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Highways Private finance

European construction firms could soon be heading out west in search of Texas gold. Alan Sparks explains.

A change in US law has unshackled the potential for private finance deals to fund infrastructure projects - spawning a $190bn building plan across Texas over the next 30 years.

Although Texas is home of some major contractors and experienced consultants, the Texas Department of Transportation (TxDOT) has ventured to Europe in search of specialist involvement. First destination on a whistle stop tour of major cities was London.

While there Phillip Russell, director of the Texas Turnpike Authority division of TxDOT and Geoff Yarema, partner of accountant Nossaman Gunther Knox & Elliott met with construction firms experienced in the specific engineering challenges the programme will throw up. 'Mined tunnelling and toll concession experience are two key aspects we are looking to bolster during this trip, ' says Russell.

Yarema will be looking at the best and worst of European PFI experience, as the form and scope of the funding packages are yet to be decided.

'We want potential bidders to get involved with how this will all come together, which sections will be done first and how this can be best financed, ' says Yarema. Guiding the scoping party through the PFI minefield will be tour organiser Halcrow's PPP and highways principal engineer, Brian Howells.

Indeed, the whole method of delivery is up for debate. 'For the first section of the State Highway 130 route we had completed the environmental audits and secured the clearance of the environmental authorities. But when we brought in the design and build team from Fluor and Balfour Beatty they found a better solution, but were restricted because of the narrow environmental approved route, ' says Russell.

To avoid a repeat of this missed opportunity and to maximise value for money, Russell is demanding early involvement from bidders at each step of development. 'And to get involved and participate they really need to come over to Texas and see the situation from the ground, ' he adds.

Although the $1.6bn, I-130 project is separate to the programme of work featured on the tour, it will effectively form the first section of the most critical I-35 highway. Part of Balfour Beatty and Fluor's work involves boring a mined tunnel beneath an existing highway.

When complete it will be the longest bored tunnel in the US.

Tax free freight Changes were set in train by the 14 May unveiling by the Bush Administration of its surface transportation reauthorisation proposal.

This act authorises up to $16bn of tax exempt bonds to finance highway and surface freight inter-modal projects developed through public private partnerships.

Without it there would be no private sector involvement in transport infrastructure. With it highways and tunnels will be added to the type of projects these bonds can be used for.

The federal government is a good place to borrow money from, says Russell. 'It is patient, fair and competitive.'

With an exploding population - due to double over the next three decades - Texas has large infrastructure demands.

Add to this the burgeoning trade with Mexico, 79% of which passes through Texas' extensive borders, the pressure on infrastructure is coming to a head.

TxDOT's Russell and his team are planning 6,700km of transportation corridors. In these will run dual three lane highways for passenger vehicles and dual two lane freight highways. Alongside will sit six rail lines - two high speed lines, two commuter and two freight.

A 60m utility zone for power, oil and gas lines is also included in the 366m wide corridor.

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