The Texas Department of Transportation (TxDOT) has received two proposals to develop the $1.5 billion New LBJ project in Dallas County from investment groups led by ACS Infrastructure and Macquarie Capital.
The proposals are for the new LBJ project that involves turning a 14-mile corridor of six high-occupancy lanes of Texas’ I-635 expressway into underground managed lanes. The high occupancy lanes are only for vehicles that carry two or more vehicles. They are tolled at a set rate per vehicle, whereas managed lanes involve a variable toll that rises and falls with traffic to ensure that vehicles are able to travel through the road at a constant rate of 50 miles per hour.
One group that submitted a plan includes ACS infrastructure and Zachry Construction Corporation, and the other group includes Macquarie Capital, Cintra and Meridiam Infrastructure Finance.
The North Texas Tollway Authority (NTTA) will collect the tolls on the newly constructed managed lanes and remunerate the concessionaire. The concessionaire, not the NTTA, will bear traffic revenue risk.
The winning bidder will build, finance, operate and maintain the corridor over the life of a 52-year concession. TxDOT estimates that construction would last five years and cost about $1.5 billion. An additional $2.5 billion would be needed to operate and maintain the road over the remaining life of the concession, the department estimates.
Texas and the federal government have set aside a $700 million reserve fund for the project. As TxDOT officials evaluate the two bidding parties’ proposals, 80 percent of their score depends on how little of the reserve funding they need to use to deliver the project. The remaining 20 percent relates to design.
Scoring of the proposals is expected to take two weeks and a conditional best value proposal will be announced on 26 February. The winning party will have two months to negotiate and finalise the contract. After that, the concessionaire will have six months to complete project management plans.
“If everything runs smoothly, you could see construction beginning in the fall of 2009,” said a spokesperson for the department.
The project has been in development for about 15 years and in procurement for about 1.5 years, the spokesperson added.
The project is one of a handful of toll road projects still under development in Texas under the state’s Comprehensive Development Agreement, which governs the use of public-private partnerships for project delivery. Texas enacted a moratorium in the summer of 2007 that halted the use of PPPs, with a handful of exceptions for projects such as the New LBJ.
That moratorium is expected to be reconsidered by the Texas legislature during the current legislative session.