The battle over toll lanes on I-77 north of Charlotte has taken another twist. State officials say they’ll re-assess the toll-lane plan for after a sister company of the NCDOT’s contractor filed bankruptcy in Texas.
NCDOT Secretary Nick Tennyson said last night he will go to Texas Monday to meet with transportation officials there to find out more about the bankruptcy. Gov. Pat McCrory's office announced the move in a statement Wednesday night, attributed to Tennyson:
“Late today, we were notified of the bankruptcy filing in Texas. 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. Therefore, I will be going to Austin on Monday to meet with Texas DOT representatives to assess the situation. It is important to note that the current contract protects taxpayers from financial losses.”
SH 130 Concession Co. filed for protection from its creditors under Chapter 11 of the federal bankruptcy law Wednesday, the company said in a press release. The company blamed lower than expected traffic and toll revenues on the 41-mile stretch of State Highway 130 it operates near Austin. The road opened in 2012.
SH 130 Concession Co. is a partnership that includes Spain-based Cintra. It signed a $1.3 billion, 50-year contract with the Texas Department of Transportation in 2006.
Cintra also is the parent of I-77 Mobility Partners, which has a 50-year, $650 million contract with NCDOT to add toll lanes to 26 miles of I-77 from the Brookshire Freeway to Mooresville. Unlike SH 130, which is a private toll road for its full length, the I-77 project would have both toll and conventional lanes.
Toll opponents have been fighting the NCDOT unsuccessfully for the past few years, demanding that state officials cancel the contract. They want the state to build conventional, non-toll lanes to widen the congested stretch of highway.
McCrory and Tennyson have defended the toll project and the contract with a private partner as the best way to widen I-77 sooner than if the state paid for it.
Anti-toll group Widen I-77 reacted to the news on its website Wednesday night, saying: ”We reiterate our request to Governor McCrory to cancel the contract before the taxpayer incurs greater risk for this expensive solution that solves nothing and guarantees 50 years of congestion.”
Opponents have pointed to bankruptcy of other toll projects as they’ve criticized the I-77 contract.
Both I-77 Mobility Partners and Cintra’s Texas unit issued statements Wednesday night saying the project wouldn’t affect the I-77 project, where construction already has begun.
From I-77 Mobility Partners:
Today’s filing by the SH 130 Concession Company has no financial impact on I-77 Mobility Partners LLC, or the construction and operation of the I-77 Express Lanes. While Cintra is an equity sponsor of both projects, each project maintains a separate financial structure. This matter has not impacted our construction schedule and we look forward to continuing our work here in North Carolina.
Cintra has its U.S. headquarters in Austin. In its own statement, the company said: ““Each of Cintra’s projects is wholly independent, with an isolated financial structure that ensures that the performance of one project never impacts the operations of another concession in which Cintra invests.”
According to SH 130's Chapter 11 filing, the company owes about $1.27 billion in debt, plus interest. Its shareholders have invested about $345 million so far.
RELATED LINKS
Cintra Statement - http://cintra.us/ourprojects/sh-130-segments-5-6/sh-130-concession-company-chapter-11-filing/
SH-130 Statement - http://www.mysh130.com/sh130filing/
March 2, 2016, Texas Tribune, “SH 130 Toll Road Operator Files for Bankruptcy”
March 2, 2016, Austin American-Statesman, "Owner of southern section of Texas 130 files for bankruptcy."
March 2, 2016, WidenI-77.org, “NCDOT Heading to TX to Investigate Latest Cintra Bankruptcy”
