DALLAS -- Private investors will begin collecting tolls later this month on 29 miles of managed express lanes on a northern Virginia interstate highway under a concession agreement that extends to 2087.
Funding for the $950 million project that was financed and built under Virginia's Public-Private Transportation Act included: $280 million of private equity from Transurban and its partners in 95 Express Lanes LLC; $252.6 million of proceeds from tax-exempt private activity bonds; an $83 million state transportation grant; and $25 million of early development costs by Virginia Department of Transportation.
The project sponsors also received a $300 million direct loan under the federal Transportation Infrastructure Finance Innovation Act. The federal government's subsidy cost on the TIFIA loan will be paid through a Transportation Investment Generating Economic Recovery grant.
The managed lanes on Interstate 95 south of Washington, D.C., opened for service on Dec. 14 but will remain toll-free for all motorists until Dec. 29, except during designed high-occupancy periods.
Carpoolers and vehicles with three or more occupants can continue to use the tolled lanes for free. Other motorists can use the existing free lanes or pay tolls on the managed lanes that range from 20 cents per mile when traffic is light to 80 cents per mile during rush hour. The average trip is expected to cost between $6.00 and $8.00.
The lanes stretch from Stafford County to a connection in Fairfax County with the Interstate 495 Beltway that loops around the District of Columbia.
The Virginia Department of Transportation owns the highway lanes, which will be operated and maintained by the concessionaire, a partnership of Fluor Enterprises and Transurban.
Virginia Gov. Terry McAuliffe said the P3 process is critical to the delivery of large transportation projects such as the new I-95 project and the tolled lanes on I-495 operated by the same private partners since they were completed in 2012.
"Without the ability to partner with the private sector and leverage their capital and resources, Express Lanes would not have been built," McAuliffe said. "Transurban shared in the risk, bringing private capital to the table and putting the money to work for motorists and ultimately Virginia's economy."
Virginia is a setting an example for the rest of the country in its use of P3s in transportation, he said.
"The 95 Express Lanes project is a model of how P3 projects should be done," McAuliffe said.
Adding managed toll lanes to existing highways could help reduce delays and congestion while also providing significant revenues to build and maintain transportation infrastructure, said Pat Jones, president of the International Bridge, Tunnel and Turnpike Association.
"We believe this as a significant project," Jones said. "We see states that are watching the Virginia experience with managed lanes quite closely."
The project included the conversion to tolling of 20 miles of two high-occupancy-vehicle lanes on I-95 and nine new miles of tolled lanes to eliminate a bottleneck where the HOV (high occupancy vehicle) lanes ended. Work began in 2012 and was completed earlier than expected.
Current federal law forbids states from adding tolls to existing interstate lanes but allows them on new lanes that are added to increase road capacity and reduce congestion.
Tolls are collected electronically through tags or transponders. The express lanes are reversible, with entry and exit points that open and close depending on the direction of the heaviest traffic flow.
