Fluor Corporation and Transurban (USA) Inc. formally broke ground on the Capital Beltway HOT lane yesterday. Patrick Flaherty, head of Fluor’s infrastructure business, touted the project as a model for similar partnerships nationally. A press release from the P.R. firm for the project reminds readers of the benefits of the public-private partnership:
- Fourteen miles of HOT lanes – two new lanes in each direction – from the Springfield Interchange to just north of the Dulles Toll Road;
- Replacement of more than $250 million of aging infrastructure, including more than 50 bridges and overpasses;
- Upgrades to 11 key interchanges, including improved connections at I-66 and three new access points into the Tysons Corner area;
- Construction of more than 70,000 linear feet (13 miles) of new sound walls to replace current 30,000 feet of protection.
The ground-breaking appears to be stimulating closer public scrutiny than the project ever received when it was still being negotiated. Bacon’s Rebellion raised questions two weeks ago about covenants that would restrict the Virginia Department of Transportation from making improvements that might siphon toll payers away from the Beltway. (See “The Capital Beltway HOT Lane Deal: Did the Kaniacs Give Away the Store?“)
Then on Sunday, Eric Weiss with the Washington Post wrote an article focusing on financial penalties that would kick in if the percentage of carpoolers exceeded 24 percent of the traffic on the HOT lanes — a provision that could cost the Commonwealth $1 million a year.
Barbara Reese, deputy transportation secretary and a key negotiator on the deal, said the subsidy would kick in when the HOT lanes are at maximum capacity for more than 30 minutes. At that point, the state is liable for every 15 minutes that the HOT lanes are at maximum capacity for that day. Wrote Weiss: “She said the estimated $1 million-a-year liability exposure to the state seemed reasonable to state officials. She acknowledged, however, that the spike in carpooling and transit use could increase the state’s liability, but officials said they could not estimate by how much.”
Here are the higher-level questions: What performance standards are built into the contract? What levels of service must be maintained? Will the HOT lanes be optimized for providing mobility for the maximum number of people — or for generating the most toll revenue?
The project very well could become a model for the rest of the country, as Flaherty suggests. But we won’t know if it’s a model to be emulated or one to be avoided until we have more transparency regarding the deal that the state cut with the private operators.
I’m a big proponent of the private sector playing a larger role in building Virginia’s transportation infrastructure. But there is no inherent reason that VDOT couldn’t build the HOT lanes and administer them to optimize the public benefit. Indeed, the public may reject future public-private partnerships if fears persist that the deals are negotiated for the benefit of the private operators and/or the political class rather than for the benefit of the taxpayers and the public. The full contract needs to be made public.