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Politics

Rep. Jeter Wants To Force NCDOT To Cancel I-77 Tolls; Senate Leader Disagrees

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Updated 5:35 p.m.
State Rep. Charles Jeter of Huntersville says he’ll file a bill when the legislature’s short session opens Monday to cancel the NCDOT’s contract to add toll lanes to I-77. But Senate Leader Phil Berger said later he doesn't see any need to do that. 

Jeter says he promised to file the bill back in January when he urged Charlotte City Council to oppose the contact with Spain-based Cintra. The council reaffirmed its support, despite an outcry against tolls from the Lake Norman area north of Charlotte.

The DOT signed the 50-year, $655 million contract with Cintra subsidiary I-77 Mobility Partners in 2014, and work is already underway.  The company is widening the congested highway with two toll lanes from  I-277 to Exit 28 in Cornelius, and one lane from there to Exit 36 in Mooresville.

Jeter says the bill comes with a risk: He expects some legislators to try and force Charlotte and other local governments in the Charlotte area to bear the costs of a contract cancellation fee. The DOT says that penalty could range from between $80 million and $300 million. Some legislators last year also suggested pinning the fee on the Charlotte area.  

But Jeter says Cintra’s recent sale of about 40 percent of the project to British investors suggests it could be much lower.  [British infrastructure investment firm John Laing bought part of Cintra’s stake in December.] 

“They sold 40 percent for $25 million, which means the total cancellation cost of this contract at the highest level, the most it could be, is $62.5 million,” Jeter said Wednesday. “Why is that number significant? Because it’s less than the money the state has guaranteed in revenue for the first five years.”

The contract calls for NCDOT to pay I-77 Mobility Partners up to $75 million in the contract’s early years if toll revenues fall short of projections.  

Jeter's bill appropriates $25,000 from the state Highway Fund for legal fees to help calculate penalties.

With the session beginning Monday, it’s not clear yet what legislation the General Assembly might decide to tackle.  Jeter says he’s optimistic the bill will pass the House.

Senate Leader Berger said he hadn't seen Jeter's proposal, but doesn't support the idea. "The I-77 toll lanes issue has been around for a while. I think we've gone pretty far down the road on that and I don't see any need for any significant changes," Berger said. 

DOT officials declined to comment on Jeter’s plans.

Meanwhile, DOT Secretary Nick Tennyson said in February he’s willing to consider revising the the contract. He asked cities and towns that belong to the Charlotte Regional Transportation Planning Organization to offer feedback.

A DOT spokeswoman said Wednesday: “The responses from the towns and cities in the area are being analyzed to determine which can be included as possible changes to the contract and what specific steps would accomplish the best outcome to deliver the mobility solution identified under the locally adopted strategy of optional toll lanes. This is a time consuming process through which we are working as rapidly as possible.”

RELATED LINKS

Dec. 10, 2015, Laing.com, “John Laing acquires US$25 million interest in I-77 Managed Lanes PPP project in North Carolina”

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