In 2006, the Texas Transportation Commission-TxDOT's governing board-approved a revised approach to develop two P3 procurements, one calling for the development of at least the I-820 corridor as contemplated in the canceled procurement, and a second to create a Master Development Plan for improvements to additional highway segments in the region. This multi-segment system of planned improvements, which included I-35W, was named the North Tarrant Express.
The Master Development Plan would assess the financial feasibility of the additional segments and prioritize their implementation. The winning proposer would also have the right of first refusal to construct any of these sections on a P3 basis. By including the additional segments in the procurement, TxDOT hoped to generate greater interest from the private sector since a network of tolled managed lanes would be financially more attractive than a standalone facility. TxDOT did not believe that all segments necessarily would be feasible to build using a P3, but it would benefit from the private sector's expertise in conducting such a feasibility analysis.
A new dual P3 procurement process began in December 2006 for the I-820 SH 121/SH 183 corridor as well as the Master Development Plan. From a field of two finalists, TxDOT awarded both P3 opportunities to North Tarrant Express Mobility Partners (NTEMP) in January 2009. NTEMP is a private consortium composed of Cintra U.S., Meridiam Infrastructure Finance, and the Dallas Police and Fire Pension System. Cintra, a Spanish company, is a highly experienced toll road developer and operator. Meridiam is a French firm and is one of the largest investors in and developers of public infrastructure facilities in the world.
In June 2009, TxDOT and NTEMP executed the P3 agreements and formally concluded the competitive bidding process, a milestone referred to as reaching "commercial close." NTEMP's proposal provided the best value to the state for the construction of the NTE Phase I along the I-820 corridor. NTEMP's P3 concession will extend over a 52-year period. It began construction on Phase I in late 2010.
While negotiation of the I-820 corridor P3 was taking place, TxDOT revised its schematic designs for Segments 3A and 3B along I-35W to include tolled managed lanes and began an environmental review process.
As construction on Phase I began in 2010, NTEMP also undertook its master planning work for the I-35W corridor. NTEMP refined TxDOT's initial designs for Segments 3A and 3B and prepared a plan of finance. NTEMP expected that these segments would be constructed on P3 basis in the same manner as Phase I. In May 2010, the company informed TxDOT that it was ready to begin negotiations on a P3 agreement to build these sections of the NTE.
In July 2011, TxDOT and NTEMP agreed to a plan where NTEMP would design, build, finance, operate, and maintain Segment 3A and also operate and maintain Segment 3B, which would be financed and constructed by TxDOT. TxDOT felt that it could achieve superior value for money by delivering Segment 3B on a traditional design-bid-build basis, rather than asking NTEMP to deliver it on a design-build basis with its own financing. The plan was formalized under a new 52-year P3 executed in March 2013. The agreement did not include Segment 3C, which TxDOT initially planned to finance and construct itself at a later date. In early 2016, NTEMP submitted a proposal to TxDOT to develop Segment 3C, similar to Segment 3A, and the two parties expect to reach agreement on commercial terms by early 2017. TxDOT gained environmental approvals for all three segments in 2012.
As with Phase I, the private developer will set the toll rates for the managed lanes and collect toll revenues from both Segments 3A and 3B (and ultimately 3C) over the life of the concession. Toll rates must be set in accordance with a Regional Managed Lanes Policy established in 2006 by North Central Texas Council of Governments (NCTCOG) and its governing board. The policy provides a basic framework to help guide the development of new projects. The P3 agreement sets out a revenue sharing mechanism with TxDOT if toll revenues exceed defined thresholds.