RALEIGH, NC (WBTV) - The North Carolina Department of Transportation said it is reassessing its contract with the company contracted to build toll lanes along I-77 after another road the company operates declared bankruptcy.
A subsidiary of Cintra, the Spanish-owned company that holds the I-77 contract, declared bankruptcy today on a road it operates in Texas. SH 130, which runs between Austin and San Antonio, was the subject of an On Your Side Investigation in February highlighting Cintra's questionable business model.
This is the second road operated by a Cintra subsidiary to declare bankruptcy in the past 18 months. In a short press release announcing McCrory's decision, NCDOT underscored Cintra's business model, which lawmakers in other states have warned against.
"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," the statement read.
NCDOT officials reiterated Wednesday night that North Carolina taxpayers are protected from financial liability in the I-77 project but the contract between Cintra and NCDOT calls for taxpayers to assume a portion of the company's debt in the event the road did not generate projected revenues.
Mecklenburg County Commissioner Jim Puckett, a long-time opponent of the toll lanes, said tonight's announcement from NCDOT was welcomed news.
"I'm glad to hear that both (Governor McCrory) and, I hope, the Attorney General, are taking a look at this and that he will find a reason to cancel, for cause, and get out of this disastrous plan," Puckett said.
Puckett added that Wednesday's bankruptcy in Texas put NCDOT and proponents of the I-77 toll lanes in a tight spot going forward.
"At the end of the day, I think what you have is this is an embarrassment. we've had local people go to Texas to come back and say this works," Puckett said. "NCDOT has used Texas as the poster child as why this is great financially and from a program perspective and so now it really blows up in their face and they are faced with 'I told you so' if they don't get out and this happens to us."
In a statement issued late Wednesday night in response to NCDOT's announcement, a Cintra spokeswoman said the Texas subsidiary's bankruptcy will have no impact on the I-77 toll lanes project, operated by a separate subsidiary.
"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," spokeswoman Jean Leier said. "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."
In a separate release sent by the Cintra subsidiary that operated SH 130 in Texas, the company pointed out that no taxpayer money was used to build that road and taxpayers bear no financial responsibility as a result of the bankruptcy.
"The filing will have no financial impact on the state of Texas," said Alfonso Orol, CEO of SH 130 Concession Co., Cintra's subsidiary. "It's business as usual for our customers, employees, vendors, and surrounding communities during these proceedings."