I-77 Toll Roads: A Policy Memo

Memorandum

To: Governor Pat McCrory

From: Leah Hubert. Political Science Major at Davidson College

Subject: Management of I-77 Toll Lanes from an Environmental Perspective

Date: March 21, 2016

Need For Environmental Consideration in Management of Toll Road I-77

North Carolina has paired with the private corporation Cintra to add Toll Lanes to highway I-77 as part of the NCDOT 10-year plan to expand and update North Carolina roads. Cintra as a corporation has seen the failure of the toll roads in Indiana and most recently declared bankruptcy in Texas. By pairing with Cintra and giving them control of management of the Toll lanes NCDOT is risking environmental degradation and no obvious traffic management. The necessity of these lanes is inherent if you take a drive down I-77 at almost anytime of day. The huge amount of traffic congestion leads to not only longer commutes, but also to huge greenhouse gas contributions due to the extra fuel being burnt from inefficient transportation. However, depending on how they are managed it can have different effects on the environment which must be thoughtfully considered. Properly implemented, toll roads can actually have a positive role on the environment. The decrease of traffic block-ups lowers the emissions of cars from sitting in traffic, built through smart pathways it avoids habitat hotspots, and tolls encourage carpooling. The failure of toll lanes leads to high tolls, low usage of toll lanes, and no decrease in the congestion of other routes. The environment suffers because the positive effects aren’t seen. People avoid the toll lanes and drive farther through back roads, no real decrease in traffic occurs, and the toll roads interrupted habitats just to sit unused. I am proposing that NCDOT needs to limit the involvement of private corporations in the creation of toll lanes and consider environmental effects in managing the toll road plan for I-77.

Three Possible Alternative for I-77 Toll Lane Management:

• Limit Cintra’s Involvement– Through legal litigation, NCDOT gives Cintra less control over setting the toll prices and taking more responsibility for road upkeep. This limits the risks the state faces for failure of the toll roads, but makes them more responsible financially. This plan gives the state the say to make sure the toll roads succeed in being environmentally friendly and making positive strides in lessening the waste from traffic congestion.
• Cut Out Cintra and Build State Controlled Toll Lanes– This plan would require a reassessment of contracts and finding an out. Estimates say it could cost 100 million to cancel the contract, but a state buy-out plan could save the state from the embarrassment of following the failed Indiana & Texas toll roads. Then the state could repropose their toll plans and structure their toll lane plans around more successful toll lane implementation, like the ICC construction in the DMV area. This plan allows the state to make a larger impact environmentally by controlling the toll fees and having direct control over the management of the roads.
• Change nothing– This plan would keep the deal the same, ignoring the risks and flags seen from Texas and Indiana. This could result in the failure of the toll roads and lead to the countless negative environmental impacts seen from failed toll implementation.

Effectiveness

The science of traffic management is extremely imperfect. However, seeing the many failures of Cintra, it is obvious they are not the best option. Taking insight from other toll lanes that have been attempted is a necessary step. The government has the best resources to deal with these issues in light of the many varied aspects of issues the toll lanes intersect. The environmental aspect is extremely important and when looking at the resources of the government, they care more and are more efficient at handling them then a private company would be. However, if it cost the government 100 million dollars to cut Cintra, it may not be cost effective for the government to completely cut out Cintra and a solution would have to be reached between the company and the government to deal with environmental issues as they come up.

Administrative Feasibility

The feasibility of all three options administratively is pretty high. The recent bankruptcy of Cintra in Texas has caused NCDOT to already begin investigating each of these objects. However, more investigation and litigation is necessary to determine the feasibility of cutting out Cintra due to their previous contracts.

Social Costs and Benefits

The costs and benefits from limiting private corporation involvement in the toll lanes weigh in favor of the benefits. The risks of privatization of toll roads have already been seen and the social costs were tremendous for people in Texas and Indiana. High toll fees and traffic congestion are a huge social cost and if the government cuts out Cintra and has the opportunity to create successful toll lanes the social benefits could be tremendous.

Environmental Costs and Benefits

Similarly to social costs and benefits the privatization of the toll lanes is risky for the environment and doesn’t offer much in terms of benefits if the lanes fail. However, if the state controls the roads and they fail, the state is still responsible for the environment unlike the corporation. The best option for environmental costs and benefits is which plan is more likely to create successful toll lanes and from my research the state has the best resources to create them.

Overall Outlook

If possible NCDOT should extract themselves from involvement with Cintra. They should look to other more successful state ventures and come up with a state based plan to finalize the toll lanes. The role of toll lanes in the environment and people’s daily lives leaves no room for a profit seeking corporation to take chances. The issue of traffic congestion needs to be dealt with by the state because road infrastructure is such a multilateral issue that needs to be able to work with other agencies of the government and not deal with limitations because of private corporations concerns.

Works Cited

1. Pisarski, A. & Samuel, P. Expand the Intercounty Connector for a truly regional transportation network – The Washington Post. (2015). Available at: https://www.washingtonpost.com/opinions/expand-the-intercounty-connector-for-a-truly-regional-transportation-network/2015/01/02/4f457c20-8d56-11e4-8ff4-fb93129c9c8b_story.html. (Accessed: 21st March 2016)
2. Spanberg, E. NCDOT reconsidering I-77 contract after Texas bankruptcy – Charlotte Business Journal. (2016). Available at: http://www.bizjournals.com/charlotte/blog/queen_city_agenda/2016/03/i-77-developer-says-texas-bankruptcy-wont-impact.html. (Accessed: 21st March 2016)
3. Roads & Highways: Tolls Roads. The World Bank Available at: http://www.worldbank.org/transport/roads/toll_rds.htm. (Accessed: 21st March 2016)
4. Puentes, R. The Indiana Toll Road: How Did a Good Deal Go Bad? – Forbes. (2014). Available at: http://www.forbes.com/sites/realspin/2014/10/03/the-indiana-toll-road-how-did-a-good-deal-go-bad/#5f424d5d539f. (Accessed: 21st March 2016)
5. TheTollRoads.com | Cost of Congestion. Available at: https://www.thetollroads.com/whatshappening/environmentalinitiatives/costofcongestion.php. (Accessed: 21st March 2016)
6. Ochsner, N. Toll Road Troubles: Politicians, experts point to Cintra’s histo – | WBTV Charlotte. (2016). Available at: http://www.wbtv.com/story/31177025/toll-road-troubles-politicians-experts-point-to-cintras-history-as-cautionary-tale-for-nc. (Accessed: 21st March 2016)