State Says Texas Bankruptcy Should Not Affect I-77 Toll Lanes

CHARLOTTE, NC — It may be the last, best chance for the state of North Carolina to get out of a controversial, 50-year contract to put toll lanes on I-77. A bankruptcy in Texas has the state taking another look at the deal, but it may not be enough to stop the project.

“That’s a toxic word,” says North Carolina Secretary of Transportation Nick Tennyson. “I mean there are none of us who like to hear the word bankruptcy.”

Cintra also has a 50-year contract for SH 130 in Texas. Just four years in, traffic is 60 percent below predictions. It’s led to outstanding debt, junk bonds, and bankruptcy. A failing toll road.

Critics, like Kurt Naas of Widen I-77, say it’s part of a pattern for the Spanish company.

“It’s not a surprise it’s overestimated,” says Naas. “What is a surprise is that governments keep doing this over and over and over and we don’t seem to learn from other examples.”

Cintra sets up limited liability companies for each project, to prevent their financial situations from affecting each other. Governor Pat McCrory is sending Secretary Tennyson to Texas on Monday to learn more about the bankruptcy.

“The govenor has said to me, ‘I want you to look into this. I want to make sure that we are protected’,” says Tennyson. “The citizens of North Carolina are protected in every way we can be.”

“This particular project is obviously not a success it’s a separate corporation and what I need to determine is does this impact our existing project,” said Govenor McCrory from Raleigh on Thursday.

I-77 Mobility Partners, a subsidiary of Cintra, has a 50-year deal to build and manage the lanes on a 26-mile stretch of the interstate north of Charlotte. The private company is covering 85% of the $650 million price tag, and assuming the majority of the risk.

But many say this is just another bad contract, based on unrealistic traffic projections. The state would have to compensate the company if revenues fall below a certain threshold, with your tax dollars offsetting toll road struggles.

The state says the Texas bankruptcy doesn’t impact the I-77 toll lanes contract.

“There’s nothing about an independent contract, or and independent project, having financial trouble that affects our project,” says Tennyson. “That’s a key part of protecting ourselves.”

Cintra also went through a bankruptcy, and a contract default, on a toll road in Indiana.

I-77 Mobility Partners is four months into the construction process. The managed lanes are expected to open in 2018.