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Since 1998, J.D. Abrams L.P. has been a leader in initiating and participating in alternate project delivery methods.

Taking the High Road to Funding

News Source: Constructor Magazine, March/April 2007 Issue

Mar. 1, 2007

Following Shadows

Texas also is making use of a tolling model commonly used in the U.K. called pass-through tolls or shadow tolls. Contractors sell the bonds to pay for the construction of a road, and the state pays the contractor based on the number of vehicles that use the road. In the U.S., such bonds are tax exempt, which significantly lowers development costs.

J.D. Abrams L.P., Austin proposed a 7-mileshadow toll road in El Paso in 2005. The Texas Dept. of Transportation put the plan out for bin, and San Antonio' Zachry Construction was the only contractor to bid against J.D. Abrams. Abrams was selected Dec. 8 as the best-value proposal and is now negotiating a pass-through agreement with TxDOT.

"We have a governor, Rick Perry, who understands that the economic viability in Texas starts with transportation," says Bill Burnett, vice president of project development at Abrams. Industry participants agree that large-project developers need local help to get the political support for projects. "Local contractors know the materials sources, the labor market, even the ground conditions," says Deery.

There is no doubt that some form of tolling is here to stay as long as public funding for highways remain low, say industry sources. Virginia, Texas, Georgia and Florida are the leaders in tolling enterprises, but many other states are in the formative stages and moving toward more participation.

Transportation experts say only 5 to 10% of current funding needs can be met by public-private partnerships, so toll roads are not a silver bullet to replace traditional public funding for highways. Still, highway contractors like J.D. Abrams favor toll roads. "We like toll roads because we like to build roads," Burnett says. "It' more opportunity for us."