Auction block is next stop on Texas' private toll road; usage far below expectations
Friday, December 19th 2003, 12:00 am
News On 6
LAREDO, Texas (AP) _ The state's only private toll road, a $90 million link to Mexico that opened just three years ago, has flopped financially and is up for auction after a foreclosure proceeding.
The Texas Department of Transportation may purchase the highway at the Jan. 6 auction, but no specific plans have been made, Gaby Garcia, a department spokeswoman, told the San Antonio Express-News in Friday's editions.
The 22-mile Camino Colombia was opened in October 2000 on the theory it would be an alternative to clogged public roads and would speed the exchange of goods with Mexico as the North American Free Trade Agreement created more traffic along the border.
The four-lane highway connects the Colombia Solidarity Bridge to Mexico with Interstate 35 at a point 23 miles north of downtown Laredo.
However, traffic on the toll road _ which costs $3 per car and $16 per 18-wheeler _ was only 13 percent of expectations, according to published reports.
Local landowners invested $15 million in the project, along with providing strips of property 400 feet wide to build the road.
``It's just a big ol' scam,'' said David Prieto, a rancher with two miles of toll road crossing his family's land. ``They promised us all kinds of money. It's the biggest fry ever.''
An additional $75 million was loaned by New York Life Insurance Co. and John Hancock Life Insurance Co. in Boston.
``We are just trying to get our money back, as much as we can, plain and simple,'' the newspaper quoted an unidentified John Hancock Life employee as saying.
The road received state approval when George W. Bush was governor. Former Democratic gubernatorial candidate Tony Sanchez's International Bank of Commerce provided initial funding for the road, and Sanchez backed Bush's successful 1994 challenge of Democratic Gov. Ann Richards after she refused to support the project.
A private toll road in Virginia has also struggled financially. The owners of the Dulles Greenway borrowed millions of dollars to refinance the project in 1999, saying the traffic and toll revenue had fallen short of projections.