The NC Department of Transportation said Thursday it has signed a preliminary contract with Spanish construction giant Cintra Infraestructures to widen 26 miles of I-77 north of Charlotte using high-occupancy toll lanes, or HOT lanes. North Carolina will contribute $88 million in public money to the $655 million project under the 50-year deal.
See the full announcement below.
The 1,700 page contract is the latest milestone in a project that still faces more hurdles. The NCDOT now will continue negotiations with Cintra in hopes of agreeing on a financial contract by year’s end. The deal calls for Cintra to finance the project itself, through the bond market, which it hopes to do in early 2015. If that happens, construction could begin in 2015 and be completed by 2018, the DOT said Thursday.
Under the contract, Cintra would design, build, operate and maintain the highway, paying off private investors through revenues from the toll lanes. The DOT says the public-private partnership would widen the highway within four years, instead of waiting for a widening project through traditional financing methods, which could take 20 years.
“This project provides an innovative and comprehensive solution to existing and future congestion in this corridor,” NCDOT Secretary Tony Tata said in a press release. “Utilizing the public-private partnership concept is allowing us to improve nearly 26 miles of I-77 in just a few years, not in decades. This expansion will provide an option for reliable travel time while addressing long-term mobility concerns.”
The signing came despite a recent revival of opposition to the project, over concerns about potentially high toll rates. On Thursday, opponent and Cornelius commissioner Dave Gilroy called the signing “one of the most profoundly disturbing events in the history of North Mecklenburg. A day we will all regret for decades.”
A 2012 study that became public in recent weeks suggests that maximum tolls on the highway, for the full distance from Mooresville to Charlotte, could reach $9 into Charlotte at AM rush hour and $11 back to Mooresville during the evening rush. Some public officials have said that sounds too high.
DOT officials have said those are old numbers and that toll rates won’t be that high. On Thursday, NCDOT officials said toll rates have not been set and there’s still plenty of work to do before a final agreement is ready.
“No toll rates have been set for the I-77 managed lanes. As required by contract, Cintra will conduct public hearings as part of developing toll rates that drivers can choose to pay to avoid congestion, and ultimately, the market will drive those rates,” Rodger Rochelle, the NCDOT’s Director of Technical Services, said in the press release.
The project would be one of the first public-private partnerships (P3) of its kind in North Carolina. State officials have said the tactic is the best choice for widening I-77 in the absence of public money.
The DOT’s press release Thursday tried to battle back against recent criticism, saying, “Over the past two years, NCDOT completed a transparent and thorough due diligence process to ensure the I-77 managed lanes project was the most efficient and effective way to address the corridor’s major congestion issues.”
Jennifer Thompson, an NCDOT spokeswoman in Charlotte, also noted that the tolls, which would be limited to one or two lanes, are not mandatory. “This is not something people have to do. It’s a choice, it’s an option,” she said.
In its release, the DOT put it this way: “Managed lanes give drivers a choice to pay a toll to enter and exit the lanes at various points to avoid congestion, or continue using general-purpose lanes for free. Managed lanes also help ease congestion on the free, general-purpose lanes for other drivers.”
Thompson said the contract signing is not the end of the process.
“This is just one step,” she said. We still have to do the financial close by the end of the year. That would hopefully get done by December.”
“There’s still a lot of process and a lot of opportunity for input,” she added.
MORE ABOUT THE PROJECT
The I-77 contract includes a package of projects including the road widening, toll lanes and new highway bridges from north Charlotte to Exit 36 in Mooresville. A new “flyover bridge” at I-277 will send commuters from I-277 onto the I-77 toll lanes.
The southern 17 miles or so will have two HOT lanes in both directions. The northernmost 8.8 miles will have a single HOT lane, in part because there’s no room to widen the highway across the Lake Norman causeways in Cornelius and Davidson.
Tolls would be charged using electronic radio transmitters in commuters’ cars. The tolls would not be mandatory – drivers could opt to stay in general purpose lanes and continue to ride for free. And toll lanes would be free for buses, motorcycles and cars with at least three occupants. The latter is designed to encourage carpooling, which the DOT says also will help reduce congestion.
RELATED LINKS
NCDOT project page for the I-77 HOT lanes project
Related documents on the NCDOT.gov website. The DOT said the 1,700 preliminary contract would be posted to this page. It was not available Thursday afternoon.
June 24, 2014, CorneliusNews.net, “In letter, commissioners ask Gov. McCrory to delay I-77 contract signing”
June 17, 2014, CorneliusNews.net, “New information rekindles debate over I-77 toll lanes.”
See past coverage of the I-77 widening project and other NCDOT news under the “HOT lanes” tag on CorneliusNews.net.
NCDOT ANNOUNCEMENT
Here’s the announcement Thursday, June 26, 2014, from NCDOT
NCDOT Signs Contract to Provide Reliable Travel Time Along Heavily Congested I-77
CHARLOTTE- The N.C. Department of Transportation today signed an agreement with Cintra for a public-private-partnership (P3) contract to improve the traffic flow along 26 miles of I-77 in the Charlotte area, one of the most congested roadways in the state. The P3 enables NCDOT to address a critical need and provide immediate travel time reliability along I-77 from Uptown Charlotte to the Lake Norman area that could otherwise not be completed with limited funds.
The state will invest about $88 million dollars and Cintra will secure the remainder of the $655 million to design, build, operate and maintain the managed lanes project in exchange for toll revenue generated from the lanes. This public-private partnership will complete the project within four years instead of the estimated 20 years it would take to secure enough state funding to move forward.
“This project provides an innovative and comprehensive solution to existing and future congestion in this corridor,” said NCDOT Secretary Tony Tata. “Utilizing the public-private partnership concept is allowing us to improve nearly 26 miles of I-77 in just a few years, not in decades. This expansion will provide an option for reliable travel time while addressing long-term mobility concerns.”
Managed Lanes
Managed lanes give drivers a choice to pay a toll to enter and exit the lanes at various points to avoid congestion, or continue using general-purpose lanes for free. Managed lanes also help ease congestion on the free, general-purpose lanes for other drivers.
The I-77 project includes converting the current High Occupancy Vehicle (HOV) lanes, which already exist along I-77, and adding capacity to the roadway. The existing HOV lanes and new lanes will be High Occupancy managed lanes that allow free use for eligible carpoolers (three passengers or greater), buses and motorcyclists, while allowing other drivers to pay a toll to use those lanes.
Tolls will vary during the day and night to manage the number of vehicles in the lanes and help ensure free-flowing traffic even during morning and evening rush hours.
“No toll rates have been set for the I-77 managed lanes. As required by contract, Cintra will conduct public hearings as part of developing toll rates that drivers can choose to pay to avoid congestion, and ultimately, the market will drive those rates,” said NCDOT Director of Technical Services Rodger Rochelle.
Transparent and Thorough Review
Over the past two years, NCDOT completed a transparent and thorough due diligence process to ensure the I-77 managed lanes project was the most efficient and effective way to address the corridor’s major congestion issues. That process included more than a dozen public hearings, neighborhood meetings and workshops; as well as more than 40 meetings with mayors, town and city leaders, officials and staff from the Metropolitan Planning Organization (MPO), local legislators, business forums and the Lake Norman Transportation Commission. NCDOT posted the detailed documents related to the bidding process online beginning in March of 2013, including each updated draft of the proposed contract for public review. The State Treasurer’s Office reviewed the agreement and the Local Government Commission (that includes the State Treasurer, State Auditor, Secretary of State and Secretary of Revenue) approved a resolution to allow the project to move forward.
In accordance with state law, NCDOT submitted reports to the Joint Legislative Transportation Oversight Committee, Joint Legislative Commission on Governmental Operations and the Chairs of the Transportation Appropriation Committees, beginning in April 2014. Numerous lenders, USDOT TIFIA office and other stakeholders have reviewed and approved the contract and will continue to review documents until financial close. A number of attorneys, including the NC Attorney General’s Office, have also reviewed the documents and all issued favorable legal opinions for the I-77 project as part of the due diligence process.
Next Steps
Moving forward, design, permitting and other preconstruction activities will begin, and additional public meetings will be scheduled to discuss the project’s toll rates and methodology. NCDOT expects Cintra to secure the funding by the end of this year. Design and construction are anticipated to take 3.5 years, with completion scheduled for 2018.
Project Details
The project will add capacity to I-77 between Brookshire Freeway (Exit 11) in Charlotte and N.C. 150 (Exit 36) in Iredell County. This portion of the I-77 corridor already experiences significant congestion, and projections show a 2-to-3 percent increase in traffic volume is expected every year through 2030.
Improvements will also include a flyover bridge to provide the managed lanes direct access from I-77 to I-277, and the widening of southbound I-77 lanes and shoulders in some areas. The added lanes will increase capacity through the corridor, improve travel time reliability, and better manage traffic flow along I-77.
Cintra has more than four decades of experience as a private developer of transportation projects around the world. Its current projects include locations in Texas, Indiana and Illinois, as well as in Canada, Spain, the United Kingdom, Portugal, Ireland and Australia.
CINTRA PRESS RELEASE
Here’s the press release issued Thursday afternoon by Cintra.
Cintra-Led I-77 HOT Lanes Project Achieves Commercial Close
Project enhances traffic connectivity between outlying residential areas and downtown Charlotte.
Austin, TX – June 26, 2014 – Today, Cintra, a subsidiary of Ferrovial, has achieved commercial close on the I-77 HOT Lanes Project led by the North Carolina Department of Transportation (NCDOT).
The $655 million project, extending 26 miles from the I-77 connection with I-277 in Charlotte to the intersection with NC 150 in Iredell County, will enhance traffic connectivity between residential areas along the corridor and downtown Charlotte. The project includes the development of High Occupancy Toll (HOT) lanes in both directions, which will provide traffic congestion relief to rapidly growing communities in the area.
Cintra will be responsible for the development of the project and construction will be led by a joint venture between Ferrovial Agroman and W.C. English. The project is being developed as a public-private partnership with the private sector assuming traffic performance risk traditionally taken by the state.
“Cintra is pleased to be a provider of effective, efficient and much-needed transportation solutions and economic development in the greater Charlotte region and will continue to work with state and local leaders to deliver traffic congestion relief to regional motorists,” said Nicolas Rubio, United States president of Cintra.
The project is divided into three sections. The project’s 2.2-mile southern section and the
14.9-mile central section will have an ultimate configuration of two HOT lanes in each direction. The north section of the project includes 8.8 miles of new construction of one HOT lane in each direction.
“This project will not only provide needed traffic congestion relief to one of North Carolina’s fastest growing and most dynamic regions, but it will foster additional economic development opportunities and will create local jobs,” added Patrick Rhode, United States Vice President for Corporate Affairs at Cintra US.
Construction is expected to begin by early 2015 and be completed in mid-2018. The term of the concession will be 50 years after the project opens to traffic.
About Cintra US
With US headquarters in Austin, Texas, Cintra is a subsidiary of Madrid-based Ferrovial. Cintra is the leading private-sector transportation infrastructure company in the world with experience spanning more than 45 years of innovative highway development on three continents. Today its portfolio includes more than 1,300 miles of managed highways worldwide, representing a total global investment in roadway improvements of approximately $30 billion. Cintra manages more than $14 billion in infrastructure projects in the United States.
About Ferrovial
Recognized as an international powerhouse, Ferrovial, through its four business lines – Services, Highways, Construction and Airports – owns, operates and manages major infrastructure assets, including London’s Heathrow Airport and several other major airports in the United Kingdom. Ferrovial is the world’s leading private investor in transportation infrastructures, with a workforce of approximately 65,000 employees and operations in more than 25 countries. Ferrovial manages key assets such as Canada’s 407 ETR highway and also provides municipal services to more than 800 cities and towns in Spain, Portugal and United Kingdom. The Company is listed in the Madrid Stock Exchange and is included in the prestigious Dow Jones Sustainability, FTSE4Good and Ethibel indices. Public Works Financing has named Ferrovial the world’s leading investor in transportation infrastructure.