the remaining 35 percent), to negotiate a CDA specific to that project with TxDOT. In March 2007, TxDOT and the concession company successfully executed the CDA for SH 130 Sections 5-6, Texas’s first DBFOM P3 project. Under the terms of the SH 130 CDA, the concessionaire would collect all toll revenues on the project, but would also share the revenues with TxDOT based on a sliding scale set forth in the CDA. Future toll rates would be tied to changes in economic output in the state.
The CDA also required the developer to make a minimum upfront payment of $25 million to TxDOT as a concession fee for the project; this fee would be increased if TxDOT were to authorize a higher maximum speed limit for the toll facility (thereby increasing the facility’s attractiveness as an alternate route to I-35) when it opened. In September 2012, TxDOT set the speed limit on the southern portion of SH 130 at 85 mph (the highest in the U.S.), triggering a $100 million increase in the concession fee due from the developer.
Following the completion of permitting work for the project, the SH 130 Concession Company reached financial close (including a $430 million TIFIA loan) in March 2008. Final design and right of way acquisition were completed the following year, with construction beginning in April 2009. The facility commenced service in November 2012. All tolls are collected electronically at highway speeds, with no options for cash payments.
Project Financing and Delivery
Financing sources for the project included $686 million in long-term senior debt from a group of five European banks; a $430 million subordinated TIFIA loan; and $210 million in equity contributions. TxDOT also provided an additional $8 million in compensation to the developer due to change orders during construction. The TIFIA loan is secured by a lien on project revenues, with repayments scheduled to begin in 2017. The financing arrangements also included contingent equity commitments from the concessionaire and a $35 million “liquidity facility” from the lending banks that could be drawn on to meet the project’s debt service obligations during the first five years of operation.
Last updated: Monday, August 29, 2022
