By DAVID BORAKS
A war of words is continuing over the NC Department of Transportation’s plan to widen I-77 north of Charlotte by hiring an outside contractor to finance, build and operate toll lanes. Opponents are helping to shine a spotlight on possible shortcomings with the state’s chosen contractor, even as state transportation officials are defending the plan.
In a commentary on DavidsonNews.net, NC Board of Transportation chair and Charlotte business executive Ned Curran fired back against what he says is “misinformation” about the project. (See “Transportation board chief argues benefits of I-77 widening plan.”) Among other things, he said, no toll rates have been set. He also said the plan to hire Spanish construction firm Cintra Infraestructuras to implement high-occupancy toll lanes (HOT lanes) offers a way to widen the congested road in four years, instead of waiting two decades.
Meanwhile, critics of the plan in the Lake Norman area are pointing to Cintra’s problems with similar toll lane projects in other states, including Texas and Indiana.
“There is a set of accumulating facts here that should hit us between the eyes,” Cornelius Commissioner Dave Gilroy said in an email to fellow toll lane opponents last week.
Among other things, Gilroy and others are pointing to the possibility that Cintra will default on SH 130, a toll lane project in San Antonio, TX, that was built in a similar fashion to what the NC DOT wants to do on I-77. That road opened in 2012, but toll revenues have been disappointing. Earlier this month, Moody’s Investor Service issued a new warning about the project, saying the company lacked the cash to meet a June 30 debt payment.
Last fall, Moody’s downgraded its rating on the project’s debt.
A similar project in Indiana is also in trouble, and the Cintra partnership running the road is seeking to renegotiate terms. Experts say the state could opt to take over the road.
That actually sounds like a good deal to state Sen. Jeff Tarte (R-Cornelius). He’s been a longtime supporter of the HOT Lanes project as a way to get I-77 widened sooner than it would be, given the state’s lack of transportation funding. But even Tarte has an eyebrow raised at newly-released information suggesting that toll rates could be unreasonably high.
Tarte said he remains a supporter, but he wants the NCDOT to let legislators review any final contract with Cintra before it’s signed. His big concern: NC puts protections in place to ensure that private investors bear all the financial risks, while also allowing the state to take over the road if needs to.
“We don’t have to worry about whether it’s financially successful or not, if we have the right contractual provisions,” Tarte said. “The risk should be on the concessionaires.”
In an article Sunday about Cintra’s challenges, The Charlotte Observer quoted NCDOT Director of Technical Services Rodger Rochelle as saying the state has confidence in the Spanish contractor.
“We’re confident in their financial qualifications,” Rochelle told the paper. “We did a rigorous review before they were announced. We have protections in place. If the project were to fail, it’s Cintra’s failure, not the state’s.”
NC DOT officials say they’ve been transparent throughout the process and would be happy to brief the legislature on the contact.
DOT spokeswoman Jennifer Thompson told DavidsonNews.net: “NCDOT submitted reports on the project in April to both the Joint Legislative Commission on Governmental Operations and the Joint Legislative Transportation Oversight Committee. We have no issues providing a full briefing, if requested, to the (legislature) before signing the final financial contract.”
The recently rekindled debate also is focusing on the use of toll lanes to help with congestions. There’s a fundamental disagreement between the NCDOT and its experts, who argue that so-called “managed lanes” will provide a reliable commute at guaranteed speeds (45 mph) and opponents who can’t stomach the idea of paying to use the highway.
The arguments by state officials and their consultants use studies, spreadsheets and tables, and talk about average costs, “dynamic pricing” and other economic factors. Managing traffic will be driven by market-forces, the DOT argues, and they use numbers to make their case. That’s cmplicated and a hard sell.
Opponents are making their case using the most extreme example: A full 26-mile commute at peak hour. So a Mooresville driver would pay $9 inbound and $11.75 outbound at the height of the commute.
The NCDOT’s problem is how to argue its case in a world where snappy headlines can rule the day.
On Sunday, Charlotte Observer columnist Mark Washburn, a Davidson resident, came down squarely against tolls, calling the project a “boneheaded mistake” and labeling the tolls “road ransom.”
We’ll be hearing more about this. Assuming the NCDOT successfully negotiates a final contract with Cintra, there still must be public meetings to help set toll rates and, it appears, a legislative review. Stay tuned.
June 28, 2014, Charlotte Observer, “Toll road firm had setbacks” – a report on Cintra’s problems with other toll road projects.
June 28, 2014, Charlotte Observer, “NC’s toll scheme for I-77 misguided” – Mark Washburn’s column
June 19, 2014, TexasTribune.com, “Report: SH 130 Toll Road Company in Danger of Default”.
June 19, 2014, TexasTribune.com, Moody’s downgraded its rating on the project’s debt.