DALLAS -- Virginia will use a public-private partnership to finance, build, and operate a $2.1 billion system of high-occupancy toll lanes on Interstate 66 outside of the Capital Beltway.
Transportation Secretary Aubrey Layne said Tuesday that the private partner will be selected next year, based on the financial proposals it receives from a short-list of potential investors.
"The commonwealth was able to increase competition and get interested private sector parties to agree to terms that minimize risk and maximize benefits for taxpayers," Layne told the Commonwealth Transportation Board. "To make sure the commonwealth is in a position of strength in negotiations, we will keep the public financing option on the table until a contract is signed."
The state wants to toll the existing high-occupancy lane along both sides of the interstate through Fairfax and Prince William counties, and add another express toll lane in each direction.
Motorists could opt for the three free lanes in each direction or pay a toll, based on the time of day, to use the two express lanes. Cars with three or more occupants would not have to pay a toll.
The project also includes rapid bus service along the corridor and park-and-ride commuter lots with direct access to the express lanes.
Virginia capped its contribution to a potential P3 arrangement at $600 million in June after a preliminary analysis found the state's share could have been as much as $1 billion.
Selection of the P3 option does not alter the state's decision to build HOT lanes on the stretch of I-66 closer to Washington as a public project with no private investment, Layne said.
The state solicited requests for proposals on the project ranging from a long-term P3
design-build-finance-operate model, a design-build-operate project without private funding, and design-build with some alternative technical concepts.
A comprehensive P3 arrangement with oversight from the state for the I-66 HOT project is in the public's best interest, said Charles Kilpatrick, commissioner of the Virginia Department of Transportation.
"We developed business terms that would bring the greatest benefits to the public," Kilpatrick told the transportation panel. "This attracted healthy competition from 13 private sector proposals from five teams, all of them fully engaged."
Details of the proposals were not made public, but Kilpatrick said all three submissions for a P3 option included the required $600 million cap on the state's contribution and a pledge of at least $350 million from toll revenues to fund improvements and upgrades within the highway corridor.
The P3 proposals were submitted by Express Partners, which includes Transurban Group and Skansa USA; I-66 Mobility Partners, consisting of Cintra and Meridiam; and Transformative Solutions Partners, which includes InfraRed Infrastructure, Isolux Corsan, and Fluor Corp.
Kilpatrick will outline the P3 option next week to the state's Transportation Public-Private Advisory Committee.
The private sector partner will be selected in fall 2016, with financial close set for spring 2017. The project is to be operational by 2021.
The 25-mile I-66 project and a proposal to add HOT lanes to the inside the Beltway portion of the highway are the biggest people-moving proposals in the region, Layne said, with an impact exceeding the Purple Line light-rail system or Washington Metropolitan Area Transportation Authority's extension of Metro's Silver Line.
"The goal is to move more people in the limited space we have by car, bus, and train," he said. "Because of limited resources and space, tolling has to be a part of megaprojects like I-66."
