North Carolina Turnpike setback - legislature won't provide $52m/yr "gap" finance for TRs

The North Carolina Turnpike Authority's (NCTA) big plans for toll projects are stalled by the failure of the lower house to provide revenue to cover what the Turnpike calls "gap financing" - the difference between the estimated cost and the bonds the Turnpike estimates it can float. The state Senate passed a bill (SB1352) providing for $52m/year in full year funding based on an $8 increase in vehicle registration fees.

The state house passed a different bill providing for $20m/year to the Turnpike, but too late in the session for a compromise to be worked out. The legislature broke up for a long recess without giving the Turnpike a cent for its "gap." It doesn't reconvene until May 13 2008.

The Turnpike which has so far been reluctant to seek out investor equity in the state's toll projects may now look at concessions. It has that power.

Blocked from proceeding with conventional public authority debt is the Triangle Expressway project that is otherwise ready to roll. The Triangle Expressway sometimes known as the Research Triangle Expressway is an approximate $850m project 26km (16 miles) long in the western part of the Raleigh-Durham-Research Triangle area. It consists of two connected roads:
- the Triangle Parkway a short 5km (3.4 mile) connector road costing perhaps $150m
- the West Wake Parkway a 20km (12.6 mile) beltway section extending the free I-540 south from I-40 and costing about $700m

The project has environmental clearance and was due to go to financial close with the support of state gap finance this fall for construction beginning early next year and opening in 2010-2011.

Turnpike CEO David Joiner says the project can't proceed as planned.

Other toll projects in the pipeline are also blocked. They include

- the Monroe Connector on the east side of the Charlotte area $550m
- Gaston Parkway in the western part of the Charlotte area first stage $410m
- Mid Currituck Bridge in the Outer Banks resort area

In the absence of legislative support to close the funding gaps left by public financing, the Authority may look to the private sector. Operating on a global basis it can often mobilize more capital for toll projects, especially in areas of strong economic and population growth.

Strong population growth

North Carolina recently passed New Jersey in population and has a business friendly environment with rapid job creation. 1990 to 2000 NC grew from 6.32m to 8.05m people.

By 2010 the state population is expected to be 9.35m, 10.71m in 2020 and 12.23m in 2030.

Incomes and traffic are also rising strongly.

TOLLROADSnews 2007-08-03