NC DOT: ‘No foundation’ for I-77 toll lane delay
06/24/2014 1:33 PM
06/25/2014 8:37 AM
A North Carolina senator said Tuesday that a legislative review of a final contract to build toll lanes on Interstate 77 would not delay the project, despite concerns by the state transportation secretary.
With the support of legislative leaders, state Sen. Jeff Tarte, a Cornelius Republican, said he asked Transportation Secretary Tony Tata to allow lawmakers and the state auditor to review the final toll lane contract.
The state plans to sign a preliminary contract with the Spanish firm Cintra Infraestructuras S.A. by the end of the month and a final contract in December.
“I want that independent verification, and I want it done transparently and publicly,” Tarte said.
Tata, meanwhile, told Tarte in an email that he sees “no foundation” for delaying a contract to build toll lanes.
The emails came after news reports said a round-trip ride between Charlotte and Mooresville could reach $20, according to N.C. Department of Transportation projections, and could jump to at least $20 one-way by 2035.
Tata said the Department of Transportation can brief legislators, but he objects to any delay in signing the contract. Tata added in his email that Tarte had recently told him that he thought the I-77 project was a “good deal for the state.”
Cintra could start work by December. When finished, the $655 million project would convert the existing carpool lanes on I-77 into toll lanes, as well as add another toll lane for much of that stretch of highway. The state would contribute $88 million toward the project. Cintra would get the toll money.
The state has said the public-private partnership will bring much-needed money to improve I-77, and will give motorists flexibility on their Charlotte commutes.
Tarte said the legislative contract review could start in August or September, and finish by the expected contract signing in December. A short delay is possible, he said.
“Worst case is it delays it a little,” he said. “We don’t close in January, it’s not the end of the world.”
The project – which would be the state’s first privately owned toll lanes – has been controversial.
The citizen group Widen I-77 wants the state to add general-purpose lanes to the highway instead of building the toll lanes.
There doesn’t appear to be any serious effort to stop or slow down the project.
GOP Rep. Robert Brawley, a toll critic from Mooresville, said although he’d like to stop it, he’s unaware of any legislative effort to halt the contract signing.
A consultant’s report for the DOT in September 2012 projected the cost of using the toll lanes, using figures that don’t account for inflation.
For the present day, the consultant projected the entire 26-mile trip from Charlotte to Mooresville would cost $11.75 for afternoon rush hours. The same trip in the middle of the day would cost $5.46.
By 2035, that trip would cost $21.63 at rush hour and $10.36 at mid-day.
The idea behind HOT lanes is to set aside part of the interstate for what could be called “first-class travel.” In exchange for paying a toll, a driver is guaranteed a certain speed. In the 1-77 study, that speed is estimated to be at least 45 mph.
If more people want to use the toll lanes, the price would increase. In theory that would discourage people from using the toll lanes, allowing the average speed to remain at 45 mph or above.
Drivers with three or more people, as well as buses, will be able to use the lanes for free.
But the state’s study suggests that Cintra, if awarded the contract, won’t be bound by any government-imposed limits on how much it can charge.
“We have applied the concept of optimal tolling to the I-77 HOT lane project to create a revenue maximization toll policy,” the report said.
The report added: “To maximize revenue, it is necessary to increase tolls to levels that are several times higher than those assumed for throughput focused pricing policies.”
The consultant’s study has several charts that show the relationship between revenue, the amount of the toll and the number of people who would choose to pay the toll.
In general, as the toll increases, the amount of people to pay the toll decreases.
“It’s a supply and demand issue,” said Rodger Rochelle of the state DOT. “The toll will be set by the decision that users make. There has been talk of a $21 toll at peak times. If (drivers choose not to pay) then (the contractor) will have to drive down that price to get that revenue.”
House Transportation Committee Co-Chairman Bill Brawley, a Matthews Republican, said lawmakers want to make the I-77 project a model for public-private partnerships.
“What I’m hearing is we’ve actually set a very high bar for contracting (public-private partnerships.)”
As for the projected tolls, he said the cost would be market-driven.
“If you don’t want to drive on the tollway, don’t,” he said. “There will still be free lanes next to it.”
Rochelle said the contractor would be responsible for paying off the debt from the construction from its toll revenues.
However, the proposed contract with the state does have the DOT acting as a partial backstop in case of problems with the project. The DOT could pay up to $75 million over the life of the contract if revenue projections were dramatically lower.
“It’s a pretty extreme situation,” Rochelle said.
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