Highway Robbery

[The Texas Transportation Commission] chairman is perplexed by some details of the new public-private partnerships being forged to build thousands of miles of roads quickly. During a break in a recent commission meeting, [chairman Ric] Williamson shook his head in befuddlement when asked why the state has begun paying millions of dollars in "stipends" to companies because they weren't picked to build some of the toll roads.

The notion of paying the losers, Williamson agreed, is "nutty as a fruitcake." But the department is bound by law to do it, he said, a law Williamson suggested might be a holdover from the era of big government.

Actually, million-dollar parting gifts for the losers is a more recent Texas custom, courtesy of the huge 2003 transportation bill sponsored by Mike Krusee, a Republican state representative from Round Rock and chairman of the House Transportation Committee.

Already, TXDOT has paid roughly $4.3 million to companies whose proposals to spearhead two different road projects were rejected, according to documents obtained by The Texas Observer under the state's Public Records Act. As much as $10 million more will be doled out in the coming months.

The payments, sometimes called "work-product stipends," or "consolation stipends," are needed to encourage competition and innovation, TXDOT officials say. But agency records give no indication that the stipends are actually encouraging more companies to compete for the jobs.

Instead, records show the same small pool of companies, sometimes in different configurations and under different partnership names, vying for the contracts. Sometimes they're winners. Sometimes they're losers. Either way, they walk away with a hefty bundle of cash.

  Texas Observer

Maudie, we're in the wrong business.