Cintra’s HOT Lanes a HOT Mess
As reported last week, the locally reviled HOT lane proposal on I-77 in North Mecklenburg and South Iredell is moving forward. The NCDOT announced that Cintra Infraestructures, S.A, a Spanish firm specializing in transportation infrastructure, was the apparent winning bidder for the project.
The press release for the NCDOT gave limited details, and to date no copy of the proposed contract is available to the public even though it is expected to be signed by June.
In an interview with the Lake Norman Citizen, DOT Administrator of Technical Services, Rodger Rochelle, said “It’s understandable that folks want all the details revealed, but right now we are in a position to where we don’t want to do anything to jeopardize this attractive proposal.”
Apparently sharing details with the public would “jeopardize” it. We can only speculate as to why. It must be bad. Very bad.
We already know that this “attractive proposal” involves giving away an existing taxpayer funded Interstate lane and providing $88 million in taxpayer money. We also know that the plan really doesn’t address congestion issues in any meaningful way. To the contrary, congestion is assured so as to maximize the return on investment for Cintra over the course of its likely lengthy (as high as 50 year) contract. The more congestion on the general purpose lanes, the higher the toll that can be charged.
Putting all this aside, some very basic Google searches put into question the viability of this company.
Last month, NWI.com reported the following:
“The Wall Street Journal is reporting the Indiana Toll Road is again facing pressure from bondholders, with its controlling partners facing a possible debt restructuring, perhaps in Chapter 11 bankruptcy.
The Journal in an article last week cited people familiar with the matter in reporting a European bank recently sold $500 million of Indiana Toll Road debt to outside investors for 60 cents on the dollar.
A Spanish firm, Cintra, and Macquarie Group paid the state of Indiana $3.8 billion in 2006 in exchange for the right to operate the 157-mile road and collect all tolls for 75 years. But traffic on the road has never lived up to expectations, taking a direct hit almost immediately from the recession that started at the end of 2007.”
Last year, similar problems arose with a Texas toll lane project that is majority owned by Cintra. According to Moody’s Investors Service:
“Moody’s Investors Service has downgraded the ratings of the SH 130 Concession Company, LLC (“the Project”) to Caa3 from B1, including the Senior Bank Facility with $686 million outstanding and the subordinate Transportation Infrastructure Finance and Innovation Act (TIFIA) loan with $493 million outstanding. The rating outlook is negative.
SH130 Concession Company LLC is a limited liability company owned by Cintra TX 56, LLC (65% ownership) and Zachry Toll Road 56, LP (35% ownership).”
Worse still, according to this article in the Examiner,
“Texas taxpayers have already subsidized the privately-operated tollway through advertising and buying down a one-year truck toll rate reduction announced at the beginning of the year. Texans have also paid for new signage along Interstate 410 and Interstate 10 to entice travelers to use the privately-run tollway.”
Around the country, HOT lanes and other toll projects are simply not living up to expectations. At least two of these failed projects are owned by the same company North Carolina is ready to partner with.
Will the contract NC signs be favorable to the taxpayers, or like Texas will it privatize the profits while subsidizing the risk…all for a project that doesn’t really improve commuting time for a vast majority of travelers?
We won’t know until we can see the contract.
In the meantime, what can be done?
Rodger Rochelle is also quoted as saying, “…at this time, they (Cintra) are the bidder we will award the contract to, but not until we go through the reporting process with the Joint Legislative Transportation Oversight Committee, and we are preparing that report now.”
It would seem that communication should be directed to the JLTOC. Let them know that significant public opposition continues to exist for this project and that as a matter of value for dollars spent, a general purpose lane option should be seriously vetted before any contracts are signed.
The following are the members and their email addresses.
|Sen. Kathy Harrington||Kathy.Harrington@ncleg.net|
|Rep. Frank Iler||Frank.Iler@ncleg.net|
|Rep. John A. Torbett||John.Torbett@ncleg.net|
|Rep. William Brawley||Bill.Brawley@ncleg.net|
|Rep. Rayne Brown||Rayne.Brown@ncleg.net|
|Rep. Becky Carney||Becky.Carney@ncleg.net|
|Rep. Nelson Dollar||Nelson.Dollar@ncleg.net|
|Rep. Charles Jeter||Charles.Jeter@ncleg.net|
|Rep. Chuck Mcgrady||Chuck.McGrady@ncleg.net|
|Rep. Rodney W. Moore||Rodney.Moore@ncleg.net|
|Rep. Phil Shepard||Phil.Shepard@ncleg.net|
|Rep. Paul Tine||Paul.Tine@ncleg.net|
|Sen. Warren Daniel||Warren.Daniel@ncleg.net|
|Sen. Joel D. M. Ford||Joel.Ford@ncleg.net|
|Sen. Malcom Graham||Malcom.Graham@ncleg.net|
|Sen. Rick Gunn||Rick.Gunn@ncleg.net|
|Sen. Ralph Hise||Ralph.Hise@ncleg.net|
|Sen. Neal Hunt||Neal.Hunt@ncleg.net|
|Sen. Wesley Meredith||Wesley.Meredith@ncleg.net|
|Sen. Bill Rabon||Bill.Rabon@ncleg.net|
|Sen. Dan Soucek||Dan.Soucek@ncleg.net|
|Sen. Michael P. Walters||Michael.Walters@ncleg.net|
|Rep. Dana Bumgardner||Dana.Bumgardner@ncleg.net|
|Sen. Brent Jackson||Brent.Jackson@ncleg.net|
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