Cintra grabs I-77 public private partnership in NC
I-77 tolls could be $9 to $11, study says
By the Charlotte Observer
Monday, June 23, 2014
A Mooresville-to-Charlotte round trip on planned Interstate 77 toll lanes is projected to cost $9 during the morning rush hour and at least $11 in the afternoon, according to state documents obtained by a Lake Norman area citizens group.
Widen I-77, which opposes tolls on N.C. interstates, obtained the documents through a Freedom of Information Act request.
The documents predict that Mooresville-to-Charlotte tolls will jump to at least $20 one way by 2035, according to the group.
Total toll payments are expected to be $13 billion over the life of the state’s 50-year contract with the company selected to design, finance, build and manage the lanes, according to the documents.
“If the actual tolls are even close to these predictions, the I-77 toll project will siphon millions of dollars every year out of the Lake Norman economy and send it to a foreign company,” Widen I-77 spokesman Kurt Naas said in a statement. “It will be an economic catastrophe.”
Officials with the N.C. Department of Transportation have said they don’t anticipate toll rates being that high, Naas said, but they’ve released no revised estimates.
In April, the state selected Cintra Infraestructures S.A. to begin work on the toll lanes as early as December.
State officials said North Carolina will contribute $88 million toward the $655 million project, with Cintra paying the rest. In return, Cintra will receive toll revenues for 50 years.
By 2018, state officials have said, motorists will have the choice of driving north into Iredell County on regular lanes or the toll lanes.
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Link to article here.
Public-Private Partnerships Intertwined with Charlotte’s I-77 Toll Lanes Deal
By Ann Kane
July 2, 2014
Watchdog Wire
Toll lanes may not be sexy political fare going into the dog days of summer, but they’ve become a heated issue in the Queen City. Some believe the future of North Carolina’s infrastructure hangs in the balance.
The deal to design and build high occupancy toll lanes or HOT Lanes on the I-77 corridor running north out of Charlotte for 26 miles has put a spotlight on several concerns including:
• “The price tag on this project is expected to reach $655 million. NCDOT will contribute $88 million and Cintra will invest $234 million of its own money. Cintra will borrow another $315 million in government-backed loans.” (see Civitas Institute, June 25)
• Cintra is a Spanish-owned company with a poor track record in toll road building and is facing bankruptcy and Moody’s downgrading in some states. (see Watchdog Wire, April 30, 2014)
• Rep. Thom Tillis, Speaker of the North Carolina House and candidate for U.S. Senate, has supported HOT Lanes and the public-private partnerships or P3s which are being used to finance the building of toll roads.
• P3s are being questioned by concerned citizens because of the potential harm to the public trust when taxpayer money is used to further crony capitalist politics. (see Watchdog Wire, March 7, 2014)
• Conservative activists involved in researching and informing legislators and the public over the years about the consequences of the I-77 toll lanes are the group Widen I-77 and Chuck Suter of the website Constitutional War.
Suter recently found that Thom Tillis was one of the sponsors of a 2008 NC law that set up the ability to form public-private partnerships in the state. (See Suter’s video posting on his website).
Suter also found a Carolina Business Review interview with Steve Crump from May 13, 2011 in which Tillis talks about his support of HOT Lanes. (See full interview at CBR YouTube channel, and toll road discussion at the 18:30 minute mark).
Now that it has come to light that the deal with Cintra may mean a $21 round trip daily commute for drivers going the full length of the toll lanes, many are asking how North Carolina could put so much at risk.
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Link to article here.
North Carolina selects Cintra for I-77 'HOT lanes'
By David Tanner
Land Line Magazine
June 30, 2014
A Spanish company that runs the Indiana Toll Road has been chosen to build and manage a public-private partnership along Interstate 77 in Charlotte, N.C. The North Carolina Department of Transportation selected Cintra to build and manage 26 miles of high-occupancy toll lanes, known as HOT lanes, in both directions of I-77 from the I-277 interchange to N.C. Route 150.
The total cost of the project is estimated at $655 million. Cintra announced it will begin construction in early 2015 and the new lanes will open to traffic in mid-2018. Construction will take place in three phases of 2.2 miles, 14.9 miles and 8.8 miles. According to the contract, Cintra will control the lanes and collect the tolls for 50 years through the year 2068.
Cintra’s estimated $14 billion toll road portfolio in the U.S. includes the Indiana Toll Road, Chicago Skyway, North Tarrant Express in Dallas and a failing SH 130 that connects Austin and San Antonio in Texas.
In June, Moody’s Investor Service predicted that Cintra and SH 130 partner Zachry American Infrastructure could soon default on its debt payments unless they could restructure their obligations with the banks.
Moody’s has downgraded the SH 130 company’s bond rating twice since April 2013. Traffic on the SH 130 has not lived up to projections despite an increased speed limit, and many truckers choose to stay in traffic on I-35 rather than pay a $29 toll to bypass Austin.
In 2006, Cintra paid $3.85 billion to control the Indiana Toll Road alongside Australian partner Macquarie. The contract with Indiana allowed the private consortium to more than double the toll rates on truckers within five years and prevents the state DOT from fixing up nearby toll-free roadways that compete with the Indiana Toll Road for traffic.
The contract also authorizes future toll rates to be indexed to inflation through the end of the 75-year contract in 2081. Cintra and Macquarie’s 2005 lease of the Chicago Skyway is on the books to last even longer, 99 years, through 2104. Cintra is a subsidiary of Ferrovial, a Spanish company with 65,000 employees worldwide that operates London’s Heathrow Airport and other infrastructure assets.