Highway builders would borrow the construction money up front by selling bonds to private investors. Money from the tolls would repay this bond debt.

Q. What makes you believe that people in North Carolina are ready for tolls?

A. I think that part of our challenge is to help people understand that there aren't sufficient funds available to build roads through traditional sources unless they are willing to wait an extremely long period of time for when the funds are available.

Toll construction is really a form of financing highways and infrastructure. When you need them today, when congestion builds to a point of almost breaking, something's got to be done. But tolls are not for everyone, and they are not for everywhere. There's got to be a definite time savings associated with people's willingness to pay the tolls.

Q. Tolls won't pay the entire cost of a road, so where would the money come from to pay the difference?

A. That's called the gap, and we won't know what the gap is for Western Wake [the section of the I-540 Outer Loop from N.C. 55 near Morrisville to Holly Springs] until these studies come back. But once they come back, then we'll have to put our heads together with the Department of Transportation and leaders of the community and other people and see how much money is required.

There is a federal program [under the Transportation Infrastructure Finance and Innovation Act] that takes subordinated debt to help with construction costs of projects like this, and we're hopeful that we can bond a large portion of the gap through these TIFIA loans.

Q. Toll funds would go to repay that as well?

A. Yes.

Q. What would happen if you built a toll road and people didn't use it enough to generate the tolls you were expecting?

A. Then you got troubles. You got real problems. That's the reason these traffic and revenue studies are so important. It's much more of a science than it is an art at estimating traffic use.

The bond grade studies on these projects, for example, take up to a year to conduct and in some cases cost more than a million dollars. The studies that we are doing now are preliminary studies, and they are pretty thorough. However, the bond grade studies are much, much more thorough. That's what Wall Street requires, and they rely on them heavily for the revenue estimates [from tolls].

These are the critical components, and it's not dissimilar to a mortgage on your house. You've got to have the revenue in order to get the loan, and so the revenue is everything -- revenue and costs.

Q. At what point would the toll on a road be lifted?

A. It depends on the term of the bond. Most of them are 30-year bonds today.

Q. So we could expect the tolls to remain for 30 years?

A. Yeah. However, these traffic and revenue studies are usually fairly conservative. And if the project does a lot better than anticipated -- if growth is higher, and revenue is higher, the usage is higher than anticipated -- then you can pay them off earlier, just like you can pay off a mortgage sooner if you want to make a higher principal payment.

Q. How common do you think toll roads will become in North Carolina?

A: I think toll roads will only be used in areas of severe congestion. It's a numbers game, it's a business, and you've got to have sufficient revenue to pay your debt. Otherwise, there's no reason to build them.

In rural areas where the traffic doesn't sustain the debt or the cost of building the project, they will not be built. In places where they do, then it's an option for the locals to consider.

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