Toll projects generate controversy in Virginia

April 9, 2012

In Norfolk there's last minute pressure to defer a financial close on the Elizabeth River tunnels toll concession with the Macquarie/Skanska partnership. And in northern Virginia Fairfax County and Loudoun County are being pressed to defer support for Phase 2 of the Silver Line Metrorail project that is dependent for financing on Dulles Toll Road tolls. In both cases late protests are gaining some political traction, and testing the resolve of officials who want to follow through on projects as planned.

After a decade of studies, planning, permitting, competitive bids and negotiation the state of Virginia and Skanska/Macquarie (operating as Elizabeth River Crossings (ERC) signed the big concession contract - called a comprehensive agreement - December 5 2011.

In the case of the Norfolk tunnels state and most local officials plus the concessionaire  are hoping for a financial close as early as the end of this week. The financing includes a commitment by the concessionaire Skanska/Macquarie of $1.3 billion, nearly a third  of which comes from a federally guaranteed TIFIA loan of $422m, and a state commitment of $362m to support some $2.1 billion of construction which is devoted to modernizing and enhancing movement between downtown Norfolk and points west across the estuarial Elizabeth River, part of a major port and large US Navy base.

The holdup on the financial close for the Elizabeth River crossings appears to be USDOT and the TIFIA loan guarantees.

The crossings presently consist of the Midtown Tunnel one tube, 2x1 lanes, and Downtown Tunnel two tubes of two lanes each. ERC is committed to rehabbing the existing three tubes, building a second 2-lane tube at the Midtown crossing and constructing major improvements to the western approaches - including a new Martin Luther King expressway connection to the I-264 and two new interchanges. In return they get the right to collect tolls at the two tunnel crossings and on the MLK expressway starting later this year as work begins for 58 years.

Since the big contract was signed a considerable protest against it has developed:

- criticism of the toll-before-work-is-done, and moves to legislate against this in the state senate, and threats of a law suit

- criticism of the toll rates starting at $1.84 in peak hours with an annual increase of up to 3.5%

- criticism of the concessionaire's discretion

The McDonnell administration anticipated criticism of the toll rates and the state's $362m contribution is dedicated to allowing the toll rates to be lower than they otherwise would have been. And they negotiated an amendment to the comprehensive contract to allow the timing of tolls to be negotiated if the state compensates the concessionaire in line with forecast toll revenues foregone.

They could cite as precedent how Washington state has imposed tolls on the existing Route 520 Floating Bridge over Lake Washington before work starts on the replacement bridge the tolls are financing.

A prominent Republican from Suffolk house delegate Chris Jones wants the financial close deferred. He wants the MLK link and interchanges dropped from the project so tolls can be lower without busting the state budget in subsidies.

These johnnie-come-lately critics of the project said little about it in the planning and procurement stages. And you have to think they are trying to have it a bit both ways - not actually stopping the project by holding back until it was a done deal, then sounding off against it to be perceived by their constituents as fighting to keep tolls lower.

Governor McDonnell has said amending the big contract at this point would be extremely costly, and that all the components of the project re needed to allevuate congestion.

ERC has a contracted with Federal Signal Technologies to install toll systems at the two tunnels and on present plans they say the two all-electronic toll installations will be ready to begin to toll the Midtown and Downtown tunnels before the end of this year.  The exact date will be worked out with VDOT.

Northern Virginia - criticism of Dulles Rail toll financing grows

Meanwhile in northern Virginia the Metropolitan Washington Airports Authority's (MWAA) plan to finance Phase 2 of the Dulles Rail line largely with toll profits on the Dulles Toll Road faces growing skepticism.

Wilbur/CDM Smith forecasts for MWAA have shown enormous projected increases in toll rates that are being more widely publicized by opponents - including a doubling of the toll to $4.50 next year, tripling of the current toll to $6.75 by 2018 and $10.75 in 2028 (see graph.)

Democrats in the state general assembly have been calling for $300m in the next year's budget to mitigate Dulles Rail's dependence on toll financing. But the Governor and the Republicans in the general assembly's budget conference have ruled this out on the grounds it would blow out the state deficit. And they are apparently serious about withholding $150m previously committed because the MWAA is in breach of Virginia's right-to-work laws by providing preference for fully unionized contractors.

Smith forecasts of 30,000 vehicles diverted to local roads from the Dulles Toll Road by the higher tolls are also feeding hostility to the rail project.

But the project has momentum.

Phase 1 is heavily into construction and takes the rail line only half way down the tollroad corridor to Dulles Airport - an awkward end point to the project. And the railway has many passionate supporters who will support it virtually regardless of cost.

The Fairfax County Board of Supervisors meet this week to decide whether to endorse participation in Phase 2 of the rail project, and bets are they'll OK it. Economist Terry Maynard of the Reston Citizens Association has made a powerful case to the County to defer a decision on Phase 2 (attachment downloadable below.)

Loudoun County too has to decide in the coming months. They are less likely than Fairfax to support present plans.

Terry Maynard call for deferral of Phase 2 of Dulles Rail:

TOLLROADSnews 2012-04-09

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