Public-private partnerships in U.S. transportation got a big legal "treat" on Oct. 31, when the Virginia Supreme Court overruled a lower court's decision against the state's P3 legislation.

In May, the Portsmouth circuit court ruled in favor of Danny Meeks, et al, which challenged the Virginia Dept. of Transportation's (VDOT) right to use tolls to fund a $2.1-billion project that would build a new tube parallel to the 50-year-old, 4,300-ft-long Midtown Tunnel. The court ruled that allowing VDOT to set toll rates on the existing tunnel would violate the state's constitution.

Elizabeth River Crossings, a joint venture comprising Skanska Infrastructure Development and the Macquarie Group of Australia, also plans to rehabilitate the existing tunnel and the nearby Downtown Tunnel as part of its 58-year concession agreement.

VDOT filed an appeal to the Supreme Court. The American Road & Transportation Builders Association (ARTBA), along with the National Conference of State Legislatures, filed a friend-of-the-court brief in the case. ARTBA's brief argued that, as manager of the state's roadways, VDOT was the most qualified entity to determine toll revenues needed to support the Hampton Roads project. The Virginia Transportation Construction Alliance, ARTBA's affiliated chapter, also filed an amicus brief.

ARTBA voiced concern that the lower-court ruling, if upheld, could foster challenges in other states that are venturing into P3s. "If the lower court's decision had been upheld, it would really have been problematic for a lot of other states and for Virginia itself," says Rich Juliano, ARTBA senior vice president of strategic initiatives.

Gov. Bob McDonnell (R) released a statement praising the Supreme Court ruling. "While we understand the financial impact this toll will have on local commuters, the Elizabeth River Tunnel project is a necessity to ensuring ongoing safety and economic development in the region," he said.