Thursday, July 25, 2024

Louisiana lawmakers approve $2.1B Calcasieu River bridge deal

by BIZ Magazine

(The Center Square) — Lawmakers on Tuesday approved a public-private partnership to build a $2.1 billion toll bridge over the Calcasieu River after officials renegotiated an initial deal rejected in October.

Joe Donahue, the newly appointed Secretary of the Department of Transportation and Development, presented a series of changes the department negotiated to bring down the cost of tolls and the burden on taxpayers to replace the 71-year-old Calcasieu River Bridge near Lake Charles.

State law requires approval from the Legislature, and both chambers represented on the Joint Transportation, Highways and Public Works Committee voted Tuesday to approve the new agreement with only two lawmakers opposed.

The vote reverses an 8-6 decision in October to reject the public-private partnership, known as a P3.

“No one likes tolls, but I think we have a better one now,” said Sen. Mark Abraham, R-Lake Charles.

The renegotiated agreement would expand a 25-cent toll with a vehicle size limit for locals to all noncommercial vehicles in a 5-parish area. It would reduce the toll for large trucks from $12.50 with a transponder to $8.25. Large trucks without transponders would pay $12.36 instead of $18.73.

“The previous toll schedule, it really did place an outsized burden on those commercial trucks … and so this has brought it in line with the rates that are being charged to passenger automobiles and medium trucks,” Donahue said.

The rate reduction is “funded through additional public fund contributions to be finalized at financial close,” according to Donahue’s presentation.

The new deal also returns 15% of any toll profits to the state, rather than no equity distributions included in the agreement presented in October.

Other changes include reducing LA DOTD retained costs from $415 million to $280 million, contingent on approval of design changes that would eliminate the need to relocate railroad and pipeline infrastructure.

Another $128 million was saved through declining interest rates since the October meeting, Donahue said.

The new toll rates are below what DOTD predicted when the project was initially considered at $1.7 billion. If a new deal weren’t approved, the state would likely pursue a fully public toll bridge with higher rates, Donahue said.

“This is the best opportunity to lock in the lowest rates for locals,” he said.

While some local business leaders testified in support of the bridge, others were strongly opposed.

Cully Frisard, CEO of Frisard’s Trucking in Gramercy, told the committee the new rates, while lower, will cost his company at least $100,000 a year and up to $16 million throughout the 50-year tolling period.

“That cost will be passed on to my customer, which then will be passed to your constituents because I deliver the shoes you wear, the food you eat, the products you buy at the store,” he said, questioning why lawmakers aren’t considering refurbishing the bridge, with DOTD officials have said would cost between $200 million and $300 million for another couple decades.

Others raised warnings about the potential for rising toll rates in the future and the impact on truckers.

“We pay federal taxes to fund the highway system. We pay state taxes,” Renee Moore, with the Louisiana Motor Transport Association, told the committee. “That’s what’s supposed to fund our interstate system.”

The state’s funding for the project remains largely the same, with $800 million in public funds from federal grants, $250 million in vehicle sales taxes, $85 million in State General Obligation Bonds, and $150 million from the State General Fund. Another $409 million will be needed to decrease the large truck toll rate, which could come from bonding future vehicle sales tax and other sources.

The P3 contract is set to be executed on Wednesday before approvals from the State Bond Commission in meetings in February and March. A final close is slated for April 5.

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