On Friday, the Texas Department of Transportation began the work to terminate the SH 288 Comprehensive Development Agreement (CDA), which would reduce tolls on managed lanes.
The state said terminating the agreement would place the SH 288 managed lanes in Harris County under state control and allow the state to lower toll rates. Terminating the agreement would also enable TxDOT to move forward with adding more free lanes to the state highway.
“Building roads, reducing tolls, and saving taxpayer money are top priorities,” Texas Gov. Greg Abbott said. “All three are achieved with the Texas Department of Transportation terminating the SH 288 Comprehensive Development Agreement. It will allow the State of Texas to receive over $2 billion in added valuation. TxDOT will use the added value to slash future toll charges and to build free lanes on that segment of State Highway 288.”
Officials said the daily toll rates could be cut by as much as 50 percent in the next few years. Additionally, TxDOT said it would be prepared to begin constructing more free lanes on SH 288 by 2030, eliminating contractual restrictions and repayment requirements specified in the current agreement.
“I have worked every day for the last few weeks with TxDOT, the Governor, and the Attorney General to bring about this historic action to terminate the SH 288 Comprehensive Development Agreement with a foreign company,” Lt. Gov. Dan Patrick said. “It was a team effort. We will provide meaningful relief for Texas drivers along this corridor. Securing a more than $4 billion asset for just $1.7 billion will not only benefit Texas drivers, it will also enable TxDOT to continue investing in and advancing crucial roadway projects across the state. This strategic action demonstrates our commitment to making fiscally responsible decisions and prioritizing the best interests of Texas and its residents.”
TxDOT said the cost of buying out the contract is substantially below the value of future toll revenues on the corridor, and expects the “buy out” payment of $1.7 billion would be paid off with future toll revenue bonds. Additionally, the department said, Texas can pay off debt at least 10 years earlier than the current agreement, allowing the department to remove future tolls on the road.