Bacon's Rebellion

Democracy Thrives in Sunlight

Closing the Books on the U.S. 460 Fiasco

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by

James A. Bacon
in ,

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The state will recover $46 million from US 460 Mobility Partners for work never performed on a 55-mile highway between Petersburg and Suffolk, reports the Virginian-Pilot. Under the settlement negotiated with the McAuliffe administration, US 460 will keep about $210 million of the payments it received under former Governor Bob McDonnell but waive an additional $103 million it could have been owed under the contract.

The settlement allows both sides to avoid a lengthy court fight.  The payments were made under a $1.4 billion contract to build an Interstate-quality highway on U.S. 460 to improve transportation access to Hampton Roads. Construction never commenced because the state could not obtain necessary wetlands permits from the U.S. Corps of Army Engineers. The McAuliffe administration does not dispute that US 460 billed and received the money legally, but argues that the company did not spend all money it received while waiting for the permitting issues to be resolved.

The final tally: US 460 keeps $210 million, and the state eats about $43 million spent on its own work developing the project. The total cost for a road never built: $253 million. Transportation Secretary Aubrey Layne had guesstimated that the bungled project could cost the state $300 million to $400 million.

The settlement closes the books on one of biggest contracting fiascoes in recent Virginia history. Meanwhile, the Virginia Department of Transportation has developed a scaled-down plan to build a 12-mile highway between Suffolk and Windsor and make other improvements to U.S. 460. That plan is expected to cost in the realm of $400 million.

— JAB

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  1. LarrytheG Avatar
    LarrytheG

    At the same time – there are some major good things going on at VDOT these days.

    The situation in Charlottesville is interesting.

    Through a politically tumultuous process – it was decided to dump the bypass and essentially re-do US-29 in place.

    A familiar name is involved in that effort – Philip Shucet

    and Route 29 Solutions is not about building an interstate scale road through or around Charlottesville – any more – if it every was that to start with.

    Now – it’s improve in place – grade separated intersections and access management – … and …adaptive signal management.. i.e. real time detection of traffic conditions to drive signal operation.

    Over on I-95 at Fredericksburg – we’re going to get new I-95 bridges over the Rappahannock River and these new lanes with be not only CD lanes but HOT (capable) lanes.

    Up in Fairfax.. they’re talking about I-66 toll lanes…

    what else?

    1. DonR Avatar
      DonR

      Rt 29?

      What happened to the money VDOT plunked down 20 years ago for the rights of way to build the bypass? Does the Commonwealth get that money back or is this just another donation from the state treasury to random people?

  2. Peter Galuszka Avatar
    Peter Galuszka

    Oh well. Better than nothing I guess.

  3. JohnS Avatar
    JohnS

    My first instinct after reading this was “take these suckers to court to get as much of that 210 mill. back to the taxpayers”. But let’s be honest here: this contract was a joke, written entirely in favor of 460 Mobility without the most basic protections to ensure accountability and performance. I’ll defer to the attorneys on this board, but I doubt it could be argued that this was a case of breach of contract. Just bad governance/oversight with possibly a touch of corruption mixed in. In other words, the Virginia way.

    No surprise here that McAuliffe has decided to wipe his hands clean of this mess. After all, the individual most culpable for it is already headed to prison.

    1. DonR Avatar
      DonR

      Agreed. It’s hard to blame 460 Mobility Partners for the gross incompetence and culpable negligence of our state government.

      My guess is that the McAuliffe Administration settled because a court case would have resulted in a losing verdict and a public airing of the legal corruption which runs rampant through Richmond.

      1. LarrytheG Avatar
        LarrytheG

        Virginia was playing with the big boys but wearing their little boy panties

  4. LarrytheG Avatar
    LarrytheG

    If you want to see upset people – come to Fredericksburg and ask them what they think of the “foreign owned” HOT Lanes or how they handled the entrance/exit ramps from the mainline to the HOT lanes.

    They’d run not only VDOT but local elected out of town on a rail.

  5. John B Avatar
    John B

    There is another aspect to the 460 mess which is the COfE’s complete intransigence in re wetlands. They really need their wings clipped. The amount of wetlands “impacted” was to be/is a miniscule percent of the state’s total land mass let alone wetlands acreage.

    Just think how many public and private entities get their knickers in a knot over ANY new proposal for building something.

    The greenies (read Hollywood types and their ilk) are against everything.
    I suggest they downsize their mansions, trade down their Land Rovers, and buy some window fans. At least they aren’t still telling us how many sheets to use for #1 vs. #2 anymore.

    We are in or rapidly approaching a state of total paralysis…

  6. LarrytheG Avatar
    LarrytheG

    the wetlands issue is VDOT’s own creation . In NC and other states – the Corp is invited to the initial planning sessions and asked to participate.

    In Va.. COE is generally not involved until late in the process where VDOT has a reputation of trying to bull rush them on their final selection – that ACOE had no prior role in. ACOE takes a dim view of that and has availed themselves of administrative and policy opportunities to remind VDOT of their not appreciated behaviors.

    ACOE permits wetland destruction – routinely – when wetlands banks are used to mitigate. My understanding (which may not be bulletproof) is that there were a lot of wetlands involved and VDOT was not inclined to work through a process.. which resulted in ACOE returning the favor.

    There are more than a few roads built in Va. Show me a pattern of ACOE denying permits…

  7. John B Avatar
    John B

    LG, you read me too literally. I’m lumping COE, EPA, Greenpeace, PETA, Hollywood, et alia together. The dollar and time cost of doing anything is outrageous.

    My point is the paralysis in effect when there’s a proposal to do (read build) almost anything whether it be roads, transmission lines, pipelines, dams, wind farms, buildings, beach access that might “disturb” turtles or piping plovers, you name it, or whatever.

    1. LarrytheG Avatar
      LarrytheG

      I agree with you on the time delays but it’s not the groups you cite for 90+% of the projects.

      Most of the delays are due to the way that VDOT moves projects in general.

      The VDOT 6yr plan programming process is like a chinese laundry.

      it’s downright chaotic… you have a 6yr program with projects in it that have more than half – 3/4 of the project funding listed as – money in the out years beyond the 6.

      VDOT typically does programming sequentially – not concurrently – non-VDOT roads often get built well within a 6 yr timeframe.

      I invite you to go look at the 6yr plan. Go find a project near where you live and then look at the funding and programming profile.

      http://syip.virginiadot.org/Pages/allProjects.aspx

    2. James A. Bacon Avatar
      James A. Bacon

      This is true. The greenies all want more wind farms — but try building wind farms on a mountain ridge in Virginia. You can’t do it! Urban areas don’t want power plants anywhere near them, so utilities put them in the countryside — but no one wants transmission lines either! John B. is absolutely right. We’re living off the principle (infrastructure) bequeathed by our parents’ generation but can’t muster the will to add to it ourselves.

      1. LarrytheG Avatar
        LarrytheG

        ya’ll are calling folks who own homes with a view – “greenies” ?

        I guess I need to re-do my glossary..with respects to nimby.

        how did we get from highways to wind turbines?

        geeze

        what about Darrel’s question? did they extinguish the bonds also?

  8. Darrell Avatar
    Darrell

    So what about the $50 million that the state paid to investors in interest on project bonds? Did the bonds get canceled? Or is the state going to fish out even more interest payments for the life of the bonds? Where did the proceeds from the bonds go? Don’t be so quick to tune this story out.

    1. James A. Bacon Avatar
      James A. Bacon

      Darn good point. I guess the total cost is more like $300 million.

    2. Reed Fawell 3rd Avatar
      Reed Fawell 3rd

      Another question is who exactly pulled this debacle off?

      Was it the product of the Governor’s Transportation Secretary’s hard work? Was it another of his major accomplishments, his various gifts to the Commonwealth, the C’ville Bypass and long-haul truck roads through the Nation’s civil war battlefields that honor our dead heroes, plus this debacle too. Remember him, the recent Governor’s Transportation Secretary?

      The recently departed Governor did much good work. He did many honorable things as if only for honor’s and generosities sake.

      But his weakness for Roads and Rolex Watches resembles a stateside Woodrow Wilson, Lyndon Johnson, and Richard Nixon – their kind of public works done off the record in the dark of a cheap Hotel California.

  9. salz Avatar
    salz

    in answer to some of hte questions in this list of comments:

    Virginia was “represented” in the 460 negotiations by Allen and Overy, a New York and German law firm, which very proudly tells the world that it has twice been named law firm of the year by Infrastructure Investor magazine — a periodical for folks putting private money up to allegedly improve primarily transportation infrastructure. As Allen and Overy also very proudly tells the world, it gets great returns for that private money, it should have been obvious that they weren’t working for taxpayers. The Commonwealth, accoridng to the AG’s office, had zero lawyers looking after our interests in those negotiations.
    Besides Allen and Overy, two other “Virginia” parties were the former sec trans, Sean Connaughton, a nd Tony Kinn, the state’s first P3 director (public private partnerships) neither of whom had any expertise at all but both of whom believed that “private good-public bad” mantra while forgetting that the basis of our economic system is “let the buyer beware.”
    There should be, I submit, a criminal probe into this contract and there should be a public discussion of P3s in, at least, Virginia. Under Connaughton, Virginia let over $6 billion in 2012 P3s alone and we have 22 transportation P3s today. NONE of the toll roads makes the money that we taxpayers were promised in tolls and, therefore, we taxpayers are the ones paying back the bonds. At, I might add, exhorbitant rates. Capital Beltway Express in Northern Virginia promised investors a 13 percent return and the only analysis I could find of the things said that over 100 P3s the average bond return – tax free bond no less — was 14.9 percent. These are better than junk bond rates.
    We have been — and continue to be — screwed.

  10. Reed Fawell 3rd Avatar
    Reed Fawell 3rd

    Thank you, salz.

    That is quite interesting. Is not a public inquiry justified?

    I have often wondered why, given the vast sums of public monies in Virginia that have the appearance of perhaps having been flushed down the toilet, often into the private coffers of private individuals or corporations (with Arlington’s Million Dollar Bus being quite likely being the tip of and iceberg), why no one (zip, zero, nada, nobody) is ever held accountable, except for Rolex Watches.

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