Texas Speed Limit May be Lowered to Boost Toll Revenue
Texas Speed Limit May be Lowered to Boost Toll Revenue
Toll road contract in Texas allows state to lower speed limits on nearby interstate freeway to avoid paying penalties to a private company.
The Texas Department of Transportation (TxDOT) has agreed to consider lowering the maximum speed limit on a stretch of interstate highway that competes with a planned toll road. Cintra-Zachary, a joint Spanish-US venture, paid TxDOT $1.3 billion for the right to collect tolls on 40-miles of State Highway 130 set for construction beginning in 2009. Although TxDOT suggested that free market competition was part of the goal of using a public-private partnerships to construct and operate roads, the contract it signed on March 22 to construct this portion of SH130 was specifically designed to limit the desirability of alternate, free routes.
“The compensation amount owing from TxDOT to Developer on account of the competing facility shall be equal to the loss of toll revenues, if any, attributable to the competing facility,” the contract states. (11.3.2.1)
The provision ensures no improvements can be made to nearby roads unless the agency issues payment to the Spanish-US private consortium with taxpayer funds. TxDOT can reduce the amount of compensation owed, however, if it agrees to increase toll revenue by imposing a “decrease in the maximum daytime posted speed limit for passenger vehicles on all or a substantial portion of I-35 where it runs generally parallel to the Facility.” This means that TxDOT can recover money generated by additional tolls as motorists abandon I-35 because of the lowered limit and increased congestion.
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