Financial freeze delays turnpike

The nation's economic crisis will delay work on the 18.8-mile Triangle Expressway toll road in Research Triangle Park and Western Wake County -- and it might reduce the project's land and construction costs.

David W. Joyner, executive director of the N.C. Turnpike Authority, said Thursday that he hopes the chilly climate on Wall Street will warm up enough so he can borrow about $600 million for TriEx, the expressway, sometime in the first three months of 2009.

The turnpike authority will use money from bonds and a $400 million federal loan to buy the 730 acres it needs for rights-of-way and to start construction on the six-lane expressway.

TriEx will run south from Interstate 40 through RTP, western Cary and Apex to N.C. 55 at Holly Springs. The state had hoped to issue bonds in October and start construction in December.

The turnpike authority, a state agency, has estimated it would cost around $1 billion to buy the land, build the road, repay the loans and pay for operation and maintenance -- collecting tolls, repaving the expressway -- over the next 40 years.

But construction costs are falling as fuel costs drop and contractors compete for work. Bids for recent state highway contracts have come in far below engineers' cost estimates.

"These guys need the business, and they want to keep their crews working, so we're hoping construction prices will come down," Joyner said.

Land costs are likely to fall, too. The turnpike agency might have a stronger bargaining position with land owners than it could have expected a few months ago.

Joyner thinks that land owners will be more eager to accept the price offered by the state and less inclined to fight in court for a chance of getting more money later.

"Cash is king, now," Joyner said. "People that didn't need cash in August are more interested in seeing cash today.

"We're talking about sizeable amounts of money that you can walk in and write a check for."

Before Joyner can write those checks, he'll have to persuade Wall Street to buy his bonds.

"It's going to happen," he said. "I'm optimistic that we'll issue bonds in the first quarter of 2009."

Carol Rein of Merrill Lynch, a financial consultant for the TriEx project, said it was hard to predict how soon Wall Street would be ready to do business.

"Interest rates are moving pretty wildly on a daily basis," Rein said. "We're waiting to see where the market goes. It's an issue of when, not whether."