REACHING HIGH State Highway 130, well under way, is a critical test case for alternative delivery methods.

True to its unofficial motto, "Don’t Mess With Texas," the Lone Star State willingly bucks convention. An ambitious highway plan, as maverick as the state itself, is proving this true. In a time when states struggle with budget deficits, the 65-mile, $3.6-billion Central Texas Turnpike Project could be a creative solution and a harbinger of future roads.

The private-public design-build program, which consists of State Highways 130 and 45 North and Loop 1, represents a comprehensive development agreement enabled by state legislation approved in 2001 (House Bill 3588). The experimental process allows the state to enter into contracts with one entity to oversee everything from construction and design to operation and maintenance.

The state operates more than 20 successful toll roads, including the Sam Houston Parkway in Houston, President George Bush Turnpike in Dallas, and 15 toll bridges along the Mexico-U.S. border. But this is its most ambitious plan to date. "With this project, we’re sending a message," says Robert Daigh, Austin district engineer for the Texas Dept. of Transportation. "This is a new way of doing business that will bring other major highway projects on line quicker."

The central turnpike’s new roads, to be built almost 25 years faster than if by traditional design-bid-build, will alleviate gridlock between Austin and San Antonio. The alignment runs parallel to Interstate 35, a heavily traveled truck route noted in the North American Free Trade Agreement. Nearly 80% of all U.S.-Mexico trade goes through Texas.

According to the Austin-based Texas Public Policy Foundation, a non-profit think tank, tractor-trailers take up 3.8 times more road than a single car. Projections call for a 100% increase in truck traffic through Texas by 2020. "Although we’re a large state with a $3-billion annual roadbuilding program, it only meets 36% of our current transportation needs," says Phillip Russell, director of the state Turnpike Authority Division.

The turnpike project is also a critical test for Republican Gov. Rick Perry’s Trans Texas Corridor–a proposed 4,000-mile network of roads, rail and utilities first unveiled in January 2002. That 50-year undertaking calls for a 10-lane highway with six railroad tracks grouped together in 1,000-ft-wide at-grade corridors, plus underground gas, water, electric and fiber-optic lines. The state intends to finance the corridor’s estimated $180-billion price tag through bonds, federal loans, toll revenue, ridership fees and utility easement sales.

"We must look at new ways to finance our transportation projects," Perry says. "The Central Texas Turnpike System affirms that innovative financing can make the Trans Texas Corridor a reality." Click here to view map

Unlike pay-as-you-go projects that are constructed in a piecemeal approach, construction of several segments of the central turnpike will occur simultaneously to save time and money. The state’s financial model consists of four elements: $2.2 billion in tax-free revenue bonds; $700 million from TxDOT; $500 million from affected communities and a $916-million federal loan under the Transportation Infrastructure Finance and Innovation Act. The state at its leisure can draw on the TIFIA loan, which has a locked-in 5.41% interest rate, to pay off short-term obligation notes. Since those notes are backed with federal funds, they have an interest rate 2% lower than the TIFIA loan. As a result, the state hopes to save up to $70 million in interest.

TOLLED Texas turnpike may pave way for more ambitious system.

The turnpike will levy a usage fee of 11.5 to 15 a mile, depending on the route, to retire its debt. If the project finishes in Dec. 2007, as scheduled, it could become the first piece of the Trans Texas Corridor. The project’s fate, however, lies in SH 130–its largest and most complex component. The $1.5-billion, 49-mile, four-lane divided concrete toll road will stretch from Georgetown, north of Austin, to Seguin, east of San Antonio. In June 2002, Austin based Lone Star Infrastruture LLC, a joint venture of Fluor Corp., Aliso Viejo, Calif., Atlanta-based Balfour Beatty Inc., and T.J. Lambrecht Construction Inc., Joliet, Ill., won the $1.36-billion design-build-maintain fixed-price contract, beating out a cheaper asphalt highway proposal from Four Rivers Developers, a consortium led by Watsonville, Calif.-based Granite Construction Inc. Four Rivers’ base price was $50 million lower, but its 15-year maintenance cost $159 million. TxDOT, in its evaluation, added $26 million in asphalt milling and overlay expenses to that proposal for maintenance years 16 through 30. Lone Star only had a $64.5-million maintenance budget, which secured it the contract despite 269 more days of construction time.

The SH 130 contract entails construction and 15 years’ maintenance, with four toll plazas, 29 exit ramps and 119 bridges, the longest being 220 ft. Right-of-way acquisitions and utility relocation are included in the contract. The five-year construction program calls for five interchanges, 30-million cu yd of earthwork, 1.7-million tons of asphalt paving, 2.7-million tons of concrete paving, 350,000 sq ft of steel bridges and 5 million sq ft of concrete bridges.

There are 200 designers, 90 subcontractors and a work force of 1,100 people on the job to open SH 130 by December 2007. Four milestone completion dates each carry incentives from $7,500 to $10,000 a day up to $2 million, as well as daily penalties ranging from $35,000 to $50,000. The project stipulations cap LSI’s liquidated damages at $100 million.

"The ability to handle the project from start to finish appealed to us," says Douglas Fuller, LSI project director. "There is a certain efficiency in a design-build-maintain package that mitigates risks from our standpoint and keeps costs under control."

Other turnpike contracts are conventional low-bid, but with big risks and incentives. The 13-mile SH 45 North project consists of a six-lane divided concrete toll road extending from west of U.S. 183 eastward to SH 130 with four major interchanges. One of those, at SH 130, was so important to the City of Round Rock that it contributed $31 million from voter-approved tax hikes. "Technically we didn’t have to put in anything, but we really want it built," says Tom Martin, Round Rock’s transportation services director. With its own population doubling in a decade to 77,000, the city plans $80 million worth of local road work to support the turnpike.

MARCHING ON Central Texas Turnpike work is on track to be completed by 2007, almost 25 years faster than by traditional project delivery.

Most of SH 45 North is under way, with the final two contracts scheduled to be put out to bid this month and in March. Last January, a joint venture of Zachry Construction Corp., San Antonio, and Gilbert Texas Construction LP, a unit of Peter Kiewit Sons’ Inc., Omaha, Neb., landed the $81-million, SH 45 North-Loop I interchange. The work calls for 2.7 miles of six-lane concrete roadway with 13 concrete bridges and four flyovers, the largest 76 ft tall and 1.25 miles long. Scheduled to open by March 2006, the job carries $32,000 a day in penalties after 995 working days.

Other contracts include:

• A $107-million, 3.5-mile Loop 1 extension from Parmer Lane to SH 45 North, won in June by Zachry-Gilbert. The six-lane concrete road, toll plaza and 1.5 miles of frontage roads is slated for a Sept. 2007 opening. The team can collect a one-time $2-million bonus if things wrap up by July 14, 2006. There are up to $31,900 a day in liquidated damages.
• A $103-million, two-mile section of SH 45 North, won by Archer-Western Contractors Ltd., Chicago, in May. Work entails building a six-lane, five-level interchange at I-35 and extending frontage roads two miles to CR 170. There is an early completion bonus of $1.5 million if the project is finished by May 2006, and $32,000 a day in late penalties after December 2006.
• A $63.2-million, 2.5-mile new east-west thoroughfare between Travis and Williamson counties, part of SH 45 North. Granite Construction Inc. and J.D. Abrams LP, Austin, won the job in August and must finish the six-lane concrete divided toll road by December 2006 or incur $30,000 a day in fines.
• A $101.5-million, 2.8-mile section of SH 45 North, won in September by Dallas-based Austin Bridge and Road LP. The contract includes the U.S. 183/SH 45 North interchange and a six-lane divided concrete toll highway plus eight bridges, a toll plaza, retaining walls and a drainage system. Scheduled to finish in December 2006, the contractor can collect a $4-million bonus for early completion, or face $32,000-a-day late fines.

Recent TxDOT reports say the multi-contract project is ahead of schedule and roughly $200 million under its original budget. Says Michael Behrens, TxDOT executive director: "All indications are that the Central Texas Turnpike project is on track to meet its scheduled opening."