Highway Project
$6B Maryland Beltway P3 Clears Last Hurdle for Design Start
Maryland’s Board of Public Works has approved the initial contract for the Beltway/I-270 managed lanes project, clearing the way for design work to get underway on the multi-billion highway expansion program outside the Nation’s Capital.
The vote comes more than six months after the state Dept. of Transportation selected a team led by Transurban (USA) Operations Inc., and Macquarie Infrastructure Developments LLC for the development phase of a progressive public-private partnership plan to add tolled express lanes to 37 miles of the region’s busiest highways.
Four express lanes, two in each direction, are to be added to the I-495/Capital Beltway, which rings part of Washington, D.C., in an area between the Virginia border and the I-270 spur, as well as the I-270 corridor north to Frederick. Also included is upgrade of the existing Beltway bridge across the Potomac River to connect with Virginia’s express lanes network.
Approval by the three-member board, which includes project booster Gov. Larry Hogan (R), is required for all capital appropriations in the state, but it was delayed by a number of events. They include a post-award bid protest lodged by unsuccessful P3 contender Cintra, a unit of Spain's Ferrovial, and state legislators’ concerns about risks associated with the project delivery model, particularly given schedule and cost difficulties with Maryland’s other major P3 venture—the $2 billion Purple Line light rail.
Last fall, MDOT paid $250 million to buy out design-build contractor Fluor Corp. A replacement contractor has yet to be announced for the project, which is already more than two years behind schedule.
Related to the Beltway lanes project, the metropolitan Washington regional transportation planning board in June voted to remove it from its list of long-term projects eligible for federal funding. Hogan marshalled sufficient support to reverse that vote last month.
With the final state procedural hurdle cleared, the Transurban-Macquarie team will spend approximately $54 million over the next year to develop preliminary designs for the toll lanes and bridge expansion. and will be given the first opportunity to negotiate a 50-year contract for final design and construction, currently estimated to be $6 billion and to be paid for via toll revenue. State transportation officials say that contract could be ready for Board of Public Works consideration as early as next summer.
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Plans call for the project’s first 12-mile section—the bridge, Beltway portion and easternmost section of I-270—to be built first. It also includes some of the program’s most controversial sections, given the proximity of residences, federally owned property and parkland. The plan has also been criticized for its emphasis on highway expansion at the expense of transit, even though both Transurban-Macquarie and MDOT have promised multi-million-dollar investments in new and upgraded transit services.
Legal action could also derail the project, particularly since Cintra has yet to announce whether it will contest MDOT’s P3 team selection in court. In the event the project is canceled or fails to receive federal regulatory approval, Transurban-Macquerie will receive a $50 million payout.
For the Purple Line, the state shortlisted three bidding teams in early March to submit formal proposals—Nanuet, NY-based Halmar International; a joint venture of Dragados USA Inc. and OHL USA bidding as Maryland Transit Solutions; and a joint venture of Tutor Perini and Lunda Construction Co.
The selection, which was then set for June, was delayed by the state to fall.
In an early August discussion of Tutor Perini's latest quarter results, CEO Ron Tutor said its team proposal "will be submitted in the latter part of September with the contract award we would expect within the 60 to 90 days thereafter." He said work is set to a start "in January and it is essentially designed ready to go."
