A public-private partnership (PPP) to develop a 56-mile long rapid transportation corridor along the I-95 and I-395 highways in Virginia has been delayed, according to a memo from Virginia Department of Transportation chief engineer Malcolm Kerley.
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HOT Lanes: still a |
“Our original schedule called of the project to reach commercial close this month. However, due to local government and community concerns, as well as challenging credit market conditions, we will not reach commercial close this month,” Kerley said in the memo.
Commercial close signals agreement on all contractual documents and technical issues prior to financial close, when projects are funded.
Kerley said the Department’s project team will press on with the project but will need more time to undertake additional planning for the project, which will link the Washington DC metropolitan area with the Fredericksburg Metropolitan Area, about 56 miles southwest, using high occupancy toll (HOT) lanes and rapid bus service.
HOT lanes are tolled highway lanes whose tolls adjust with traffic. As more cars enter the highway, rates go up; as traffic decreases, so do tolls, ensuring a reliable traffic speed for drivers.
Buses, carpools or other high-occupancy vehicles (HOVs) will have free access to the HOT lanes, while vehicles with fewer than three occupants can choose whether to pay to use them or use free lanes that do not utilise HOT technology.
Similar technology has been utilised near Washington DC for another highway PPP development – the $2 billion Capital Beltway HOT lanes project. The 14-mile highway segment is now under construction and is expected to be completed in 2012. It will connect to the I-95/395 HOT lane project when it is completed.
Both projects are being financed by a consortium of private investors that includes Sydney toll road developer Transurban and US engineering firm Fluor. The Capital Beltway HOT lanes project included a wide range of public financing, including tax-exempt private activity bonds, federal loans under the TIFIA (Transportation Infrastructure Finance and Innovation Act) credit programme, and a contribution from the Virginia Department of Transportation. But the I-95/395 HOT lane project is going to be 100 percent privately funded, according to Young Ho Chang, project manager for the department.
The project’s timeline calls for a 2009 financial close. Chang wouldn’t comment on whether that is still achievable or what the final cost of the project will be.
A 16 July 2009 presentation on the project by the Virginia Department of Transportation cites a $195 million funding requirement from Transurban and Fluor.
The two firms also partnered on Virginia’s Pocahontas Parkway project – an 8.8 mile cash toll road southeast of Richmond. That road, which opened for traffic in 2002, was the first PPP awarded in the state of Virginia under its 1995 Public-Private Transportation Act, according to a Fluor press release.
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