Return to search

Cintra, Meridiam, Macquarie interested in Texas road PPP

A request for information for a proposed 180-mile Grand Parkway near Houston, Texas, has elicited interest from 23 groups. The proposed public-private partnership is the result of a recent law in Texas that has enabled 11 such projects.

Twenty-three groups have responded to a request for information (RFI) for the Grand Parkway project, a proposed public-private partnership (PPP) to construct a 180-mile tolled highway through seven counties in the vicinity of Houston, Texas.

The Texas Department of Transportation (TxDOT) issued the RFI for the project on June 10 and expects to hold one-on-one meetings with potential private sector developers on July 18-20, according to the RFI. TxDOT expects to issue the request for qualifications for the project in mid-August and to select a preferred proponent by end of June 2012.

Respondents to the RFI included: Spanish infrastructure group ACS; Macquarie Capital; Fluor Enterprises; Edgemoor Infrastructure; China Construction America, a subsidiary of the China State Construction Engineering Corporation; Israeli developer Shikun & Binui; VINCI Concessions; Kiewit Infrastructure Group; a group comprised of Spanish toll road developer Cintra and French fund manager Meridiam; FCC; Hochtief PPP Solutions; Spanish infrastructure group Acciona; Balfour Beatty Capital, the equity investment arm of UK developer Balfour Beatty; OHL Concesiones; and Brazilian developer Odebrecht.

Texas is considering various structures to fund the Grand Parkway project, including a full concession agreement, a design/build agreement with traditional tax exempt toll revenue bonds, and an availability payment structure.

Under the availability payment structure, TxDOT would make “milestone” or regular payments to the private developer, as long as the private developer maintains the asset to certain standards, according to the RFI. TxDOT said the availability payments could be funded through toll revenues or through the State Highway Fund, and would cover the private developer’s capital costs, operation and maintenance costs, and return on equity.

Texas is not new to roads PPPs, but recent legislation, signed into law by Republican Governor Rick Perry in June, has enabled TxDOT to pursue 11 specific projects as PPPs.  Beyond the Grand Parkway, those projects include the $3.7 billion I-35E managed lanes project for which TxDOT has also issued an RFI.