Referred to as TEXpress LBJ/NTE/35W, this private company manages about 43 of the 120 miles of TEXpress lanes in North Texas.
Azul Sordo/Dallas Morning News
North Texans know traffic. In fact, most motorists find themselves stuck in a stop-and-go flow at some point every day while driving on major roadways.
The solution to reducing traffic and road congestion by major transportation authorities was to optimize the highways. This meant the creation of toll roads.
The Texas Department of Transportation’s toll lanes, better known as TEXpress lanes, have been a point of confusion for many North Texans. Misconceptions of foreign ownership and private funding have locals raising questions about where their toll money goes, what it is being used for and who exactly owns these roads.
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Here’s what we found out.
Who owns and operates TEXpress lanes?
TxDOT owns all TEXpress lanes. However, the transportation authority is not responsible for maintaining three corridors: Lyndon B. Johnson Interstate 635, North Tarrant Express 820 and North Tarrant Express 35W.
Referred to as TEXpress LBJ/NTE/35W, this private company manages about 43 of the 120 miles of TEXpress lanes in North Texas. Almost a third of all lanes operated by the company are managed, or tolled, lanes.
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Why are some TEXpress lanes run by private companies?
For many years, I-635 was ranked as one of the most congested corridors in Texas. TxDOT wanted to address the problem at a time when state funding wasn’t available. As a result, the transportation authority had to turn to public-private partnerships to help fund the multi-billion-dollar projects.
The LBJ Infrastructure Group and NTE Mobility Partners represent a consortium of investors including Cintra, Meridiam Infrastructure and APG Asset Management. These groups make up the P3s selected to help fund the toll roads. The contracts were negotiated and agreed upon in 2009 between several transportation authorities, including TxDOT, the Regional Transportation Council and the North Texas Toll Authority.
How are TxDOT and private partners involved with TEXpress?
Both TxDOT and the private partners are involved, but in different ways. Operating under the partnership model, each entity plays a specific role in running the three corridors.
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“Every year, we have roughly 10 million drivers that use the projects,” said Jon Takahashi, deputy chief executive officer at TEXpress LBJ/NTE/35W. “Every day, approximately 1 million trips are being made.”
TxDOT still owns the highways and sets the transportation policies to ensure the roads are in compliance with state-mandated laws. If necessary, they can contribute public funding to projects to supplement some of the costs.
P3s allow for private concessionaires to operate and maintain the roads after assuming responsibility for the project, including funding. The three corridors were funded using private investors, loans and bonds, and the total cost of all three projects was about $6.8 billion, with $1.1 billion in public funding.
TEXpress LBJ/NTE/35W was in charge of designing and building the highways. In turn, the company can collect toll revenue for the duration of the contract, which expires in 2061.
“These corridors were completely gridlocked,” said Pablo Ferrando, CEO of TEXpress LBJ/NTE/35W. “These areas [surrounding the corridors] were not really growing, and now they’re growing really, really fast. Our projects are a large contributor to that.”
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Where does the toll revenue go?
TEXpress LBJ/NTE/35W uses toll revenue – collected from the three corridors – for all operational and maintenance purposes. From providing employee salaries to maintaining all lanes on the three corridors, the revenue collected is used to cover these expenses first. In addition, toll revenue covers the maintenance of the three corridors’ general purpose lanes, frontage roads and bridges.
Once the operational and maintenance expenses are paid, the company uses the revenue to pay off the Transportation Infrastructure Loan and private activity bonds used to fund the projects. Referred to as a “cash waterfall,” the company has a list of 14 provisions they must pay before investors see a dime.
“We have to make sure [the provisions] get paid first before anything is shared with the investors,” Takahashi said. “They always have been, and always will be the last to get paid.”
All revenue earned on the TxDOT-managed TEXpress lanes goes to the transportation department.
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Why do toll prices change throughout the day?
All TEXpress lanes, including the privately operated ones, use dynamic pricing. With special sensors that monitor the flow of traffic and congestion, toll rates are updated in real time. Refreshed every five minutes, the price of the managed lanes is dependent on the speed at which traffic is flowing in the general purpose lanes.
“At least one of these options, the managed lanes, has to always be flowing,” Ferrando said.
The price of the toll is also dependent on the size of the vehicle, not the number of axles. The sensors measure the dimensions of the vehicle to determine the rate at which the vehicle will be charged when passing through a gantry – the overhead bridge with cameras and sensors. Each segment has its own rates for vehicles of different sizes.
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Prices on TEXpress toll segments can range from 15 to 35 cents per mile during lighter traffic, and between 45 and 90 cents per mile during rush hour. However, there is no cap on how much a toll could cost on a managed lane, and prices could potentially be much higher. TEXpress officials stated the reason for dynamic pricing is to provide motorists with a choice and “maximize the effective capacity of the corridor.”
“We just follow the traffic,” Ferrando said. “More traffic, higher tolls. Less traffic, lower tolls.”