Virginia Moves Forward on Hampton Roads Tunnels & I-95 HOT Lanes

Virginia announced two major public/private partnership contracts this week.The first announcement was made Monday, when Gov. Bob McDonnell said the Virginia Department of Transportation entered into a comprehensive agreement with Elizabeth River Crossings to build a new Midtown Tunnel in southeastern Virginia, rehabilitate the existing Midtown Tunnel as well as the Downtown Tunnels, and extend the Martin Luther King Freeway.McDonnell then announced Tuesday that VDOT and Fluor / Transurban reached an in-principle agreement on the major commercial terms to build the Interstate 95 High Occupancy/Toll Lanes Project in Northern Virginia.

“Virginia is recognized as a national leader in leveraging limited public dollars to attract significant private-sector investment and innovation, making complex transportation projects possible,” the governor said in a statement. “By partnering with the private sector, Virginia can advance construction of a second Midtown Tunnel and make other improvements that are critical to the mobility, safety, and the economy of the Hampton Roads region.”

ERC is a joint venture between Skanska Infrastructure Development and Macquarie Group. The agreement, which was signed by VDOT Commissioner Greg Whirley under Virginia’s Public/Private Transportation Act, authorizes construction to begin next year, pending financial close early in 2012.

“The Midtown Tunnel project has been at the top of the region’s priorities for many years,” Virginia Transportation Secretary Sean Connaughton said in a statement. “The state’s use of a public/private partnership structure will enable VDOT to attract approximately $1.7 billion in private investment to a project that yields tangible long-term benefits to the region and the state.”

VDOT will maintain ownership of the tunnels and oversee ERC’s activities. ERC will finance, build, operate, and maintain the facilities for a 58-year concession period. ERC will also assume risk of delivering the project on a performance-based, fixed-price, fixed-date contract, protecting users and taxpayers from cost overruns and delays.

Whirley said the tunnels will save the average user 30 minutes per day, provide additional hurricane evacuation capacity, and create hundreds of construction jobs.

HOT Lanes Will Cost Just Shy of $1 Billion

For the I-95 HOT Lanes Project, agreement on the commercial terms means both parties have established the major tenets of a contract. This step forward enables VDOT and Fluor/Transurban to finalize the details of a comprehensive agreement and financing package for the $940 million project.

“The project will bring congestion relief and new travel choices to Northern Virginians,” McDonnell said. “It will also provide an economic boost by supporting nearly 8,000 jobs over the construction period and stimulating $2 billion in economic activity.”

Fluor/Transurban will finance $843 million of the HOT lanes, with the state contributing $97 million, which will be used in part to advance construction activities as early as Spring 2012.

The project will expand the existing High Occupancy Vehicle facility on I-95 to create 29 miles of HOT lanes between Edsall Road in Fairfax County and Garrisonville Road in Stafford County. Motorists will have an option to pay a toll to use the HOT Lanes, while carpools with three or more people and buses will have free access to the lanes.

VDOT will invest $200 million to expand bus service in Spotsylvania, Stafford, Prince William, and Fairfax counties as well as construct more than 3,000 new park-and-ride spaces.

More information on the tunnels project is available at www.midtowntunnel.org. More information about Virginia’s Office of Transportation Public/Private Partnerships is available at www.vappta.org.