SH 130 bankruptcy proceeding on schedule, toll road to continue operation

AUSTIN (KXAN) — Central Texas tollway SH 130 should continue business as usual, and its operating company’s bankruptcy proceedings are moving forward, following a hearing in federal bankruptcy court Friday.

In the routine, first-day hearing, U.S. Bankruptcy Judge Tony Davis approved agreements made between the tollway operating company, SH 130 Concession Co., and its creditors. Attorneys for the tollway company also made sure payments would be made to certain vendors necessary to keep the daily operation of the toll road uninterrupted. Those vendors include a technology company supplying the toll collection system and a local concrete company, according to testimony at the hearing.

“For us, it is going to be business as usual,” said Steve Thoreson, general counsel for SH 130 Concession Co. Thoreson reaffirmed the state of Texas “is not liable for any of [the concession company’s] debts.”

SH 130 Concession Company is an independent company formed by Cintra and Zachary American Infrastructure. Texas owns the entire highway, but SH 130 Concession Co. operates and maintains the lower 41-mile portion between Seguin and Austin. The state operates the northern portion. The highway opened in 2012, and it has the highest speed limit in the country: 85 mph.

KXAN first reported on the company bankruptcy Wednesday. The highway offers an north-to-south alternative to the I-35 corridor between San Antonio and Austin, but lower-than-expected toll revenues have plagued the project. Two years ago the company was reported to be in danger of defaulting on its debts. The toll road company attributes the low revenues to the worldwide financial crisis that began in 2007, among other issues, according to bankruptcy filings.

The toll company used private funding in addition to a $430 million investment from the federal government on the project. The toll road company’s payments on the federal loan are supposed to start next year. The project cost $1.32 billion overall, according to federal documents.

SH 130 toll road cost breakdown

  • $685.8 million – Senior bank loans
  • $430 million – TIFIA (Federal) loan
  • $209.8 million – Private equity
  • $2.3 million – Interest income

Source: Federal Highway Administration

State officials and the toll road company have both said the bankruptcy should not impact the road or have a financial impact on taxpayers.

State Sen. Kirk Watson, D-Austin, said the bankruptcy filing by Cintra shouldn’t impact taxpayers, toll road users or the state.

“Traffic and revenue on that part of the road hasn’t reached projected levels and Cintra has taken the hit, not taxpayers,” Watson said March 2 in a prepared statement. “Use of that section will continue to grow and be there as drivers have more need of it.”

Texas Department of Transportation has echoed Watson’s statement, saying the bankruptcy shouldn’t affect taxpayers and drivers. TXDOT said the state isn’t liable for the company’s debt.

The next bankruptcy proceeding for the toll road will take place April 6.

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