The N.C. Department of Transportation is reassessing its contract with a company that is building controversial toll lanes on Interstate 77 after a subsidiary filed for bankruptcy in connection with a similar highway in Texas.
SH 130 Concession Co. filed its bankruptcy petition Wednesday in federal court in Austin, Texas, according to the Austin-American Statesman. The filing comes after less-than-expected traffic volume has led to lagging payments on the $1.7 billion debt owed on the project, including almost $1.3 billion in principal and more than $400 million in interest, expenses and fees, according to the newspaper.
Cintra, the company contracted to build toll lanes from Charlotte to Mooresville, owns 65 percent of SH 130 Concession Co. The I-77 project has faced opposition up and down the corridor.
Now, North Carolina is looking at its contract with Cintra, and N.C. Department of Transportation Secretary Nick Tennyson is going to Texas for more information.
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“Late today, we were notified of the bankruptcy filing in Texas,” Tennyson said in a statement on the N.C. DOT website. “The governor has directed us to immediately review every available option – both legal and financial – to reassess the I-77 Mobility Partner’s business model and current contract.”
Tennyson plans to meet with Texas DOT representatives. In the statement, he noted that the contract the state has with Cintra “protects taxpayers from financial losses.”
The Texas filing should have no effect on the 90-mile stretch of Texas 130, which runs between Austin and San Antonio. It’s the fastest highway in America, with speed limits of at least 80 mph in the tolled section.
But SH 130 Concession Co. had a deal with Texas that was similar to North Carolina’s, according to The Texas Tribune. The company would build and operate the toll road for 50 years in exchange for a portion of toll revenue.
The Indiana Toll Road, which Cintra bought in 2006, has also gone bankrupt.
In response to the bankruptcy filing, N.C. Rep. Charles Jeter, a Republican who represents Mecklenburg County, said: “I’m encouraged that the governor is telling DOT to revisit the issue in light of this new information.”
Mecklenburg Commissioner Jim Puckett said the filing shows why North Carolina should put a stop to the toll road project.
“This should come as no surprise as it is just the latest in a long line of failures for Cintra and its partners,” Puckett said in an e-mail to the Observer. “N.C. should jump at the chance to get out of what is guaranteed to be a failure here as well. The governor and the attorney general should act quickly to protect the pocketbooks of the citizens of N.C. and save the citizens of Mecklenburg and Iredell from the pending disaster on I-77.”