McAuliffe, Jones, back transportation reforms
Gov. Terry McAuliffe announced the basics of a plan to tighten control of the state’s planning process on some of its largest transportation projects Wednesday, saying forthcoming new regulations will help Virginia avoid another U.S. 460.
The new legislation targets the state’s public private partnership process, which is used to draw private sector funding for large projects. Those private companies often make their money back – plus profit – collecting tolls on the new roads, bridges or tunnels for decades.
That’s the plan along Interstate 95 in northern Virginia, which the governor visited Wednesday to announce this weekend’s opening of a new toll lanes. A private consortium will collect tolls for 76 years to make back the roughly $854 million in private money raised for the $969 million project budget.
The state had a similar plan for U.S. 460, and signed an agreement with an international conglomerate to build a new tolled highway between Suffolk and Petersburg. The project was put on hold after nearly $300 million was spent despite not having a crucial federal permit to build the road.
Members of the Commonwealth Transportation Board said they were shocked some two years after they approved the deal to learn how much of the state’s money was at risk, with none on the line for private builders. Gov. Bob McDonnell’s administration had pushed the project through, they said.
This new legislation would require more legislative oversight, though not General Assembly votes, on public-private projects often called “P3s.” It also includes a 30-day “cooling off” period once deals are put together so they can be scrutinized before they’re signed, according to House Appropriations Chairman S. Chris Jones, who will carry the bill.
“The terms of the comprehensive agreement will be known,” said Jones, R-Suffolk. “You won’t have decisions made in a vacuum.”
The new rules will also require that some level of risk be borne by the private sector, McAuliffe said in a statement.
The proposal includes several things Jones called for as the U.S. 460 deal unraveled. It’s also a response to an unpopular deal to toll the Downtown and Midtown tunnels between Norfolk and Portsmouth. McAuliffe and others have roundly criticized that deal, which sends toll revenue to Elizabeth River Crossings for nearly 60 years.
Private money remains a crucial part of the states transportation plans, though, according to state leaders.
The federal gas tax hasn’t increased in two decades, and the U.S. Highway Trust Fund used to pay for major projects is dwindling. Virginia leaders struck a deal last year to raise billions in new state transportation dollars, but have also said private equity will be needed on some of the largest projects, such as new water crossings.
In a statement Wednesday, McAuliffe called the I-95 project “a model of how P3 projects should be done.” Transurban, the Australian company that handled the bulk of the project, shared the financial risk, he said.
The project converted 20 miles of existing HOV lanes along the interstate into HOT lanes, which are carpool lanes that other motorists can pay to use. The project also widened about 14 miles of reversible HOV lanes, and it included other improvements.
The lanes open Sunday, and will be toll free until Dec. 29. After that, vehicles with three or more people can use the lanes free, and others will pay a toll.