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NCDOT & Cintra Sign Agreement to Extend Financial Close to April

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Since June 26 of last year we’ve been counting down to today, because a lack of announcement yesterday means Cintra missed the deadline for financial close.

Missing this deadline means Cintra is supposed to forfeit a $15 million security deposit they made back when the contract was signed last June.

Supposed to.

The contract allows the deadline to be extended under two circumstances. The first is a “Relief Event.” There are about 20 of these defined in the contract, and they deal with things like the discovery of an endangered species or hazardous waste. None of the Relief Events have anything to do with financing. The second has to do with adverse changes to the financing terms. There have not been any, as far as we are aware.

In both of these cases, if either party (NCDOT or Cintra) wants to extend the deadline, they must notify the other in writing. And, that notification has to be within seven days of their becoming aware of those circumstances. To our knowledge, no one has provided written notification of anything.

So Cintra’s in default, right? A deadline is a deadline. A binding contract is a binding contract, right?

Wrong.

NCDOT and Cintra negotiated an amendment to extend the financing deadline to April.

(We’re trying to obtain a copy of the amendment.)

This after months of negotiations and millions of taxpayer dollars were spent on lawyers to craft a 900+ page agreement. This, when both parties found the contract acceptable and freely entered it. When both parties agreed seven months was an adequate time to obtain financing.

We now have a government agency that just left $15 million taxpayer dollars on the table and raised just as many questions.

What happens if Cintra misses in April? Another extension? How many more extensions? Will this go on indefinitely? What happens when they default on another part of the contract? Will they simply negotiate another side agreement?

What’s the point of a contract if the parties can change it at their convenience?

Who is looking out for the public?

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Short URL: https://pundithouse.com/?p=17404

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