Maryland Picks Transurban-Macquarie for $11B Maryland P3 Megaproject
Maryland has tapped Transurban (USA) Operations, Inc., and Macquarie Infrastructure Developments LLC to lead the development phase of its progressive public-private partnership (P3) plan that will add tolled express lanes to sections of the I-495/Capital Beltway and I-270 corridor. It will also entail building a new Potomac River crossing to Virginia.
Pending state approvals and environmental reviews, the team will negotiate a 50-year agreement to design, construct, and operate the improvements in two of metropolitan Washington’s most congested corridors.
The project was first proposed by Gov. Larry Hogan (R) in 2019, and cost estimates have ranged between $9 billion and $11 billion.
In addition to providing equity backing for the team, known as Accelerate Maryland Partners, the two companies will also serve as lead contractor, a departure from the shortlisted team lineup that listed Archer Western as primary builder.
Four teams had shortlisted for the development contract, but one led by ACS/Dragados opted last year not to move ahead in the procurement.
Team Change
A Transurban spokeswoman told ENR that Archer Western will have to compete when the development team procures construction services if the contractor chooses to participate, adding that "the developer-led business model includes securing one or more design-build contractors as part of the competitive process," with the state approving the team change during the proposal stage.
Dewberry Engineers Inc., and Stantec Consulting Services Inc. will be the project’s lead designers.
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According to a Maryland Dept. of Transportation (MDOT) statement, the selection provides the state with “a partner with strong regional connections and a track record of success” in delivering managed lane P3 projects. Transurban developed and currently operates three tolled express lane projects in Virginia, including a 14-mile Beltway segment that will link to those planned for Maryland’s side of Washington, D.C.’s perimeter highway.
MDOT noted that the Accelerate Maryland Partners’ technical proposal for the 50-year progressive P3 agreement includes a minimum $300-million investment in local transit services, $50 million in community grants and $25 million to support emerging technologies through an innovation alliance.
The proposal also identifies detailed solutions to minimize property and utility conflicts and promote environmental stewardship—aspects that have been heavily criticized by regional planning agencies and citizens groups—and promises union and local business involvement, including a planned Project Labor Agreement.
Fine Points
Accelerate Maryland Partners’ financial proposal includes a $145-million development rights fee and a $54.3-million predevelopment cost cap. MDOT said the group also proposed “a higher rate of return on its equity investment in exchange for taking greater construction cost risk upfront, reducing the state's risk in the project.”
According to Maryland DOT, any shortlisted proposer not selected may receive a stipend of up to $500,000 for documented expenses if the team submitted the required documents. In exchange for that, the agency would have the right to use any ideas from the predevelopment work proposal on the project.
MDOT’s selection of Accelerate Maryland Partners will go through a multi-level review and approval process that the agency hopes will be completed in May.
At that time, the team will be given a notice to proceed with predevelopment and preliminary design of American Legion Bridge and I-270 improvements, concurrent with environmental studies for the project’s preferred state-chosen design alternative. That alternative calls for two express toll lanes in each direction on both highways.
The environmental review process is expected to take approximately one year, which would be followed by negotiations between the state and Accelerate Maryland Partners to get final design and construction underway.
Use of the progressive P3 delivery model “will provide more efficient pricing and better schedule certainty” for the project, the MDOT statement said.
