Monthly Archive for January, 2010

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AEM survey reinforces continued industry slump – Construction equipment manufacturing business “outlook”

Construction equipment manufacturers expect overall industry business to turn around slightly in 2010 following double-digit expected year-end 2009 declines in the minus-40-percent range for the United States and minus-30-percent range for Canada and other worldwide sectors, according to the annual “outlook” survey of the Association of Equipment Manufacturers (AEM). Survey respondents then anticipate stronger growth going into 2011, but not enough to erase the severe 2009 business and job losses. Business in 2012 is then expected to level off.

“Even with a modest rebound in the next few years, the construction equipment industry will still be down by double digits, and there will still be double-digit industry unemployment,” stated AEM President Dennis Slater. “This is not surprising given the continued instability of the housing market and no long-term commitment to America’s roads, rail, airports, water distribution and ports to move people and goods efficiently and safely, and to compete effectively in the global marketplace.”

Construction machinery business in the United States was predicted to end 2009 with  a 43-percent overall drop and then increase 5 percent in 2010, followed by gains of 15 percent in 2011 and 14 percent in 2012.

For Canada, 2009 business was anticipated to decrease 34-percent overall with a 2010 increase of 7 percent, 14-percent increase in 2011 and 11-percent increase in 2012. Industry business to the rest of the world was expected to close out 2009 with losses of 34 percent, followed by a 2010 gain of 7 percent and growth of 13 percent in 2011 and again in 2012.

Factors Affecting Growth

There were no surprises on key factors that survey respondents believe will influence construction equipment sales, such as the state of the overall economy, including credit availability, interest rates and consumer confidence levels. Housing starts and highway funding levels will also play a major role in any business rebound. Other major factors are the strength of the U.S. dollar and international business, since the industry is export-intensive.

AEM is the North-American based international trade group representing the off-road equipment manufacturing industry. Each year it surveys its construction equipment manufacturer members about expected sales of the machines that build and repair roads, bridges, houses, offices, schools and other infrastructure in America and worldwide.

AEM consolidates manufacturers’ estimates of overall business activity. Each forecast in the survey is the average of responses from companies in each product line, predicting industry wide expectations rather than individual company performance, and unit sales rather than company profitability. The full survey results are online at in the Industry Trends section.

AEM Commentary – Global Trade

AEM President Dennis Slater provides some perspective. “These numbers illustrate the continuing slump in construction equipment manufacturing, and they reinforce the need for our nation’s leaders to enact policies that contribute to a vital manufacturing sector overall, not just construction.”

He continued: “Global business will be a key to our industry’s turnaround, and we need policies that enhance our competitiveness in world markets. For example, we still have pending free-trade agreements (FTAs) with South Korea, Panama and Colombia. These agreements would help open overseas markets to U.S. exporters and investors.

“In contrast to the U.S., the European Union is joining East Asian and Latin American countries in negotiating dozens of FTAs. Our failure to pursue FTAs could very well cost U.S. manufacturers much needed competitive advantages by keeping the playing field tilted in favor of our competitors.

“Emerging markets in the past have been very positive for construction equipment sales. Markets to look at continue to include China and India. (In fact, we have CONEXPO-branded exhibit initiatives in China in 2010 and India for 2011.) These countries are committed to building up their infrastructure to compete on the world stage. For example, in recent years China has invested 9 percent of its GDP for infrastructure, compared to the U.S. total of 0.93 percent investment of GDP. ”

AEM Commentary – New Transportation Funding a Must

AEM President Dennis Slater also discussed the severe negative impact of stalled federal transportation legislation. “Especially critical for the construction equipment industry is timely passage of multi-year federal transportation legislation. The stimulus package of last year, and even the ‘jobs bill’ being touted now, are short-term fixes and don’t tackle the underlying problem. A fully-funded, long-term bill will significantly increase highway and transit investment and result in real and long-lasting stimulus.”

He continued: “Without longer-term funding certainty, state and local governments can’t adequately plan projects. It’s also difficult for our equipment customers to make capital investments without the certainty of long- term funding.

“U.S. competitiveness against other nations is also at stake. It is much more difficult, expensive, and time consuming to get products to market without a well maintained system of highways, roads, bridges, waterways, ports, etc. Long-term transportation investment creates jobs and affects more than our industry – all benefit from a safer and more efficient traveling environment with less congestion and lower pollution.

“AEM along with AED, the Associated Equipment Distributors, initiated the Start Us Up USA campaign last year to call attention to the fact that while the country was in a recession, the construction industry was in a depression, with one of the highest jobless rates. The study we commissioned documented that two out of every 25 jobs lost in this ‘great recession’ can be traced to the downturn in the construction equipment sector.

“We’re continuing to educate lawmakers about the need to act on a multi-year ‘highway bill’ and other initiatives that will spur economic growth and create jobs and get our industry back to work. We urge all industry professionals to join in and let their legislators know that inaction is unacceptable.”

A European Developer Of Paving Control Systems Joins Topcon Group

Topcon Corporation announces that Topcon Europe Positioning B.V., a wholly-owned subsidiary in the Netherlands, acquired all business and assets of Roadware B.V., a leading developer of software and hardware for paving machine control solutions. Roadware is also headquartered in the Netherlands.

Joop Mennink, founder of Roadware, said, “After many years of close partnership with Topcon, this company integration is an important step to take our technology to the next level. The products of both companies are highly complementary and will offer our customers a truly seamless product portfolio, covering basic and most advanced automation needs.”

“In addition,” Mennink said, “Topcon’s global presence and extensive dealer network provide access to customers in every part of the world. I look forward to an exciting future together.”

Leveraging Roadware’s broad experience and expertise in automated asphalt/concrete paving solutions, Topcon will accelerate the development of next-generation machine control systems that save time, labor, material, fuel and CO2 while maximizing quality and profitability.

PacLease Continues Record Growth Momentum – Adds 22 New Locations to Serve United States and Canada

PACCAR Leasing Company (PacLease) continues its expansion with the announcement of 22 new locations throughout the United States and Canada. This brings the PacLease location total to over 400. PacLease currently has locations in the United States, Canada, Mexico, and Germany.

“We are committed to continue our location growth,” said PacLease President Bob Southern. “PACCAR dealers are looking for more ways to serve their customers and markets—and full-service leasing offers that opportunity. They’re finding customers who understand the financial benefits of leasing premium Kenworth, Peterbilt and DAF trucks, coupled with the value of outsourcing vehicle maintenance.”

PacLease’s new locations position the company well for further growth. “Even during uncertain economic times, companies continue to turn to full-service leasing for the benefits of off-balance sheet financing and having their trucks cared for by experienced technicians,” Southern said. “Based on historical data, we know that the truck leasing market typically expands at a faster rate than the rest of the industry during strong truck buying markets.”

According to Southern, customers can custom spec medium- and heavy-duty trucks – even hybrid units – through PacLease to match their transportation requirements. “We spec the trucks with our customers to increase operating efficiency. What’s more, we perform all the maintenance on the vehicles. It allows our customers to reduce risk by eliminating the uncertainty of unexpected costs that could impact those in ownership. PacLease also helps to improve fleet operations through on-board telematics, paperless fuel tax reporting, insurance and fuel purchasing programs.”

The new United States locations are:
· Allstate PacLease, 3611 38th St. S.W., Fargo, N.D. 58104, 701-282-6200;
· MHC PacLease, 752 23-1/2 Road, Grand Junction, Colo. 81505, 970-242-2338;
· PacLease Northcoast, 2660 Jacobs Ave., Eureka, Calif. 95501, 707-443-7073;
· Peterbilt PacLease of Idaho, 302 East Frontage Rd. No., Jerome, Idaho 83338, 208-644-9000;
· Peterbilt PacLease of Utah, 715 South 1500 East, Naples, Utah 84078, 435-828-7383;
· Rush PacLease, 3301 North First St., Bloomfield, N.M. 87413, 505-839-6164;
· Rush PacLease, 3405 West Highway 66, Gallup, N.M. 87301, 505-839-6162;
· Rush PacLease, 8700 I-40 West Service Road, Oklahoma City, Okla. 73128, 405-947-2391;
· Rush PacLease, 3770 Homewood Road, Memphis, Tenn. 38118, 901-365-0457;
· Rush PacLease, 7759 Johnny Morris Road, Austin, Texas 78724, 512-410-3409;
· Rush PacLease, 10216 Union Pacific Blvd., Laredo, Texas 78045, 956-724-7383;
· Trebar Kenworth PacLease, 920 S.E. Ninth Ave., Ontario, Ore. 97914, 541-881-1747;
· Western Truck Leasing, 1800 Twin View Blvd., Redding, Calif. 96003, 530-246-2460;
· Western Pacific PacLease, 15324 Smokey Point Blvd., Marysville, Wash. 98727, 360-659-7383;
· Worldwide PacLease, 17th Street & Mack Avenue, Middlesboro, Ky. 40965, 606-248-5100

The new Canadian locations are:
· Inland PacLease, 2470 North Island Highway, Campbell River, British Columbia, V9W 2H1, 250-287-8878;
· Inland PacLease, Mile 49 Alaska Highway, Fort St. John, British Columbia, V1J 4H8, 250-785-6105;
· Inland PacLease, 2200 Nadina Avenue, Houston, British Columbia, V0J 1Z0, 250-845-2333;
· Inland PacLease, 3150 Highway 97 North, Quesnel, British Columbia, V2J 5YP, 250-992-7256;
· Inland PacLease, 3671 Highway 16 East, Terrace, British Columbia, V8G 4M2, 250-635-2292;
· Inland PacLease, 1560 Broadway Avenue South, Williams Lake, British Columbia, V2G 2X3, 250-392-7101;
· Inland PacLease, 227 Range Road, Whitehorse, Yukon Territories, Y1A 3E5, 867-668-2127.

PacLease provides customized full-service leasing programs and truck rentals for customers in a wide variety of industries. To learn more about PacLease programs contact a local PacLease location or visit

2010 Midwest Construction Report

By Aram Kalousdian

Indiana Highway Construction Will Be Strong; Major corridors are under construction in Indiana; the Ohio Department of Transportation’s TIGER project applications seek a total of $587,899,855 in ARRA funding.

As a result of funds available from the lease of the Indiana Toll Road, the Indiana Department of Transportation (INDOT) committed to completing 104 transportation corridors by 2015. As of 2009, 34 of these corridors are complete and open to traffic, 16 are under construction and 40 percent of the program dollars have been invested. About $900 million has been invested.

Due to low bid prices received at INDOT bid lettings in recent months, an additional $464 million will be allocated for construction during 2010-2012.

By the end of 2012, 70 corridors will be complete or under construction, which will amount to 375 centerline miles of new construction. Construction of 15 transportation corridors will be accelerated from the original 2005 list. By the end of 2012, over 3,650 preservation centerline miles, or 34 percent of the state’s inventory of roadways, will see improvement.

By the end of 2012, 650 bridges will be rehabilitated or replaced. This number amounts to over 15 percent of the state’s inventory of bridges. Also the end of 2012, the remaining approximately, will have invested $1.74 billion of Toll Road Lease proceeds, and over 78,000 Indiana jobs will have been created.

Construction spending by INDOT rose sharply from just over $800 million in 2008 to $1.379 billion in 2009. Spending in 2010 will decline slightly to $1.129 billion, before rising again in 2011 to over $1.343 billion. These figures are for major new construction and preservation construction projects and do not include potential federal American Recovery and Reinvestment Act (ARRA) funds Indiana is seeking that have not been allocated to other states. While this number represents a decrease from 2009, it is still substantially above the Indiana spending average of $600 million to $800 million per year. Significant corridors that are under construction and will be completed by the end of 2012 include:

  • Fort to Port (US-24, from Fort Wayne, Ind., to the Indiana/Ohio state line). This is a joint venture with the Ohio Department of Transportation (ODOT) continuing on to the port of Toledo, Ohio.
  • Hoosier Heartland (US-25 from Logansport, Ind., to Lafayette, Ind.).
  • Accelerate 465 (Interstate 465 around Indianapolis, Ind.).
  • The US-31 Kokomo Bypass in Indiana.
  • US-31 Plymouth, Ind., to South Bend, Ind.
  • US-231, West Lafayette, Ind.

INDOT has announced that the Interstate 69 construction project from Indianapolis to Evansville, Ind., includes accelerating construction of sections one, two and three from Evansville to near Crane, Ind. Completion of the approximately 67 miles of new interstate highway is expected by 2012, three years ahead of the projected completion date. This will be accomplished because the funds are available from the Major Moves program, the current economy allows INDOT to take advantage of good bid prices on all construction projects, and because Southwest Indiana sorely needs jobs.

INDOT will utilize a combination of design-build and the traditional design-bid-build methods to accomplish this accelerated program.

After severe reductions in Kentucky Road Fund revenue for fiscal year 2009 and fiscal year 2010, the Consensus Forecasting Group (CFG), a bipartisan group of economists that monitors the state’s revenues and economy on behalf of the governor and General Assembly, predicts a slight upturn for fiscal years 2011 and 2012. However, the increase in revenue will not be adequate to undertake new projects, according to Tammy Branham, executive director of the Kentucky Transportation Cabinet (KYTC) Office of Budget and Fiscal Management. She recently made the comments to the Kentucky General Assembly’s Interim Joint Budget Review Subcommittee on Transportation.

The Cabinet’s cash flow model, “using all of the positives we know,” said Branham, will allow “no new projects.” CFG’s planning estimate for Kentucky’s Road Fund predicts revenue for fiscal year 2011 will be $1.222 billion – almost back to the fiscal year 2007 level. And, it will be $1.303 billion for fiscal year 2012. Actual revenue for fiscal year 2009 was $1.192 billion, down from the estimated $1.325 billion estimate at the time the fiscal year 2009-2010 budget was adopted. The CFG estimate in August 2009 for fiscal year 2010 was $1.141 billion, down from the original estimate of $1.405 billion.

The Kentucky State Construction Account has been a major casualty of declining revenue. State construction, budgeted at $161.4 million for fiscal year 2009, was later reduced to $100 million. For fiscal year 2010, in order to help meet a budget reduction, debt service totaling $106 million was postponed through restructuring and not issuing bonds. (Bonds are not sold until revenue is needed to pay for projects that will be funded with bonds.) State construction for fiscal year 2010 has been reduced to $94.6 million from the original $196.4 million.

Branham noted that the budget enacted in 2008 had authorized $60 million in revenue bonds for aviation projects with debt service to be paid from the Road Fund. She said $9 million in bonds had been sold to help fund the Bluegrass Field runway extension. The debt service on these bonds will be $1 million annually. In view of the Cabinet’s financial situation, she said the Cabinet has no intention of selling the $51 million authorized, which would cost the Road Fund $6.4 million annually in debt service.

Targeting major transportation projects that will have a significant impact throughout the state of Ohio and the Midwest, Ohio Governor Ted Strickland is submitting nine applications to the U.S. Department of Transportation for the ARRA Transportation Investment Generating Economic Recovery (TIGER) Discretionary Grant Program. ODOT’s TIGER project applications seek a total of $587,899,855 in ARRA funding.

The Illinois Road and Transportation Builders Association (IRTBA) reports that the economy in Illinois will remain shaky – especially in the private sector. However, the Illinois Jobs Now! program will provide a multiyear robust highway and bridge program. ARRA funding is being applied to paving and road maintenance work, but it does not include any large-scale infrastructure projects in Illinois. The delay in reauthorizing the federal Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users (SAFETEA-LU) is preventing critical projects from moving forward, IRTBA reports. The delay is causing an interruption in the acquisition of equipment as well as difficulties for companies engaging in long-term planning.

IRTBA reports that 2010 will be a good year for the engineering community in Illinois; however, the construction projects that the engineering community will undertake won’t begin until 2011.

The Underground Contractors Association of Illinois (UCA) reports that there is no sign of the underground residential construction market rebounding in 2010. Estimates indicate that there are 70 to 80 months of backlog work that are completed. Labor contracts expire in May, and UCA’s members say they cannot afford pay raises due to the lack of work.

UCA reports that ARRA funds have been applied to the State Revolving Fund (SRF) and that the Obama Administration has increased the allocation of funds to SRF infrastructure projects. The funding is for sewer and drinking water projects. However, according to UCA, municipalities in Illinois do not have funds to begin the projects. The SRF program requires 20 percent local funding; the remaining 80 percent is paid from the SRF.

UCA expects road construction to increase in Illinois in 2010, but there will be little “trickle down” work for underground contractors.

The Associated General Contractors (AGC) of St. Louis, Mo., reports that the commercial construction market in the St. Louis area has not begun to rebound.

“Funding for projects is extremely difficult to attain. There are projects that have been placed on hold indefinitely while they wait for fully executed funding documents,” Leonard Toenjes, CAE, president of the AGC of St. Louis, said.

“Our sources are reporting that the funding stream is so constricted that in order to proceed, some projects are being redesigned and usually downsized; and funding is being sought through consortiums rather than single-source financing.

“Some highway projects in Missouri have received ARRA funding, but for the most part, states are utilizing ARRA funds to backfill their own revenue shortages.

“Without financial institutions willing to fund projects, the outlook for privately funded projects is bleak. Likewise, the steady decline in state revenues doesn’t lend itself to states being inclined or able to fund public works projects or economic development projects through the use of tax incentives.” Toenjes said that a delay in reauthorizing SAFETEA-LU causes problems.

“Transportation departments typically work from a multiyear planning process. The predictability of a funding stream is essential to planning. Every delay in reauthorizing SAFETEA-LU not only impacts the federal funding model, but it also causes local and state funding to become more uncertain,” Toenjes said.

Toenjes pointed out that there are fewer projects being bid in the area with many more bidders on each project. “The cost of constructing a building is a bargain in today’s market – there is a lot of competition. Technology will play a larger role as those tech-savvy contractors who can travel across geographic boundaries can more effectively follow markets and customers.”

Texas Highway Forecast

An Interview with John Barton, P.E., TxDOT assistant executive director of engineering operations

From the Texas Contractor Austin Bureau

The Texas Department of Transportation (TxDOT) hopes to let approximately $3 billion in construction contracts annually in fiscal years 2010 and 2011 – using a combination of state and federal highway tax revenues, federal stimulus funds and state

John Barton, P.E., TxDOT assistant executive director of engineering operations

bonds. John Barton, TxDOT assistant executive director of engineering operations, reports the agency had hoped to let approximately $4 billion in contracts annually. The projected volume does not include projects under Commercial Development Agreements (CDAs), which would be “above and beyond” the estimated totals.

CDAs Adding to the Pot

Observers have noted a change in highway lettings in recent months, with more CDAs being awarded in local lettings than in the statewide letting. Barton said work is being done not only under CDAs, but also for pass-through toll projects. Barton reported that the changes reflect new tools given to the agency by the Legislature, with the intention of bringing in more revenues for transportation projects, with local communities paying “a significant part” of the costs.

In its December meeting, the Texas Transportation Commission gave TxDOT final approval to execute pass-through toll finance contracts for projects in Bowie County (U.S. 82 – $26.2 million), Victoria (Loop 463 – $17.5 million), and Midlothian (U.S. 67 at Rail Port Parkway/Miller Road – $9.8 million; also Farm to Market 663 at U.S. 287 – $2.5 million).

“We’re trying to do as much as we can to make our limited dollars go even further,” Barton said.

Approximately $650 million will be from CDAs over the next two years out of approximately $4 billion in funding for TxDOT, he reported. That represents 15 to 16 percent of the program, and will drop in percentage terms in future years because the Legislature has not provided authority for future operations. Most of the CDA work represents three agreements in the Dallas area. The majority of that work has contracted, Barton said, with “not a lot waiting to be executed.”

“Overall, it’s a small part of our program,” he added. However, leveraging $1.3 billion from three CDAs has allowed $7 billion of work to be done. Use of CDAs is “yet another option” for the department in attempting to meet the state’s transportation needs by performing construction work in different ways, Barton said. Many of the consortiums involve accessing financing, bond and consulting services that could be problematic for individual contractors to obtain.

Those consortiums “have come to Texas from other parts of the world to bid,” Barton added. “We are seeing them reaching out, so that there is quite a bit of diversity… and we see Texas companies participate.”

Barton also said he doesn’t believe the increased use of CDAs has hurt smaller contractors. Those projects typically are put together by a consortium, which acts as “more of a contract manager,” while “the vast majority of the actual construction” is done by contractors serving as subcontractors to the consortium.

Sunset Review

TxDOT underwent “sunset” review in the 2009 Legislature, and is scheduled for another, although more limited, review in the 2011 session. Under the sunset process, lawmakers decide whether an agency should be continued, modified or abolished.

Partisan wrangling in the House of Representatives resulted in the TxDOT sunset legislation stalling in the regular session, but a special session in July provided for continuation of the agency until the next regular session. Barton said he doesn’t believe the additional sunset review will affect the department’s construction or maintenance programs, which he expects will continue to move forward. “The process should be beneficial in increasing the efficiency of TxDOT,” he added.

Barton reported he is confident the legislative debate in 2011 will include conversations regarding the agency’s funding, including how to bring in additional revenue resources. “Those conversations likely will focus on increases in motor fuel or sales taxes as a source of funds for TxDOT programs,” he said. “The discussions should help call more public attention to the agency’s needs and the urgency of upgrading and maintaining the state’s transportation infrastructure.”

Barton said that as a result of the sunset process, the department already has become “more open and transparent to companies and the public. We’ve worked hard on that. The department expects to continue making changes and improvement.”

Barton said the question of how the recently created Texas Department of Motor Vehicles will affect TxDOT’s funding remains unanswered at present.

“It will take some additional resources,” Barton said, “with TxDOT providing office space and additional administrative staff – meaning there will be some additional costs to setting up the agency.”

However, he predicted, “I think it will be a wash initially, while in the longer term it may create additional revenues for TxDOT, since the aim is to register vehicles more efficiently. We hope to reduce costs and create additional revenues … There are some creative ideas about how to do that.”

Funding Issues

Barton reported TxDOT was disappointed in the requirement to return $742 million in highway funds to the federal government, saying the rescission affected $103 million in reimbursement for fiscal year 2010. However, the requirement was not a surprise, he said: “We had planned for it.” The remaining $639 million of the rescission involved planning authority, which means some construction projects planned by the department won’t happen. According to Barton, “we won’t be able to do [them] because we don’t have the planning authority.”

TxDOT did receive a $700 million allocation of federal stimulus funds and is using proceeds from the so-called “Proposition 14” transportation bonds to help finance projects over the biennium. Barton said some regional toll revenues from the Dallas district for the Highway 121 project also will become available.

Meanwhile, Barton said, “we know our transportation needs are great.” The department has worked with the private sector, academic interests and legislators to determine what the needs will be by 2030 and how to go about meeting those needs, he reported. The consensus appears to be that Texas will need $14 billion per year in improvements to meet those needs and to keep road congestion from getting worse.

Congress has been considering a new transportation bill, and state legislative leaders also are looking at the issue, he noted. “The needs are quantified and are real,” Barton said, “but our ability to meet them is limited. We know we don’t have the ability to meet them.”

But Barton believes there will be “real opportunities” to start meeting those needs with support from the public and lawmakers. “I’m sure something positive will come out of the 2011 session,” he said. State and federal officials have been working on proposals that would raise motor fuel taxes, but action on the measures doesn’t appear imminent. The Texas State Legislature will not meet in regular session in 2010.

A report published earlier this year by Cambridge Systematics concludes that Texas will be $256 billion short of meeting its transportation needs if current funding formulas remain unchanged.

At a meeting in El Paso in November, Sen. John Carona, R-Dallas, warned that Texans may have to pay more when they fill up their vehicles’ gas tanks if they want new highways. Carona chairs the Senate Committee on Transportation and Homeland Security, and for the past several legislative sessions has advocated changing the state’s motor fuel tax structure to bring in additional income. Carona noted that the 20-cents-per-gallon tax has been the same since 1991, while the need for highways, and the cost of providing them, has been climbing.

“We are in the critical position in this state where we are growing and will need more roads. But we have no money to build them and no more debt that we can issue,” Carona commented. Under the current tax structure, Texas motorists pay 20 cents to the state and 18.4 cents to the federal government for every gallon of motor fuel they use. Of that 20 cents, 15 cents goes to highway construction and 5 cents goes to help fund public schools.

TxDOT Executive Director Amadeo Saenz reported motorists aren’t filling up their more fuel-efficient vehicles as often as they did previously, and hybrid vehicles also are reducing the amount of fuel taxes collected. If current trends continue, and if the Legislature decides not to increase motor fuel taxes, TxDOT may soon have sufficient funds to maintain only existing roads, according to Saenz.

Sen. Eliot Shapleigh, D-El Paso, a member of the Senate committee, has suggested cities and counties be given authority to levy a temporary local gasoline tax to be used for specific transportation projects. Rep. Joe Pickett, D-El Paso, who chairs the House Transportation Committee, reported he believes there is bipartisan support for increasing the tax.

Regional Mobility Authorities

Regional Mobility Authorities (RMAs), with their usage of Commercial Development Agreements (CDAs) and working in partnership with TxDOT, have changed the landscape of highway construction in Texas since their emergence in 2003. Metropolitan Toll Road Authorities and Regional Mobility Authorities throughout Texas show promise of being quite active in 2010.

“With all the work going on in North Texas, we are the envy of the nation,” said Mark Tomlinson. “With three CDAs (Commercial Development Agreements) starting up at the same time in the Dallas/Fort Worth area later in 2010, the main challenges are going to be suppliers, equipment and workers.” The North Texas projects have been organized by the North Central Texas Council of Governments (NCTCOG), The North Texas Tollway Authority (NTTA), and Dallas Area Rapid Transit (DART) in cooperation with TxDOT.

The North Tarrant Express will be built with two CDAs. The first will develop 13 miles along I-820 and SH 121/SH 183 from I-35W to SH 121. The CDA for Segments 2-4 includes developing master plans for the remainder of the corridors along SH 183 from SH 121 to SH 161, I-820 east from SH 121/SH 183 south to Randol Mill Road, and along I-35W from I-30 to SH 170 in Tarrant and Dallas counties. The two CDAs, with an estimated cost of $5 billion for the entire 36-mile corridor, were awarded to NTE Mobility Partners, with Cintra, Concesiones de Infraestructuras de Transporte, S.A. and Meridiam Infrastructure SICAR as equity members.

The reconstruction in North Dallas of 13 miles of Interstate Highway I-635 (LBJ) from just west of I-35E to just east of United States Highway (US) 75 and south on I-35E from I-635 to Loop 12 was awarded to the LBJ Infrastructure Group, with Cintra, Concesiones de Infraestructuras de Transporte, S.A as the equity owner.

The estimated $1.02 billion DFW Connector, also known as the Grapevine Funnel project, will expand the congested area of State Highways 121 and 114 north of DFW Airport. This CDA was awarded to NorthGate Constructors JV, with Kiewit Texas Construction L.P. and Zachry Construction Corporation as Equity Owners.

The Central Texas Regional Mobility Authority awarded two projects in December, with the low bids for both coming in well below the engineer’s estimate. The first phase of the 6.2-mile Manor Expressway/ US 290 East is the largest transportation project in Central Texas to be funded by the federal stimulus bill. The 183A Northern Extension is being constructed more than seven years ahead of schedule and will extend the existing 183A toll road an additional five miles to the city of Leander.

Another ARRA-funded project is scheduled to be awarded this month by the Alamo Regional Mobility Authority (Alamo RMA) after receiving direction from the Federal Highway Administration (FHWA) to proceed with a Categorical Exclusion and construct the US 281 Super Street project. The Alamo RMA is also moving forward on an Environmental Impact Statement for another ARRA project to construct four non-toll direct connectors between US 281 and Loop 1604 on the north side of San Antonio. The Alamo RMA has received $140 Million from the Federal Stimulus program for this project. For the long term the Alamo RMA is studying improvements to IH-35 from downtown San Antonio to the Bexar/Guadalupe County Line, about 16 miles to the northeast.

The Harris County Toll Road Authority plans to open bids in early 2010 for contracts to widen the Sam Houston Tollway South Belt between US 59 south and State Highway 288.

The North East Texas Regional Mobility Authority (NET RMA) will soon be awarding a contract for their Toll 49 Segment 3B project through a Design/Build CDA to one of four firms on their short list. Toll 49, a proposed corridor in Northeast Texas connecting Tyler, Longview and Marshall, is the NET RMA’s top-priority project. Other NET RMA priority projects in various stages of planning or construction include US 59 Spur north of Marshall; the George Richey Road Expansion in Longview; State Highway 149 widening south of I-20; the Texarkana West Loop; Loop 571 in Henderson; and I-20 Express Lanes from Terrell to the Texas/Louisiana border in conjunction with a proposed passenger rail line serving the same distance.

The Grayson County Regional Mobility Authority (, along with the Paris District of TxDOT, hopes to begin working with a consulting firm this month on plans for the Grayson County Tollway, which would serve as a northeast-to-southwest bypass of Sherman and Denison.

In the Lower Rio Grande Valley, the Hidalgo County Regional Mobility Authority (HCRMA) anticipates placing the Hidalgo County Loop project for bid in late 2010, according to Godfrey Garza Jr., executive director of the HCRMA.

As TxDOT funds have felt the economic pinch over the past couple of years, RMAs have brought different funding into the picture as they promise to accelerate new road construction in our growing metropolitan areas.