On the south end of the beltway segment, the team is building one precast concrete girder bridge and seven steel- plate girder bridges, as long as 2,000 ft, for the Springfield Interchange, which recently received a $650-million widening in seven phases. VDOT asked the design-build team to take on the $130-million phase eight. The decision was made during final negotiations, says Cloyed. “We’d had it on the shelf for some time. It was waiting on the HOV connections of the beltway. It only made sense to incorporate it into the contract,” he says.
The design-build team also had to acquire rights-of-way as part of the risk. Eight homes are being acquired. Owners of some 140 parcels of land had to give permission for the team to use portions, says Portley. The team reduced impacts in many cases by installing sound walls. There are 70,000 linear ft of them along the 14 miles.
The project is divided into seven design segments, with HNTB Corp., Kansas City, as the lead. There are four construction segments—including one for Springfield Interchange’s phase eight—each with its own construction manager. Almost 200 design packages were completed in 18 months, says Cloyed.
Public outreach is another key aspect of the project. Some 400 outreach meetings have been conducted, says Jamie Breme, VDOT spokeswoman. Teams constantly go out to inspect construction zones and provide updates about upcoming lane closures. Newsletters, a website and brochures go out on a regular basis regarding the beltway as well as four other major projects.
The expansion was first studied in the early 1990s, but an initial traditional plan failed. The estimated cost was $3 billion, and 350 homes and businesses would have been impacted. Here, only eight are affected, says Steinhilber.
Making the Deal
The original P3 proposal was filed in 2002 under the state’s Public-Private Partnership Act, says Mitchell Lester, project director for Fluor-Lane. The next five years featured intense contract development and preliminary engineering. “There were two design public hearings, and HNTB couldn’t start work until the designs were approved,” he recalls. That delay lasted a few weeks.
Virginia is contributing $409 million to the project, and $349 million is being provided by private equity funded by Transurban and Fluor. Another $586 million is coming from private activity bonds backed by the concessionaire, and the federal Transportation Infrastructure Finance and Innovation Act is providing a $585-million loan. VDOT maintains ownership of the beltway, licensing the concessionaire to operate it for 75 years.
Many contractual provisions exist to protect public interests. For example, if the concessionaire makes more toll revenue than expected, it must share the windfall with VDOT, says Steinhilber. And VDOT is not constrained by any non-compete clauses.
The private partners face, on average, $250,000 a day in debt service if the new toll lanes aren’t open after Dec. 20, 2012. That loss gets transferred to the design-build team as liquidated damages. But if the lanes open earlier, it could earn, as a bonus, a share of the resulting toll revenue with a six-month cap.
The concessionaire is confident of its investment, says Steinhilber. “We’re looking at 15-20 years for return on investment,” he says. Due to current global market conditions, however, he expects the payback period to fluctuate due to interest rates since almost $600 million of financing is in private activity bonds held by banks. The team anticipates, conservatively, a three-year ramp-up period in tolling revenue as the public gets used to the lanes.
While the tolling system will allow vehicles with three or more occupants, including buses, free use of the toll lanes, electronic signs will change prices according to the volume of traffic. To accomplish this, the HOT lanes will feature 36 open-road electronic gantries that identify a vehicle’s entry and exit points. More than 80 traffic sensors located every third of a mile and 30 closed-circuit television cameras will monitor traffic volume. A network of signs will keep drivers informed in real time. Steinhilber says, “The more the congestion, the higher the toll.”