NTTA Chairman Paul Wageman told lawmakers that he could top the Cintra deal and keep toll road money in North Texas.
Days later, a mysterious letter began making the rounds in Austin blasting the NTTA proposal. It alleged "there is a serious flaw," and also said the "NTTA proposal begins to make no sense."
The critical letter also found its way onto a toll road news web site, where it was billed as an analysis prepared by investment banker Goldman Sachs. Sachs says that characterization is false..
News 8 has learned the letter originated in a state office building at the Dallas division of the Department of Transportation.
Deputy engineer Robert Brown admits that he was the author
Posted Tuesday, May 8, 2008 18:29
A KPMG/Goldman Sachs analysis of the North Texas Toll Authority (NTTA) and Cintra proposals for a toll concession on SH121 says NTTA have used an unrealistically low discount rate on future revenues - giving only the appearance of a superior bid. They say unless NTTA were able to increase toll rates more than the the Dallas Regional Transportation Council (RTC) limits in force on the TxDOT-selected Cintra proposal, the public toll authority could be bankrupted.Click Here to read the entire article
The terse 2-page paper being circulated in Dallas says the NTTA proposal is seriously flawed with its low 5% discount rate. They say that unlike the Cintra offer, the NTTA proposal makes no allowance for risk.
They also suggest NTTA's proposal underfunds operations and maintenance.
Mother Jones reported in January that
the Amount that Goldman Sachs gave to a PAC established by its lobbying firm, Hillco Partners, to push a 2001 Texas ballot measure allowing privately operated roads: $10,000
The Charles Webster, staff reporter for a Trenton, NJ publication cited
The report in Mother Jones magazine found that Goldman Sachs has set up an infrastructure investment arm, and has been working closely with Australian-owned Macquarie Infrastructure Group (MIG) and the Spanish construction firm Cintra to leverage lease deals for public roads and building projects for public highways.
The article describes efforts by Goldman Sachs officials to convince government officials around the country of the benefits of privatizing public roads. But the article also points out that Goldman Sachs is playing more than one side of the transaction.
On one end, Goldman Sachs is advising government entities how to proceed with the transaction, the investment firm is also working in tandem with its friends at MIG and Cintra.
On the another side, an account has created by Goldman Sachs to funnel investors’ money into an investment fund with the sole purpose of investing in highway infrastructure projects. More than $3 billion has already been accumulated into the account.
Ohio, Kansas and other states could also be headed in the same direction.
To-date, Goldman Sachs has been hired by four government entities to advise them on how to proceed with privatizing highways.
In the past five years, Goldman Sachs has helped turn over several highways from state-owned to privately run, including the 99-year lease deal of the 7.8-mile Chicago Skyway in 2005.
Shipp followed up his May 14th story the next day with a report that TxDOT has decided to allow NTTA to bid on the SH121 project.