Goliath slaps back at David in I-77 toll fracas

That noisy bunch of grassroots folks in Widen I-77 have been creating quite a fuss in recent months.  They are mostly residents of northern Mecklenburg County who really don’t want to have to pay tolls to travel on a major thoroughfare that runs through their neck of the woods. (Can’t say we blame them.  You would have thought the road improvements would have already been paid for in those outrageous gas taxes we pay.)  

A Spanish contractor has partnered with the State of North Carolina to construct and manage the I-77 widening. Both sides in this dispute have lawyered up and traded public accusations.  Well, the CEO of the Spanish-led contractor overseeing the toll project has fired off a letter highly critical of the group protesting the tolls on I-77.  Here are some of the highlights:

[…] It has come to our attention that you are the author of a document titled “I-77 Managed Lanes Project: North Carolina Liability & Developer Profit” which has been made available to the public on the websites www.i77businessplan.com and www.wideni77.org.

Such document contains a wide variety of false allegations and factual misrepresentations that require proper response in order to further avoid misleading the public and creating confusion in respect of the benefits to the public of the 1-77 HOT Lanes Project (the “Project”).

Background

The Project is expected to greatly decrease congestion in the Lake Norman region by adding express lanes to an approximately 26-mile stretch of 1-77. In addition, among other benefits and as has been noted by NCDOT, the Project is essential for the economic development of such region. The Project is already under contract and well into its pre-construction phase.[…]

This video would indicate that there isn’t exactly a groundswell of public demand for introducing tolls into the area. (*I guess these “simple” outside-the-beltline folks just don’t know what’s good for them.*)

There have also been countless votes by local governmental entities expressing disapproval of the project or a desire to delay it. 

As you might expect, the folks at Widen I-77 had a response.  :

We are in receipt of your August 11, 2015 letter. You have demanded we publish a retraction of our original whitepaper within ten days.

Our whitepaper relied on public information contained in the credit ratings agency reports, the Comprehensive Agreement and your public statements. If there are false or misleading statements it is in these documents themselves and your own aspersions.

Throughout this process, recognizing we have no credibility except our continued accuracy, Widen I-77 has rigorously analyzed and documented our sources. In keeping with this policy, if the above information changes, we will update our position.

Further, it has come to our attention that you have widely disseminated your letter to elected officials and NCDOT personnel. With equal dissemination, we are therefore compelled to point out the numerous contradictions and incorrect statements in your response.[…] 

Sounds like we have a fight on our hands here.

Widen I-77 turns the tables on the contractor by pointing out “false and deceptive claims” they have allegedly made in promoting the I-77 toll project:

[…] Additionally, you have recently undertaken an extensive marketing campaign, including radio and newspaper ads and mass mailings extolling the virtues of the managed lane project.

In your mass-mailing advertisement on or about June, 2015, you make several false, deceptive or unsubstantiated claims. Some of these are reiterated on your website and even in your August 11 letter. Specifically:

1. False Claim: “Reduced Traffic Congestion for ALL Commuters…”

Both the 2011 Stantec study and a 2012 analysis by Atkins show your project decreases average travel speed in the general purpose lanes. This is consistent with the nature of congestion-based pricing, and is supported by the International Bridge Tunnel and Toll Association which has stated that private toll lanes require the “operational failure of the general purpose lanes” in order to be financially successful.

Page 10 of the DBRS credit agency report states “capture rate assumptions for the HOT lanes assume that 4% to 6% of daily traffic will use the [original] lanes, rising to 10% by 2035 as a result of the increased congestion.”

1. Unsubstantiated Claim: “Enhance our local economy”

No economic impact study has been performed to substantiate this claim. To the contrary, over 350 local businesses have signed a petition objecting to the managed lanes, and the Lake Norman Chamber of Commerce has taken a position against this project based on their views that it will be detrimental to the local economy and their members.

2. Deceptive Claim: “High Occupancy Vehicles Travel Free.” The word free is defined as “given or provided without charge or costs.”

Exhibit 4 of the CA, page 4, Section III, Toll Operations paragraph A reads: “…Developer may charge a toll at the applicable rate…for an HOV if the vehicle is not equipped with a Transponder, regardless of occupancy…” In addition to paying a toll, Cintra or the NCDOT will charge the user for a transponder. Users without a transponder will be tolled regardless of how many people occupy the vehicle.

Further, the credit agency report states, “eligible HOV users must have a transponder and self-declare their exempt status by way of a Smartphone application.

Requiring a Smartphone to qualify for the high occupancy vehicle toll exemption presents a further financial hurdle to the HOV user traveling “free.”

3. Deceptive Claim: “Creation of 8000+ Total Jobs…during construction.”

The $648 Million estimated project costs include $440 million of construction costs. Construction costs consist of material and labor. For discussion, only labor will be considered.

$440 Million construction costs over 43 months of the construction period yields $10,232,558 per month. Divide this by 8000 jobs yields a yearly wage of $15,348 or $8.43 per hour based on Full Time Equivalent (FTE) hours per week as defined by NC General Statute—less than a living wage. This hourly wage is lower than any hourly wage rate data as listed in the CA.

Therefore, your claim can only be valid if it relies on the assumption of a significant portion of indirect job creation, or that many of the jobs being created will be temporary positions that will only exist for small portions of the construction process, yet you fail to mention this.

4. Unsubstantiated Claim: “Attractive for new Job Creation…”

We are unaware of any impact study or analyses that has been performed to substantiate this claim. If one exists, please bring it to our attention.

5. False Claim: “I-77 Mobility Partners…a subsidiary of Texas-based Cintra”

Per the I-77 Hot Lane Project, Executive Summary, Page 3, Section 1. Management Team and Organization, paragraph 2, Cintra Infraestructuras, S.A. (Cintra) is the proposer and the sole equity partner in I-77 Mobility Partners.

Cintra has registered offices at Madrid, Plaza Manuel Gomez Moreno, 2. Edificio Alfredo Mahou, Madrid, and tax ID no. A-85716215. It is registered at the Madrid Mercantile Register, Volume 26797, Folio 8, Section 8^a, page M-482817.

Therefore Cintra is based in Spain, not Texas.

6. False Claim: “Construction is set to begin this summer, with the express lanes opening by the end of 2018”

As of this writing there is no visible evidence of construction, equipment necessary to start construction or materials on site, and there are 38 days left in the summer.

Per Mr. Louis Mitchell, NC DOT District 10 engineer, Albemarle, NC as quoted at a recent Davidson, NC Town Board of Commissioners, construction would not begin until Spring 2016. This start date was confirmed by then- NCDOT Deputy Secretary Nick Tennyson.

It is our understanding the design was not yet finalized while these statement were made public, and the ingress/egress points are not finalized as of the date of this memo. […]