If North Carolina lawmakers cancel the I-77 Mobility contract, the state cannot proceed with confidence on other construction projects, said Department of Transportation Secretary Nick Tennyson.

BRADENTON, Fla. — North Carolina would pay more than $800 million if lawmakers terminate the state's first public-private partnership and finance the related Interstate 77 projects traditionally, according to Transportation Secretary Nick Tennyson.

The costs and other concerns about House Bill 954, which would cancel the I-77 contract, were detailed by Tennyson in a June 9 letter to the Senate Transportation Committee, where the bill awaits a hearing.

The House passed the bill by a vote of 81-27 on June 2.

If HB 954 becomes law, the Department of Transportation will not be able to proceed with confidence on other projects if a bill can be used to rearrange or cancel construction contracts, Tennyson said.

Construction on the $648 million project, designed to relieve severe congestion in the Charlotte region by widening I-77 and add tolled express lanes, began in November.

The DOT and I-77 Mobility Partners, with Cintra Infraestructuras SA as the main backer, closed financially on the contract a year ago.

It would take nearly a decade for the DOT to budget funds for the 12 projects included in the I-77 Mobility contract, according to Tennyson.

The cost to terminate the P3 would cover the estimated $302 million fair market value of the contract, $4.7 million for demobilization expenses, and about $500 million to place the road projects in the Department of Transportation's budget.

The $302 million figure was determined by the state auditor last October.

The bill appropriates $25,000 from the Highway Fund to pay "legal or other costs" related to unwinding the project.

Legal and consultant costs could be higher if disputes arise concerning the fair market value of the contract, according to a fiscal note for HB 954, citing information from KMPG, the DOT consultant hired to negotiate the I-77 contract.

"According to KPMG, while contracts for public-private partnership toll [and] managed lane projects have been renegotiated, no contracts are known to have been cancelled for cause or convenience at this stage in the construction process in the United States to date," the fiscal note said.

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