The Texas Department of Transportation expects smooth sailing ahead, to the tune of $5 billion for FY 2006, up substantially from the $4.6 billion that TxDOT spent on highways in FY 2005 and $3.5 billion in 2004. The passage of SAFETEA-LU, the Federal-aid Highway Program re-authorization bill will bring Texas' annual federal-aid allocation from a current level of $2.1 billion to $2.9 billion. An extra $669 million will go for 220 special projects specifically requested by members of the Texas Delegation.

Keep your eyes on the Trans-Texas Corridor. Authorization of a new $15-billion Private Activity Bond program for intermodal transportation facilities is planned to encourage private sector investments and partnerships, fitting the TTC project's design-build format. This past March, TxDOT and Cintra-Zachry, an international consortium of engineering, construction and financial firms, formalized a partnership to develop TTC-35, the first element of the Trans-Texas Corridor from Oklahoma to Mexico. Cintra-Zachry has proposed to invest $7.2 billion to help build TTC-35. The first phase of their proposal calls for building a $6-billion toll road between Dallas and San Antonio by 2010. Still in the planning stage, the route has yet to be determined and no right-of-way has been purchased.

Also this past year, the Texas Transportation Commission accepted the three-year statewide program of projects, which includes 2,885 highway, 1,033 transit, and 13 statewide transit projects. The commission also gave approval to a $1.5-million feasibility study for the La Entrada al Pacifico Trade Corridor. The La Entrada al Pacifico Trade Corridor, designated as a National High Priority Corridor, runs from Lamesa to Midland-Odessa, through Laredo, to the developing Pacific port of Topolobampo in the Mexican state of Sinaloa.

"The La Entrada project," Commission Chairman Ric Williamson said, "will lay the groundwork for an economic boom that will last 100 years if we do it right."

The economy has begun to recover, according to GPA numbers, and continuing housing growth surrounding larger cities has created a demand for water, wastewater, electric, and natural gas utilities, a demand which is expected to continue rising in 2006. The uncertainty is in how much the demand will be funded. Rural co-ops have been affected by rising energy prices and, being the middlemen, they can absorb only a limited amount of loss. Utility construction in rural areas, affected by Federal cuts, may attempt to supplement their new construction funding through the bond market where interest is currently low. Although State agency spending is expected to grow by a mere fraction of a percentage point in 2006, the Texas Water Development Board recently approved financial assistance totaling $105,105,000 for improvements to drinking water and wastewater systems in Houston, Pharr, Travis County, and East Rio Hondo.

Conservative new commercial construction over the past two years has helped fill vacant office and industrial space as the economy improves. The ebb and flow could change again by the end of 2006. As the office markets in Houston, far north Dallas, Austin, and San Antonio experienced a positive absorption rate this year, hopes for new construction demands should pick up in late 2006. Houston leads by far in the filling of vacant office space; however, the absorption zones are spotty, varying greatly from one suburban area to another, according to Grubb & Ellis quarterly reports. There are suburban areas in the same cities that still report office space as being overbuilt.

While several high-rise condos are under construction in Dallas and Houston, none are as tall as the 60-story mixed-use condominium/office tower planned by Bill Cawley of Cawley Wilcox Cos. of Dallas and Fort Worth architect Ken Schaumburg for downtown Fort Worth.

The industrial market is making growth headway, but has been lagging behind the office market, according to Grubb & Ellis. In the Dallas/Fort Worth metroplex, warehouse/distribution has outpaced the general industrial market for filling vacant facilities, particularly in the DFW Airport vicinity. Laredo's International Duty Free Zone continues with strong growth of build-to-suit warehousing/distribution facilities. San Antonio is the only city where speculative construction continues with any strength, riding on the coattails of the Toyota Tundra manufacturing plant, which is scheduled to go online in late 2006.

The Port of Corpus Christi Authority (POCCA) contracted a major expansion in November 2005, with plans to develop Corpus Christi as a major container terminal for the Western Gulf Coast and spark economic expansion in the Texas Coastal Bend as completion nears in 2007.

The healthcare market will continue as the brightest avenue of vertical construction throughout 2006 with hospital expansions and new facility construction. K-12 school construction will also remain strong. College and university campus construction, although not as energetic as five years ago, is still expected to grow at a 2- to 3-percent rate.

It is still unclear how the Hurricanes Katrina and Rita recovery will play out. Recovery programs have been soaking up a lot of dollars, which may result in Congress cutting funding to a number of Federal programs. The Department of Defense set into motion sizeable upgrades for Fort Bliss and Fort Hood in 2005, but the war in Iraq continues to divert funds from construction and upgrades at our stateside bases.

On the supply side, a new cement import storage terminal with an annual throughput capacity of 1.5 million metric tons, a joint venture between Ash Grove Texas Cement and Alamo Cement, will be completed this year at the Port of Houston. Unlike North and Central Texas, South Texas has no native limestone, so suppliers there find it more economical to import their cement via seagoing shipping.