March 10. With Cintra’s sale of an equity stake in the I-77 toll lane project and the recent bankruptcy of Cintra’s SR 130 toll road in Texas, Widen I-77 is holding a discussion meeting at Cornelius Town Hall at 7 pm tonight.
The group will present an analysis of the private tolling business model, including the planned I-77 project. The presentation will highlight common features of private toll road projects across the country.
“These projects typically use unrealistic traffic and revenue numbers that virtually ensure failure. In the North Carolina contract, taxpayers will potentially be on the hook for hundreds of millions of dollars if that happens,” said WidenI77 spokesman Kurt Naas. “This is in direct contradiction to the assurances of ‘taxpayer protection from losses’ we have been hearing about recently from public officials.”
Public officials like NC Sen. Jeff Tarte and NC Rep. John Bradford have climbed on the anti-toll bandwagon, as well as the mayor of Huntersville, John Aneralla, and the Cornelius Board of Commissioners.
In a press release, WidenI-77 organizers said these were reasons for concern:
+The estimates of projected traffic numbers are vastly inflated, to meet payments the N.C. project would have to be the second-highest grossing toll lane in the country. Our current population more closely resembles I-15 in Salt Lake City, which grosses $600k instead of the needed $20-30M per year.
+Companies forecasting the traffic are often paid “success bonuses” if the project is funded, thereby creating an inherent conflict of interest.
+For I-77, the NC taxpayer will subsidize as much as $12M per year for the first five years if required revenues fall short.
+The loan terms allow Cintra to defer interest payments for several years, adding millions more to the outstanding debt.
+The contract contains a section titled “Compensation on Termination for Developer Default,” which clearly contemplates the possibility of a taxpayer bailout.
+The current plan calls for nearly $300 million in public and private debt, putting the potential taxpayer liability in the hundreds of millions.
”We are pleased that Governor McCrory has asked NCDOT Secretary Nick Tennyson to re-evaluate Cintra, its business model, and its contract with the state,” added Widen I-77 spokeswoman Sharon Hudson. “We are confident that a good faith review will result in this contract being cancelled.”
