DOT Chief Says I-77 Bill Would Cost $800M For Penalties, Construction
The head of the NCDOT says a bill canceling a contract for toll lanes on I-77 north of Charlotte could cost the state $800 million - and may not prevent the state from using tolls. The cost includes cancellation penalties as well as money for the DOT to complete the project by itself.
House Bill 954 passed the House on June 2 and is now in the state Senate, where it was referred the Transportation Committee. It's not clear when the committee might take it up.
In a June 9 letter to the committee chairs, Transportation Secretary Nick Tennyson says the bill calls on the DOT to cancel the contract, but not the project itself.
Meanwhile, he questions whether the bill would halt tolls, which have been a major focus of a citizen campaign against the I-77 project. The bill would prohibit the state from signing any more public-private partnerships (P-3) like the one for I-77. "However," Tennyson writes, "the bill does not prohibit the use of tolls."
A state auditor's report last year said DOT would have to pay up to $302 million to terminate the contract with I-77 Mobility Partners, a subsidiary of Spain-based Cintra.
Finishing the widening project would cost another $500 million, Tennyson says in the letter.
Tennyson also criticized other provisions in the bill, as well as statements by bill supporters, including:
- The bill calls on the DOT to cancel the project because of a developer default. "The Department is not aware of any such default," Tennyson writes in the letter.
- He says the bill's proposal to put a dozen other projects on hold to pay for cancellation doesn't work, because some of the projects use "bonus allocation" funds - money only available if the toll lane project is completed. .
- Tennyson says the bill would create confusion over other road projects because it lets lawmakers overrule local decisions.
Project opponents don't like the idea of toll lanes and they say the contract's 50-year term is too long. But Senate leaders have said they see no need to cancel the project.
See Secretary Tennyson's June 9, 2016 letter to the Senate Transportation Committee (PDF)