Tag Archives: 66

“Private partner on I-66 deal is confident commuters will like HOT lanes”

Columnist | Washington Post | January 7
The biggest story on the D.C. region’s highways this new year will be the opening of the high-occupancy tolling system on I-66 inside the Capital Beltway. But this also is the year when the state of Virginia and its private partners plan to start building the HOT lanes outside the Beltway.

According to the Virginia Department of Transportation’s timetable, construction could begin in the fall. The four HOT lanes — two in each direction — could be put into operation in the summer of 2022.

This outside project ultimately will be a much bigger deal than the inside one, despite the many attention-getting controversies over the inner HOT lanes.

Having picked its private partner, a consortium called Express Mobility Partners, the administration of Gov. Terry McAuliffe (D) is feeling pretty good about the deal it’s getting. Virginia Transportation Secretary Aubrey Layne has said repeatedly that taxpayers are getting great terms and that five years from now commuters will start reaping great benefits along one of the region’s most congested highways.

Funding for transit was one of the requirements in the contract. In the context of this deal, transit basically means support for carpools and commuter buses. It doesn’t mean an Orange Line extension.

In fact, one of the few financial limits in the deal requires the state to compensate the private partners if a Metro extension is built along I-66 in the next decade. Given the state of Metro today, I’ll go out on a limb and predict that Virginia is not going to incur any such a liability.

These are some of the reasons McAuliffe and Layne are feeling so good: Express Mobility Partners is responsible for all costs to design, build, operate and maintain the HOT lanes, without any upfront public contribution; the private partners will give the state a half-billion dollars at the financial close this summer as a concession fee, the partners will contribute $800 million over 50 years to build and operate those transit projects, and they’ll give $350 million over the same period to the Northern Virginia Transportation Authority for congestion-easing projects.

So who’s willing to build and operate the four HOT lanes over the next half-century in exchange for the tolls? Do these folks know what they’re getting into making a deal like this?

The companies in the private partnership are Cintra, Meridiam, Ferrovial Agroman US and Allan Myers VA Inc. The main players will be Cintra and Meridiam.

I spoke with Patrick Rhode, U.S. vice president for corporate affairs at Cintra, a subsidiary of Ferrovial, which was founded in 1952 and is based in Spain. Cintra develops and operates toll roads around the world. “We have 27 concessions in 10 countries,” Rhode said.

Among its signature projects is the 13 miles of LBJ TEXpress Lanes along I-635 and I-35E in Dallas. This is a gigantic urban highway system by our region’s standards, but the setup would be familiar to commuters who use the 95 Express Lanes or the 495 Express Lanes, even though there are some differences.

Dallas drivers have the option of traveling in regular lanes that are not tolled. On the TEXpress Lanes, the toll varies based on the flow of traffic, with the goal of letting drivers maintain a minimum speed of 50 mph.

Drivers see the current tolls displayed on electronic signs before entering the TEXpress Lanes. Tolls are collected electronically. Carpoolers and motorcyclists get a 50 percent discount during weekday rush hours.

While I-66 would be the first operation in the Washington region, Rhode said Cintra is confident. “We’re very selective as a company to where we invest,” he said. “We believe that this is very similar to projects we’ve had success on in the past.”

In fact, he described to me a customer model quite similar to what I heard from officials with Transurban, the operator of the other Northern Virginia express lanes: The HOT lanes aren’t necessarily for everyday commuters: Many will use the toll lanes selectively, paying for their trips when they need the assurance of reliable travel times.

He doesn’t see any problem linking the outside-the-Beltway HOT lanes with the inside ones, even though the inside ones will not be part of the Cintra operation. “It’s not uncommon at all,” Rhode said. “It’s seamless to commuters.”

I know many commuters have doubts about all this. Let me hear from you.

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“Q&A: I-66 toll lanes west of the Beltway”

By Max Smith | @amaxsmith | 

Virginia officials signed a deal with a group of private companies to finance, design, build, operate and maintain four toll lanes along Interstate 66 from the Capital Beltway to Gainesville. (WTOP File Photo/Dave Dildine)

WASHINGTON — State transportation leaders are shedding some light on the details of a deal that Virginia signed Thursday with private companies to finance, design, build, operate and maintain new toll lanes along Interstate 66 outside the Capital Beltway.

While what’s known as “commercial close” is happening Thursday, the financial part of the deal, including some negotiations over how much the companies and the state could save based on design revisions that make the project cheaper, is not expected to close until July.

The new lanes — two in each direction — will run from Gainesville to the Beltway and will feature dynamic tolling like what’s in place on the 95 and 495 express lanes.

Why no published toll rate?

A big question from drivers and opponents of the tolls, is often about what the actual toll rates will be.

“There is no published toll,” said Virginia Transportation Secretary Aubrey Layne. “What we’re saying is that it’s the same thing on 95.”

Layne said officials are not “hiding” from the public what the toll prices will be.

The tolls will fluctuate based on the number of cars using the lanes, with the goal of keeping traffic moving at 55 mph at a minimum.

“Dynamically priced tolls are going to generate the same toll because it’s a managing of the traffic,” regardless of who manages them, Layne said.

However, the public will not get to see the way that the private companies set the tolls.

“That is the only proprietary part of this whole process is their algorithm, and we have the ability to look and monitor through this to make sure that they are maintaining it based on the lowest toll necessary to maintain 55 mph,” Layne said.

In response to critics who complain that driving the full length of the lanes both ways every day would be too expensive for solo drivers, Layne emphasized that drivers have the choice to stay in the regular lanes, take commuter buses or carpool to avoid paying a toll.

When will more details come out?

Some construction and other details may not be available until the financial part of the deal closes in July, Layne said.

That is because the state and the private companies may still need to negotiate how much the state will save and how much the companies will save for design changes that make construction cheaper.

“Both teams came up with some incredible ideas. They could be things regarding maintenance and operations, but a lot of them were really about how you build this thing,” said Virginia Department of Transportation Commissioner Charlie Kilpatrick.

Some of the changes from the baseline contract released by the state this summer include changes that avoid costly disruptions to Metro power systems, new interchange designs, and the companies choosing to perform their own snow and ice removal in the express lanes rather than relying on the state.

“They brought some very, very cool alternative technical concepts that were real money,” Layne said.

Kilpatrick said some early work on design and other aspects of the project will begin soon using a loan from the state that will be repaid next year when the financial agreement is finalized.

“As you might imagine, if you’ve closed on a house it takes a couple months. Closing on something like this takes a little bit longer,” Kilpatrick said.

Why did these companies pay up?

Virginia received two bids for the project after a third entity pulled out. The winning bid includes no direct state contribution to the project and a $500 million payment to the state from the winning companies.

The Spanish-led Express Mobility Partners beat out a group that included Transurban, the Australia-based company that operates the 95 and 495 express lanes.

Virginia required that the deal include $800 million in transit funding and later corridor improvements, which come on top of the $500 million payment.

“Here’s one thing you never know unless you have a true competition: you never know why a third party makes an offer,” Layne told the Commonwealth Transportation Board. He said interest rates, taxes, market share and other factors can all play into the motivations for bidders.

Layne also acknowledged that the state’s last-minute move to allow big rigs to use the lanes — as long as the lane designs meet basic noise and safety requirements — added significant value to the deal for the companies.

Why tolls at all?

Many opponents of the toll lanes argue the state should simply build more regular lanes.

“Without tolling, we can’t do it,” Layne said. “Limited resources have consequences. So the question isn’t do something else. The question is either do this or to accept the current.”

Studies supporting the project found that the toll lanes could move more people than regular lanes through the incentives for carpooling or taking a bus to avoid the tolls.

Are the other Express Lanes around here working?

About a third of vehicles using the 95 Express Lanes travel free because they have three or more people inside, said Virginia Deputy Transportation Secretary Nick Donohue.

That is about twice the rate of HOV traffic using the 495 Express Lanes on the Capital Beltway. He expects HOV use on I-66 will fall somewhere between the two.

Eighty-five percent of toll-payers pay for five or fewer trips per month to use the 95 Express Lanes.

“This idea that every day, people are hopping on the 95 Express Lanes and they’re being forced to pay a toll that’s dynamic is inaccurate,” Donohue said.

Various studies supporting the construction of the lanes suggest that adding lanes and pushing people to carpool or to take commuter buses will lead to shorter commutes for those in the regular lanes too, but that’s compared to the bigger traffic mess that would result if no changes were made to I-66.

“If you’re heading eastbound in the morning, and you travel the entire 22 miles, in the future, with no improvements … we anticipate it would take you 90 minutes to travel those 22 miles. With these improvements, that goes down by 37 minutes. And that’s if you’re in the general purpose lane paying nothing,” Donohue said.

“If you were to head westbound in the evening, all the way from the Beltway to the end of this project, with no improvement in the future … it would take 66 minutes with no improvement. That would drop by 22 minutes each afternoon even if you’re in the general purpose lanes and paying nothing,” he said.

 

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“Va. to sign I-66 toll lane deal; includes OK for trucks in lanes” WTOP

By Max Smith | @amaxsmith  

WASHINGTON — Virginia is set to sign a contract Thursday with a group of private companies promising to bring two toll lanes in each direction to Interstate 66 between the Capital Beltway and Gainesville.

The contract includes permission for the company to allow trucks to use the lanes for a higher toll through a provision added in late July.

Virginia Transportation Secretary Aubrey Layne said ahead of the contract signing that the ultimate decision is now up to the companies involved, presuming their designs meet noise, safety and other requirements even with trucks using the lanes. Trucks will be required to pay at least three times the toll other drivers are paying at a given time.

Layne said allowing trucks in the lanes led to a higher payment to Virginia from the Spanish-led private groups, although he did not want to offer a specific estimate. He believes the deal includes enough money to ensure the project will “appropriately address any concerns regarding the trucks.”

Virginia Department of Transportation Commissioner Charlie Kilpatrick suggested some time-sensitive deliveries could prompt trucks to pay to use the lanes. He said that would also create more space in the three general purpose lanes that will remain next to the two so-called “Express Lanes” in each direction.

The selected private construction, financing and operation consortium, Express Mobility Partners, is made up of Ferrovial, a subsidiary called Cintra, Meridam and Allan Myers VA. They won the bidding over a team that included Australia-based Transurban, which operates the 95 and 495 Express Lanes.

Kilpatrick said both teams offered “some incredible ideas” to keep costs down, including different design and construction plans to avoid disturbing Metro power stations that would have proved costly to move or rebuild.

Other alternative technical concepts, some details of which could be revealed after the contract is finalized, include different interchange configurations from the original designs.

Layne said the changes added up to “real money.”

Final designs are expected to go to public hearings in the second half of 2017 after the financial part of the deal is finalized by July. Construction is estimated to cost $2.3 billion.

The winning bid also promises that the road will be largely rebuilt before it is returned to state control in 50 years, Layne said.

The deal is estimated to provide the state $4.1 billion in net present value, so the companies involved are betting that tolls will top that amount over the length of the deal.

Similar to the 95 and 495 Express Lanes, the new tolls are set based on the number of vehicles in the lanes with the goal of keeping traffic moving at 55 mph.

Drivers with three or more people in the car and an E-ZPass Flex switched to HOV mode travel free. The deal also includes funding for options such as commuter buses and park and rides.

Layne said the exact formula used to calculate the dynamic tolls is the only part of the deal that will remain private when the contract details are released, since it is proprietary.

Opponents of tolls have complained about the exact price projections not being available to the public.

“There is no published toll,” Layne said. “Everybody goes ‘Oh, they’re hiding it.’ We’re not hiding the goddamn tolls. What we’re saying is that it’s the same thing on 95.”

 

“Report by union questions record of finalist for I-66 project”

Posted: Wednesday, October 26, 2016 10:30 pm

A labor union is taking aim at the track record of one of the firms under consideration by the Virginia Department of Transportation for the $2.1 billion Interstate 66 Outside the Beltway project, in a report published Monday that highlights a series of bankruptcies and disputes over past projects by the company.

The report on Ferrovial, a Spanish multinational company that operates infrastructure such as toll roads and airports and provides municipal services, was released by Unite Here, which represents 270,000 workers in the hotel, gaming, airport, food service and other industries.

Called I-66 Express Mobility Partners, Ferrovial; its subsidiary Cintra; Meridam, a real estate investment and development company; and Allan Myers, a heavy construction and materials company, are one of two consortiums being considered for the “Transform66 Outside the Beltway Project.”

The public-private project plans to turn 25 miles of the highway from U.S. 15 in Haymarket to Interstate 495 into what VDOT is calling “a multimodal corridor that moves traffic and people more efficiently,” via three regular lanes in each direction, two express lanes in each direction, high-occupancy toll lanes, high-frequency bus service and new or expanded commuter park-and-ride lots.

The union says it seeks “to inform decision makers, elected officials and the public about the past performance of Ferrovial and its subsidiaries,” including bankruptcies, toll hikes, revenue projections that fell far short and questions about transparency in projects in Texas, North Carolina and Indiana.

“Our general interest is just to make sure the contracting and bidding process happens with the maximum amount of transparency and public outreach,” said Arthur Phillips, a research analyst for the union and the report’s author. “That benefits our members who in this case live in Virginia and work at the airports and depend on public infrastructure to get around.”

VDOT intends to announce a preferred bidder with which to begin final negotiations for the I-66 project in early November, said Transportation Secretary Aubrey L. Layne Jr., who added that he and his staff are aware of the issues raised in the report but don’t see them as disqualifying.

“Quite frankly, I’m very comfortable with their ability to do the construction and operate the contract,” Layne said. “The key will be making sure the state will be protected in the deal if something goes bad.”

The union was “led to the company” as it began advocating for airport concession workers, like restaurant employees, as negotiations between Denver International Airport and Ferrovial to privatize the airport’s Jeppesen Terminal continue, Phillips said.

In Texas this year, Ferrovial subsidiary Cintra abandoned State Highway 130, a toll road between Austin and San Antonio, about four years after it opened, filing for bankruptcy and handing ownership to its lenders. About $551 million is owed to the Federal Highway Administration, the San Antonio Express-News reported in August. Unite Here’s report also references a dispute with the Texas Department of Transportation over maintenance and construction problems on the highway, where traffic was 60 percent below initial forecasts.

In Indiana, Cintra-affiliated ITR Concession Co. offered the state $3.8 billion in 2006 to operate a 157-mile toll highway across the northern part of the state before declaring bankruptcy eight years later. And Canadian drivers have complained about toll hikes on the Cintra-owned Highway 407 in Ontario, the Toronto Star has reported.

Another Cintra project, a $648 million agreement with the North Carolina Department of Transportation to widen Interstate 77 and add 26 miles of toll lanes, has faced major opposition, including a bill to cancel the contract that overwhelmingly passed the state House of Representatives but deadlocked in the Senate this past summer.

A major concern is a contract provision that the state compensate Cintra if any future interstate improvements result in a decrease in toll revenue, the report says.

“We think that these things on their own merits are very important for the public to be aware of before committing to a project of this magnitude,” Phillips said.

Patrick Rhode, a Cintra, spokesman, said the company had no comment on Unite Here’s report.

***

The other consortium under consideration, called Express Partners, consists of Skanska, a large multinational construction company, and Transurban, an Australian firm that gave up its long-term concession to the Pocahontas 895 between Henrico and Chesterfield in 2014 amid mounting debt.

“There’s only a handful of companies that really do this,” Layne said. “All these guys have run into problems before.”

Layne said legislation passed last year that changed how the state handles public-private partnerships, or P3s, means the state’s level of exposure is much more limited.

“There will be significant performance standards put into any contract going forward,” Layne said, adding the public subsidy for the project is capped at $600 million.

Both consortiums vying for the concession are required to obtain two independent rating-agency assessments of their traffic and revenue projections.

“If these things are structured correctly, there is very little risk to the state. The tolling risk is passed on and that’s how they get paid,” he said.

The “P3” legislation was passed in the wake of a failed attempt to turn U.S. 460 into a toll road that cost taxpayers $260 million, a deal that also involved a Ferrovial-affiliated company.

“When you look at the companies that compete in this sphere, they’ve all got some problems that you can point to,” said Trip Pollard, an attorney with the Southern Environmental Law Center who has opposed the U.S. 460 project. “Their involvement per se doesn’t raise any red flags. … Much more important to me are the terms of the contract and is this adequately vetted.”

Previous estimates for expanding capacity on I-66, if VDOT were to take on the job on its own, were about $1 billion, not including transit improvements, Layne added, noting that bringing in the private sector allows the state to get much more for its money.

“We’re perfectly happy to do the job ourselves, unless we get a better deal with the private sector,” he said, adding that the state can take possession of the road if Cintra fails, with the risk falling on its investors.

“We negotiated from a position of strength: ‘We’re going to build this road. If you can beat our terms, great.’ ”

“New state transportation program approved, paving way for Rappahannock River Crossing”

Posted: Tuesday, June 14, 2016 3:00 pm

After the Commonwealth Transportation Board voted on the measure Tuesday in Richmond, state Transportation Secretary Aubrey Layne took a moment to say the group had just taken part in “a very historic vote,” creating “for the first time … objective measures” to determine which projects are funded.

Also Tuesday, the CTB approved funding for a pavement and bridge program that will pay for major rehabilitation work on the Chatham Bridge.

Gov. Terry McAuliffe spoke to the CTB on Monday about the prioritization program, also known as HB2, and the importance of a strong transportation network.

Transportation is a “key element” in the state’s economy and the new prioritization program will help get the right projects funded, the governor said.

The program “takes the politics out of it,” he said. “It’s data driven. It’s done by metrics.”

He also lauded the planned expansion of electronic toll lanes on Interstate 66 as well as the extension of the Interstate 95 express lanes merge choke point in Garrisonville, which “has caused a tremendous amount of problems.” <Full story>

“VDOT seeking feedback on I-66 widening inside Beltway” – WTOP

WASHINGTON — The Virginia Department of Transportation is seeking public input on the widening of Interstate 66 inside the Capital Beltway.

Two public meetings are scheduled this week: at 6:30 p.m. Monday in Arlington at Washington-Lee High School, and at 6:30 p.m. Wednesday at Mary Ellen Henderson Middle School, in Falls Church.

Transit staff is expected give a presentation on the widening of eastbound I-66 from the Dulles Connector Road on-ramp to the Fairfax Drive exit.  The presentation will include design concepts, the preliminary project schedule and an environmental assessment.

There will also be stations with information display boards staffed by VDOT project team members who will answer the public’s questions. <Full Story>

“Here’s what VDOT is trying to tell drivers on I-66 ” – Washington Post, Dr. Gridlock

Columnist May 7
Since the Active Traffic Management system was switched on in September, some Interstate 66 drivers have complained that it’s either too active or not active enough.

They say it’s too active when the overhead signs tell them to do things they think are unreasonable, like slow down. They see the system as too passive when the red “X” over the shoulder doesn’t switch to a green arrow when they could sure use another through lane.

Learning how to make the best of these new travel management systems is important to everyone — the commuters and the people who operate them — because the future of surface travel is going to be more about computers, cameras, sensors and signs than about asphalt for new lanes.

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Virginia keeping options open on I-66 HOT lanes (The Washington Post)

August 17 at 5:07 PM

A vote by a government advisory group in Richmond on Monday afternoon allows Virginia state officials to consider a public-private partnership to develop high-occupancy toll lanes on Interstate 66, even as they preserve the option for public financing of the $2.1 billion project.

The vote to proceed was cast by a panel called the Transportation Public-Private Partnership Advisory Committee — and this may be the last time you ever hear of it. The committee’s role concerning the plan for I-66 outside the Capital Beltway was to affirm the Virginia Department of Transportation’s Finding of Public Interest, one of the steps required under state law in developing a public private partnership.

Read more here