Groups which have been fighting against toll roads in Texas for years say, we don't want to say 'I told you so,' but I told you so.
"I have to say this is what we anticipated would happen," said Terri Hall of Texans Uniting for Reform and Freedom in response to the downgrading of the bonds of the State Highway 130 Concessions Company, the private group that built the south half of the new SH 130 toll road, to junk status.
"Obviously, this toll road has been in trouble from day one."
In an action taken October 15:
1200 WOAI news reports Moody's investor service downgraded the ratings of the $1.1 billion in bonds issued to build the southern half of the toll road to Caa3, essentially junk status.
Moody’s said its downgrade 'reflects the increased prospects for a payment default.' It went on to say that traffic and revenue 'will continue to grow slow to moderate, yet inadequate pace in order to meet the current debt service profile. The outlook also reflects the uncertainty regarding additional sponsor support and the ultimate lender recovery rate in a post payment default environment' and says a 'rating upgrade is unlikely at this time.'
Hall says the financial troubles being faced by the company, which is essentially a combination of San Antonio based Zachry American Infrastructure and the Madrid based global engineering firm Cintra, shows that the so called 'public private partnership' system of building toll roads, which is being pushed hard by Governor Perry and TxDOT as well as by Bexar County Commissioners, is a failed model.
"We don't think this is the way to fund our road system, people don't like the fact that these private companies have taken over our private road system," Hall said.
She says the financial troubles being faced by the SH 130 Concessions Company make it far less likely that other firms will step in to build toll roads in north Bexar County, where the likelihood of success is far less, because there are so many alternative routes for commuters to take.
"It is unaffordable, it is very expensive it is too far out of the way," Hall said of SH 130. "That's why this toll road has been in trouble from day one."
The company says it is committed to operating the toll road at a profit, and points out that investors in fifty year bonds are interested in long term, not short term success.
The company has already considering options ranging from lowering the tolls for semi trucks to building a new connector ramp from Interstate 35 to SH 130 near New Braunfels to make it easier for San Antonio to North Texas commuters to jump onto the toll road and avoid Austin's crushing traffic.
But Hall says they're going to have to do a lot more to make the road successful.
"I think that the reason why it hasn't succeeded is because it just costs too much money," she said of the $12 toll to drive from Seguin to Georgetown.
The SH 130 Concessions Company operates only the southern half of the 96 mile road. Provisions in the contract with the company call for the state to take over the toll road in case of default. Hall says it is uncertain whether the state would attempt to recoup its losses by operating it as a toll road, or would make it a free road.