Virginia, considered among the leaders in promoting P3 projects, demonstrated that there are always lessons to be learned about this still-evolving procurement method, namely that tolling existing infrastructure is not a popular idea.
Earlier this week, the administration of Gov. Bob McDonnell (R) backed away from its initial plan to impose tolls on the existing Midtown Tunnel between Norfolk and Portsmouth, and use the revenue for its share of a new $2.1 billion parallel tube to be built by Elizabeth River Crossings LLC (ERC), a joint venture of Skanska Infrastructure Development and the Macquarie Group of Australia.
The nearby Downtown Tunnel between the two cities would also be tolled for the project, even though its capacity would remain unchanged.
Instead, the administration has amended its contract with ERC, postponing tolls on both tunnels until substantial completion of the new Midtown Tunnel, currently scheduled for 2017.
The change comes amid near-universal opposition to the toll plan from local leaders and residents, particularly the notion of having motorists “pay ahead” for something that wouldn’t be built for years and, in the case of Downtown Tunnel users, something they might not use at all.
Several attempts to overturn the deal failed in the most recent session of the General Assembly, setting the stage for several lawsuits that threatened the start of construction later this year.
Nevertheless, the McDonnell administration insisted that the strategy had already been agreed to with ERC, and that any changes would cost the state money—likely, a legislative appropriation of $125 million to $350 million to cover the upfront toll revenue promised to ERC. Virginia is already on the hook for $362 million, expected to come from GARVEE bonds and maintenance savings.
But with the change of heart, the Midtown and Downtown Tunnels will remain free while, in true P3 spirit, Virginia and ERC “collaborate” on a new toll collection strategy.
The four-year construction project, however its paid for, calls for a new two-lane tunnel parallel to the 50-year-old, 4,300-ft long Midtown Tunnel, which currently carries more than one million vehicles a month and will also undergo renovation. Other elements include a one-mile extension of the Martin Luther King Expressway with a new interchange at I-264, and other related road improvements.
The project aims to increase capacity and ease congestion along two key routes serving the area’s extensive commercial, port, and military facilities.
Improved access to the Port of Virginia is particularly important to the region, given the expected 2014 completion of the Panama Canal Widening. A primary purpose nother P3 project, a $1.6 billion four-lane tollway parallel to U.S. Route 460, is to provide an expedited motor freight connection between Hampton Roads and I-85 in Petersburg. Selection of a development/design-build-operate team is expected this summer.