A controversial plan to construct a tolled bypass to U.S. Route 460 in southeast Virginia could be in for additional hurdles as the state's transportation agency and inspector general investigate potential procurement violations for the $1.4-billion project.

At issue is whether a proposed 55-mile limited-access toll highway between Suffolk and Petersburg was developed, contracted and invoiced in accordance with the Virginia Dept. of Transportation's procurement rules, as well as those of the state's Public-Private Transportation Act.

The highway, intended to provide direct access to the Interstate 95 corridor for heavy trucks serving Virginia's ports and support disaster evacuation for coastal communities, was originally developed to be financed almost entirely by the private sector in return for toll revenue. A lack of investor interest led the state to restructure the financing strategy, relying on a combination of federal and state transportation funds—$250 million from the Virginia Port Authority and $216 million from the sale of bonds through a non-profit project-specific P3.

Investigators also are looking at payments to the project's design-build contractor, 460 Mobility Partners, a consortium led by Madrid-based Ferrovial Agroman S.A., and American Infrastructure, Worcester, Pa.

Gov. Terry McAuliffe (D) suspended the project in March when media reports revealed that $250 million had been spent with little more than preliminary engineering work completed. Several key environmental permitting issues, including the U.S. Army Corps of Engineers' concerns about the proposed disruption of nearly 500 acres of wetlands, remained unresolved as well.

These revelations compounded existing opposition to the project by local officials and citizens unimpressed with promises of toll road spin-off economic development such as manufacturing and distribution centers, and wary of the loss of traffic on existing Route 460, which was to remain open as a free alternative route.

The state's Commonwealth Transportation Board has called on VDOT to make the P3 project process more transparent. The agency is proceeding with environmental, social and economic assessments and expects to conclude by the end of the year.

While the investigation is due to be completed by the end of June, the state's Commonwealth Transportation Board has called on VDOT to make the process for developing and delivering P3 projects more transparent, and take steps to better identify and limit the public's risk in such ventures. VDOT is to present recommendations for implementing these reforms to the Board later this year.

Meanwhile, the agency is proceeding with environmental, social, and economic assessments of the original toll road route and four other alternatives, including rebuilding the existing four-lane U.S. 460. The process, which will include public hearings on a Supplemental Draft Environmental Impact Statement, will culminate with VDOT recommending a preferred alternative by the end of 2014.