The Virginia Department of Transportation has issued a request for detailed proposals (RFDP) for a public-private partnership to construct a 55-mile extension to the state’s Route 460 highway.
The Route 460 project has already elicited interest from three consortia, whose members submitted conceptual proposals for the concession last autumn. Earlier this year, the Virginia Department of Transportation cleared all three private bidders to participate in the next stage of the procurement process.
The three approved consortia were:
– MultiModal Solutions, which is comprised of Kiewit Construction, Italian toll road operator Autostrade, and Barclays Capital, among others;
– Spanish toll road developer Cintra, along with four other engineering and consulting firms;
– 460 Partners, which includes engineering firm Skanska, Infrastructure Capital Partners, CGA Capital and others.
Cintra estimated the project’s design and construction costs to be $1.5 billion, while MultiModal Solutions and 460 Partners estimated costs of $2.2 billion and $2.7 billion respectively.
According to the RFDP, the concessionaire will collect tolls on the project and assume all traffic and revenue risks. Toll increases will be limited to three percent annually or adjusted to reflect changes in the US Consumer Price Index.
Public financing for the Route 460 project will be no more than $500 million, according to the RFDP.
The RFDP also states that the concessionaire should apply for funding from the US federal government TIFIA programme, which provides low-cost, long-term credit for infrastructure projects under the 1998 Transportation Infrastructure Finance and Innovation Act (TIFIA). But it also states that the private developers should create their financing plans with the assumption that TIFIA funding is not granted.
The 55-mile, four-lane divided highway extension will improve safety, increase freight traffic, and create a new emergency evacuation route, as well as improve “military strategic connectivity”, according to the project page for the Route 460 corridor.
The Virginia Department of Transportation expects to issue a final RFDP by November, with the aim of receiving financial proposals next February and signing a comprehensive agreement in May.
Virginia also solicited proposals for the Route 460 corridor in 2006, but the state cancelled the original procurement process last year, citing changes in market conditions.