North Carolina’s $3.7 billion toll lanes project advances as a P3
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North Carolina’s largest transportation project to date may be structured as a public-private partnership after the controversial toll lanes proposal won a pair of key votes last week.
The Charlotte City Council and transportation planning group Charlotte Regional Transportation Planning Organization gave the green light to the North Carolina Department of Transportation to pursue a 50-year concession to add 11 miles to the congested Interstate 77 corridor in Charlotte, widening it to 10 lanes by adding two express lanes in each direction.
With a $3.7 billion price tag, it would mark the state’s most expensive transportation project to date. Every year of delay would cost another $100 million, and the state lacks the funds to complete the project on its own, NCDOT officials told the CRTPO at an Oct. 16 board meeting.
The preliminary timeline calls for NCDOT to release a Request for Qualifications by next August. The state expects strong interest and has already been fielding interest from firms “around the world,” NCDOT official Brett Canipe told the board. The Charlotte City Council unanimously approved the project on Oct. 14.
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The I-77 South project would mark the state’s second P3. Its first is 26 miles of express toll lanes along I-77 North, operated by Spanish firm Cintra. The unpopularity of those tolls and the contract with Cintra raised concerns for some CRTPO board members, and NCDOT officials pledged to craft a better deal this time around.
“The big concern we keep hearing” is comparison to the I-77 North project, Canipe said. The state is going “to do it right this time” with better terms, he said.
In August, NCDOT released results of a study that found using a P3 delivery would cost around $3.2 billion, or $500 million less than a traditional delivery. The state has $600 million to commit to the project with another $100 million likely, Canipe said.
Without a P3, the state would be forced to abandon the project, which has been in discussions for years as congestion has worsened amid the region’s growth, he told board members.
The transportation needs and project costs in the state’s growing urban areas is significant, Canipe said. “The scope, scale and costs of the projects in our urban areas have really taken me by surprise,” he said. “I’ve been in this business for well over 20 years and I still get taken aback by the cost estimates I see coming in.”
The board, which oversees state and federal transportation projects in the region, split the vote. Charlotte, which accounts for 31 of the 68 votes because of a weighted system, voted to advance the P3 in order to keep the project alive until more questions are answered, City Council member Ed Driggs told the board before the vote.
“We understand managed lanes are not popular, and the I-77 North experience was bad,” Driggs told the board before the vote. “We stuck our necks out,” he said. “We decided unanimously that in these circumstances the best course is to move to the next step, otherwise we have no plan and the costs keep going up.”
With the P3 approval in hand, NCDOT will next create a working group with the CRTPO that will craft key terms for the concession. The board has the power to rescind its support any time until NCDOT posts the public advertisement.
The state is also planning to use a P3 delivery for the Mid-Currituck bridge, a long-planned project to upgrade the only highway crossing of the Currituck Sound along the North Carolina coast. The $1 billion project, which has been in the works since before 2010, would build a seven-mile tolled span to alleviate congestion and speed up evacuation times.
