Virtually sidelined for more than a year by upheaval in the world’s financial markets, private capital appears ready to get back into the infrastructure development game. And for cash-strapped states like Virginia, the comeback couldn’t occur a moment too soon.
Last week, VDOT announced approval of a conceptual proposal for a new tunnel connecting Norfolk and Portsmouth submitted by Elizabeth River Crossings LLC (ERC) under the state’s Public-Private Transportation Act.
Known as the Downtown Tunnel/Midtown Tunnel/Martin Luther King Freeway (MLK) Extension, the project will create a new two-lane tunnel under the Elizabeth River parallel to the nearly half-century old 4,300-ft Midtown Tunnel, which will also undergo maintenance and safety improvements.
Other project elements include a one-mile extension of the MLK to Interstate 264, including a new interchange at High Street; improvements to the nearby Downtown Tunnel; and modifications to and an adjacent highway interchange.
Projected to cost $1.3 billion in VDOT’s 2008 solicitation for proposals, these projects will help increase capacity and ease congestion along two key routes serving the area’s extensive commercial port and distribution facilities. The improvements will also enable Hampton Roads to better compete for coveted shipping and manufacturing business.
ERC is a collaboration of Skanska Infrastructure Development and the Macquarie Group of Australia, which recently purchased the privately built and operated Dulles Greenway toll road in Northern Virginia. ERC’s construction team includes Skanska USA Civil Southeast, Kiewit Construction Company, and Weeks Marine.
It’s now up to ERC and VDOT to negotiate an interim agreement, which will serve as the foundation for a comprehensive agreement and a hoped-for start to the project’s five-year construction phase in 2010.
Virginia has been among the more aggressive states pursuing P3 opportunities. In addition to the Greenway, which was in the vanguard of modern privatized infrastructure projects when it opened in 1995, the state has collaborated with private partners to build the 8.8-mile Route 285/Pocahontas Parkway toll road and the 17.5-mile Route 288 southwestern bypass in Richmond; six interchanges along Route 28 in Fairfax and Loudon Counties; and, currently, 14 miles of high-occupancy toll (HOT) lanes along the Capital Beltway/I-495.
Earlier this summer, it was reported that Virginia was close to completing another P3 arrangement to add another 28 miles HOT lanes along I-95/395 from Dumfries to the Potomac. However, no deal has been announced.
UPDATE 8/18/09: The Washington Post reports that Virginia has put off the 95/395 HOT lanes project due to concerns over how the proposal will be received in the current bond markets. The Beltway/I-495 HOT lanes project is unaffected by this move.