Raleigh, N.C. — A public-private partnership will help finish construction on Charlotte's Interstate 485 outer loop five years sooner than expected and will save the state $50 million to $100 million, Gov. Beverly Perdue said Monday.
The first time a public-private model will be utilized in the state, the plan will will require contractors to design and invest in the project to allow the state to move more quickly on other transportation projects, the governor said.
Monday's announcement left State Rep. Robert Stevens, R-Wake, and others questioning why a similar plan couldn't have been utilized for construction on Interstate 540 in Wake County, where construction will be financed with tolls.
"We were told there were no other options – a couple years ago," Stevens said "Apparently there are now some other options, so that's good. It's good for Charlotte, but how about let's share the opportunity across the entire state of North Carolina."
Mark Foster, chief financial officer for the state Department of Transportation, said the size and cost of the I-540 project makes it too big for the design-build-finance plan.
For example, the 18-mile stretch of I-540 now under construction has an estimated price tag of at least $1 billion. The DOT is still in the very early planning stages for another 30-mile segment that would complete the roadway. There are not cost estimates for that part of the project.
In contrast, the 5-mile remainder of Charlotte's outer loop is estimated to cost $185 million.
"The real key is the size of the project and what money is coming in the door to pay that back," Foster said. "With the remainder of the loops, we just don't have enough state revenues or federal revenues to pay back money of that size. We have to find another way to collect money to pay back debt."
About $50 million in private financing will go to complete I-485 and build an interchange between I-485 with Interstate 85. The state will pay back the funding in 10 years, Perdue said.
The rest of the of $540 million project, which also includes widening part of Interstate 85 in Cabarrus County, will be funded with $265 million from the North Carolina Highway Trust Fund and $250 million from federal loans.
Construction could begin by mid-2010 and be complete by 2015.
"We are going to build this project without sacrificing or delaying other transportation projects in the state," Perdue said. "All other loops are important priorities in North Carolina, and we're not putting any of them on the back burner."
The 65-mile I-485 is one of several traffic loops planned in the state to help ease congestion in urban areas. Interstate 295, for example, is also under construction in Fayetteville, and Interstate 840 is under construction in Greensboro.
In recent years, funding for these projects has been controversial.
Last year, Charlotte transportation leaders asked the Obama administration to freeze federal funding for all state highway projects, claiming the state's funding formula for loop projects was unfair.