March 7. Widen I-77 will be present an analysis of the private tolling business model, including the planned I-77 project, this Thursday March 10 at Cornelius Town Hall.
The presentation, which starts at 7 pm, will highlight common features of private toll road projects across the country.
The group has not made a public presentation in nearly a year. The SH130 bankruptcy in Texas last week was an eyeopener for some local business and political leaders. SH130 is a public-private partnership that includes Cintra, the same company involved in the $650 million plan to widen I-77 between Charlotte and Lake Norman.
“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.”
He cited several “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 $600,000 instead of the needed $20-30 million per year.
• The companies who forecast 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 $12 million 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 Gov. McCrory has asked NCDOT Secretary Nick Tennyson to re-evaluate Cintra, its business model, and its contract with the state,” added WidenI77 spokeswoman Sharon Hudson. “We are confident that a good faith review will result in this contract being cancelled.”
WidenI77.Org is a 501 c 3 organization dedicated to widening I-77 with general purpose lanes and to educating the public about the problems and inequity of the HOT lane approach. The group believes toll lanes are an expensive, non-solution that will negatively impact the local economy, increase congestion on the general purpose lanes, and unfairly burden drivers.
The Lake Norman Chamber of Commerce has come out against the Cintra/NCDOT toll plan as well.
