Financial Close for I-77 highway pushed back to end of May
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North Carolina Department of Transportation (NCDOT) and I-77 Mobility Partners have pushed back yet again the projected final financial closing date for the I-77 highway PPP project in North Carolina. The DOT said in a press release Monday the two sides have agreed the closing will be Wednesday, May 27.
"NCDOT and I-77 Mobility Partners continue to work closely with all parties involved in the financial close process for the project. The financial close deadline in the Concession Agreement has now been set for May 27th under a joint agreement as final details are completed," NCDOT said.
A $100 million package of private activity bonds for the I-77 Express Lanes project were signed on April 28. A private activity bond is one issued by a local or state government to a private entity. The $100 million in private activity bonds will be marketed to the I-77 Mobility Partners and the private entities making up those partners must pay them back.
The total project investment is estimated at US$655 million. North Carolina Department of Transportation (NCDOT) will provide an up-front subsidy of US$91.4 million to help fund construction works and the project will also benefit from US$249.8 million in equity commitments from the project's ultimate sponsors, Cintra Infraestructuras, S.A. and Aberdeen Global Infrastructure II LLP.
Fitch Ratings has assigned 'BBB-(EXP)' rating to the PABs and a US$189 million subordinated loan granted under the Transportation Infrastructure Finance and Innovation Act (TIFIA). The Rating Outlook for both the PABs and TIFIA loan is stable, according to Fitch.
The design includes road widening, in both directions, along 26 miles (41.8 kilometres) of the I-77 in the metropolitan area north of Charlotte, between the junctions with the I-277 in Charlotte and the NC-150 in Iredell County. To improve traffic in one of the fastest-growing areas of the state, the existing highway will be rebuilt and capacity will be increased by creating managed lanes, subject to variable electronic tolls, which will help reduce congestion and improve traffic flow in the corridor.
The project is divided into three segments:
- on the southern segment (2.2 mi, 3.5 km), the existing section will be upgraded and two managed lanes will be built in each direction;
- on the central segment (14.9 mi, 23.8 km), the existing lanes will be upgraded and two managed lanes will be built in each direction;
- on the northern segment (8.8 mi, 14.2 km), the consortium will build one new managed lane in each direction.
The project will be developed on a design, build, finance, operate and maintain (DBFOM) basis. The 50-year concession starts from the date the infrastructure opens to traffic.
Ferrovial, through a consortium led by its subsidiary Cintra Infraestructuras, was awarded the PPP project in April 2014. Commercial closure was achieved last summer.
In November 2014 a local group of citizens pressed to halt the development of the project. The group was against tolling the highway and was requesting government officials to take another look at widening the highway using conventional lanes, not high occupancy tolled lanes (HOT). Finally in early March this year we reported that the request was denied.
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