Texas bill approves new PPPs

New legislation would allow several transportation projects in the state to be procured as PPPs. Though the bill has yet to be signed into law, the Texas Department of Transportation has already issued a request for information regarding two of the approved projects.

The Texas state legislature has passed a bill that would allow 11 transportation projects in the state to be procured as public-private partnerships (PPPs).

The bill, called Senate Bill 1420, has passed both houses of the state legislature and is awaiting the signature of Texas Governor Rick Perry, a Republican.

The legislation allows the Texas Department of Transportation (TxDot) to use a method for partnering with the private sector known as a “comprehensive development agreement”, but the authority to establish those agreements expires in 2015.

The legislation only applies to the 11 projects listed in the bill, and would not grant TxDot blanket authority to pursue PPPs, according to Kelli Petras, a spokesperson for TxDot.  Petras said TxDot had initially hoped to receive approval for 16 projects, but five were removed from the final version of the legislation.

TxDot has already issued a request for information for two of the projects: the $3.7 billion I-35E managed lanes project and the SH 99 Grand Parkway Project, a proposed 180-mile road in the greater Houston area.

 “Subject to Senate Bill 1420 being signed by the Governor or otherwise going into effect, TxDOT intends to work with stakeholders and the private sector to expeditiously deliver these urgently needed projects,” TxDot said in a statement.

Issuing an RFI now would allow TxDot to gather “valuable information” from the private sector “to help accelerate development of these vitally important projects if authority is ultimately granted by the Governor,” Mark Tomlinson, TxDot Turnpike Authority director, said in a statement.

TxDot previously won the right to establish comprehensive development agreements in 2005, but a moratorium on those agreements was issued in 2009, according to Petras.

Texas has been home to some of the US' largest PPPs. A consortium comprised of Spanish developer Cintra, European fund manager Meridiam Infrastructure, and the Dallas Police and Fire Pension system closed on a $2.7 billion financing for the LBJ Express roads project. Cintra, Meridiam and the Dallas Police and Fire Pension also teamed up invest the $2 billion North Tarrant Express project.