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Corridor Builder Asks About Use of Public Money

Wed July 13, 2005 - West Edition
CEG



DALLAS (AP) The consortium that won a $7.2 billion deal to build the first part of the Trans-Texas Corridor, in part because it promoted use of private money, has inquired about public money.

Cintra-Zachry wrote a letter to the Federal Highway Administration saying it is interested in applying for a $320 million low-interest loan. The developer said in the letter that the loan would help build the 42-mi. State Highway 130 extension from south of Austin to Seguin, estimated at $1 billion.

Some say the inquiry contradicts deal-breaking claims that no taxpayer money would be used on the project. The Governor’s Office and the consortium say the deal didn’t prohibit using federal money. Only state money was mentioned.

When the state and Cintra-Zachry signed the deal March 11, Gov. Rick Perry’s office issued a news release saying that the construction would be done “at no cost to taxpayers.”

“I believe we always said state dollars” would not be used, said Texas Department of Transportation spokeswoman Gaby Garcia. “At the time Cintra-Zachry came on, we looked only at [whether there would be] the inclusion of state dollars. That’s how we defined it.”

When Cintra-Zachry officials presented some of their plans for the corridor in December, they emphasized private funding for the public project.

Perry was not surprised that the consortium would seek innovative forms of financing, according to Kathy Walt, spokeswoman for Perry. The request doesn’t contradict Cintra-Zachry’s previously stated goals about private funding, she said.

“I disagree that the perception is any different here,” Walt said. “A loan is a loan. It’s not a grant, and it will be paid back with interest.”

Some state leaders remain skeptical.

“This is the first we’ve heard of them essentially seeking tax money for the project,” said Mike Sizemore, press secretary for Sen. Ken Armbrister, D-Victoria, who has questioned the corridor project.

“The whole thing is, it was touted as using private funds,” he said.