Maryland’s controversial $7.6-billion plan to build tolled express lanes along two Washington, DC-area interstates has suffered a potentially fatal blow with the departure of the private development consortium from the project.
Accelerate Maryland Partners, led by Transurban North America and selected in 2021 for the initial phase of the progressive public-private partnership development, cited a 2022 state political shift among reasons for exercising its contractual right to terminate involvement in the plan. The exit was announced March 10.
The project would build 37 miles of tolled express lanes in sections of the I-495/Capital Beltway and I-270, as well as rebuild an existing 60-year old Potomac River crossing to link with Virginia’s express lanes network operated by Transurban. The project received federal approval in August 2022, although the Maryland chapter of the Sierra Club and three other groups filed a federal lawsuit two months later claiming deficiencies in its environmental analysis.
Dewberry Engineers Inc., Stantec Consulting Services Inc. and Parsons Corp. were leading project design for the consortium, and Tutor Perini Corp. was set to manage construction with O&G Industries and Lunda Construction.
Former Gov. Larry Hogan (R), who first proposed the express lanes in 2017 and was the project’s biggest backer, was unable to finalize a 50-year design, build, operate and maintain contract with Accelerate Maryland before leaving office in January.
Democrat Wes Moore, who was elected governor last year, has long criticized the express lanes’ “deeply flawed” P3 procurement process, pointing to its lack of transit investment and environmental and community impacts.
Referring to the consortium executing its contractual right to withdraw, Maryland "does not owe any payment," Moore said in a statement, adding that the state "remains committed to continuing progress and will move forward in a manner that ensures social equity, environmental protection and engagement with local partners."
Newly named Transportation Secretary Paul Weidefeld said the state "is committed to delivering a new American Legion Bridge," but he did not comment further on whether the overall Beltway project would be rebid or scaled back, or how the state would contract for bridge reconstruction.
Amanda Baxter, Transurban senior vice president of development and operations, said in an ENR interview that the state’s other P3 project—the Purple Line light-rail system—faced legal challenges when it moved forward in 2017. Those contributed to delays and cost overruns that have left the 16-mile line falling five years behind schedule and $1.4 billion over its original budget.
“That really didn’t fare well for the taxpayers of Maryland,” Baxter told ENR. “We didn’t want to position the state and certainly not our business squarely in the middle of that.”
Uncertainties arising from supply chain and other financial pressures in the construction market also factored into Accelerate Maryland’s decision to withdraw, she said, as did the state political leadership change.
According to Baxter, Accelerate Maryland had hoped to engage with the new administration on ways to move the express lanes plan forward. Despite overtures to incoming leaders, the team was refused an extension to an impending deadline to submit a binding proposal that would detail how the project would be brought to commercial and financial close.
“It was definitely a signal,” Baxter said, adding that Accelerate Maryland’s partners faced the prospect of being bound by the proposal regardless of the lawsuit’s outcome, something that might not be known for a year or more.
“It just made it really challenging from a business decision to say, ‘let’s keep doing this,’” she said.
While Maryland retains environmental approval to build express lanes, Baxter said the Accelerate Maryland partners respect the state’s decision to pursue alternatives “whether in project scope, delivery or partnership.”
The decision to withdraw involves no financial settlement between Accelerate Maryland or the state, Baxter confirmed. She said she does not expect any unresolved issues that could lead to litigation.
Baxter declined to say whether Transurban would pursue other P3 opportunities in Maryland but she remained hopeful that the state will move forward with the express lanes plan in some form.
“This is not about trying to make Maryland unsuccessful,” she said “This is making a business decision based on the current landscape.”
Also unclear is the impact of the Transurban decision on a long-running bid protest by a Cintra-led team that was not successful in the private consortium competition. The challenger claims irregularities in the selection process. The state rejected a circuit court-ordered reassessment of the protest last year but the company has a separate legal challenge pending in Maryland’s Court of Appeals.