Photo Courtesy of ERC
Construction activities continue for a new Virginia tunnel as a lawsuit looms.

The $2.1-billion Midtown Tunnel project in Virginia is the latest flashpoint in the ongoing debate over the imposition of tolls on existing transportation infrastructure.

On March 13, the Portsmouth, Va., City Council unanimously endorsed a citizen-driven lawsuit challenging the use of tolls to help fund construction of the new tube parallel to the 50-year-old, 4,300-ft-long Midtown Tunnel, which carries more than one million vehicles a month between the city and Norfolk.

The public-private project (P3) involving the Virginia Dept. of Transportation (VDOT) and Elizabeth River Crossings, a joint venture of Skanska Infrastructure Development and the Macquarie Group of Australia, also includes rehabilitation of the existing Midtown Tunnel and the nearby Downtown Tunnel, a one-mile extension of the Martin Luther King Expressway with a new interchange at Interstate 264 and other related road improvements.

Further action is also under consideration by the City Council, including a $50,000 contribution to the lawsuit—filed last July shortly after the project reached financial close—and a moratorium on the sale of city-owned property for the project until the lawsuit is resolved. The lawsuit is scheduled for a hearing in Portsmouth Circuit Court in early May.

Although toll revenue has been a part of the Midtown Tunnel's funding mix since the project was first proposed as a P3 in 2008, opposition among citizens and local legislators flared last year when VDOT and ERC announced that revenue generation would begin immediately on the currently non-tolled existing tunnel to kick-start the rehabilitation work.

VDOT's subsequent restructuring of the financial plan to delay the tolls until at least 2014 did little to pacify project opponents. The lawsuit, which lists 31 individuals, small businesses and an opposition group as plaintiffs, contends that the tolls are essentially taxes and that the authority to impose them cannot be transferred to a private entity such as ERC under Virginia's Constitution.

Still, much of the opponents' rhetoric has focused on the tolls themselves, which will be congestion-priced and subject to increases during ERC's 58-year concession to operate and maintain the Midtown and Downtown tunnels.

ERC spokeswoman Leila Rice declined to comment on the potential impact of the lawsuit and the City Council's action on a schedule that calls for the new tunnel to be completed in late 2016.