the capital beltway and public-private partnerships - ppiaf · recently, virginia partnered with...
TRANSCRIPT
The Capital Beltway
And
Public-Private Partnerships
Prepared for:
The National Council for Public-Private Partnerships
By:
Matthew T. Brown Timothy P. Cronin
Saurabh Lall Joseph R. Lataille Margaret Sacks
December 2007
This "capstone" project was completed during the Fall 2007 semester in fulfillment of requirements
for the Master of Public Policy and Master of Public Administration degrees at the Trachtenberg
School of Public Policy and Public Administration, The George Washington University, under the
guidance of instructor Nancy Y. Augustine, PhD. Any reproductions of this product must be
approved by the authors.
ii
EXECUTIVE SUMMARY
At the request of the National Council for Public Private Partnerships (NCPPP), a
graduate level research team from The George Washington University Trachtenberg School of Public Policy and Public Administration conducted a study to evaluate the approaches Virginia and Maryland are taking to add capacity to their respective portions of the Capital Beltway (I-495).
The research team used several methods to conduct the investigation, including
reviewing applicable literature and interviewing over a dozen stakeholders, including past and current government leaders, transportation officials, legal experts, and various other stakeholders.
To achieve the objectives of the report, the team developed the following research
questions in consultation with NCPPP:
1. To what extent and how have Virginia and Fluor-Transurban satisfied NCPPP’s six criteria for a successful public-private partnership with their effort to add capacity to the Capital Beltway? What areas do they need to improve on, if any?
2. What are the key challenges and obstacles Maryland faces for building additional
highway lanes on their portion of the Capital Beltway? 3. If Maryland decides to pursue widening the Capital Beltway, do the conditions exist for
Maryland to use a public-private partnership to finance, build, maintain and operate the additional lanes? If not, what conditions need to exist for a public-private partnership to be a viable option in Maryland?
Highway congestion is a major problem, especially in large metropolitan areas such as
Washington, DC, and the enormous cost of implementing the necessary infrastructure improvements only exacerbate the problem further. Many state and local governments are unable to fund and complete in a timely manner their roadway and bridge projects. The growing gap between available funding and intensifying transportation demands requires alternative solutions for delivering new highway infrastructure and capacity. To confront the challenge, governments are increasingly straying from traditional methods of financing highway construction to somewhat controversial agreements with the private sector that involve toll collection, user fees, or the leasing of infrastructure.
As part of the Interstate Highway System, the Capital Beltway (I-495) is the busiest
corridor servicing commuters in the National Capital Region. Despite the various improvements implemented since opening to traffic in 1964, this major transportation route has exceeded capacity and is in need of significant upgrade and preservation. Given the extent of the demands and the existing financial constraints at all levels of government, it is likely that any sort of expansion to the Beltway will entail utilizing an innovative and efficient method of project delivery.
iii
Virginia and Maryland have been studying methods for improving mobility on the Beltway since the mid-1990s. Recently, Virginia partnered with Fluor-Transurban, Inc. to expand and preserve the existing highway and develop new High Occupancy Toll Lanes on a 14-mile segment of the Beltway. Under this partnership agreement, Virginia will retain ownership of the new lanes while Fluor-Transurban will design, build, maintain, operate, and finance the project over an 80-year concession period. For its part, Maryland has conducted extensive studies of its 42-miles of I-495 and is exploring similar lane management systems and the idea of partnering with the private sector. However, they continue to study the issue and have no firm plans for adding capacity to the Beltway.
While both jurisdictions share responsibility for this 64-mile stretch of roadway, each
faces unique challenges in adding capacity and coping with congestion. The research team decided it would be beneficial to examine the inter-workings of this agreement and predict its long-term success using NCPPP’s six criteria for a successful public-private partnership. Across the Potomac River, the team took an in-depth view of where Maryland stands on Beltway improvements and the challenges they face in building additional highway lanes. Since Maryland’s plans to improve its portion of the highway are still in development, the team examined whether or not the requisite conditions exist to duplicate Virginia’s PPP efforts.
In the end, the research team uncovered thirteen key findings:
Key Findings:
Research Question #1 1. Virginia’s partnership with Fluor-Transurban satisfies NCPPP’s six criteria for a
successful public-private partnership and we predict its success.
2. Since highway PPPs are still in their nascent stages of operation and no projects of this magnitude currently exist in Virginia, it is difficult to facilitate an equivalent comparison.
Research Question #2 3. Maryland’s highest transportation priority is system preservation.
4. Given the limited financial resources for current projects, expanding the Capital Beltway
is currently cost-prohibitive using traditional financing methods.
5. The potential environmental impacts of Beltway expansion and the resulting political opposition may create an contentious environmental approval process.
6. There is limited local support for expansion of the Capital Beltway in Maryland.
7. Montgomery County and Prince George’s County have other transportation priorities.
8. There is a lack of political consensus on how to move forward with expanding capacity on the Capital Beltway.
iv
Research Question #3 9. Maryland does not have adequate legislation to pursue public-private partnerships for
highway projects.
10. Maryland does not currently have a political champion for highway related public-private partnerships.
11. Maryland’s TP3 Guidelines prohibit unsolicited proposals for highway projects.
12. Maryland already has a tolling authority (MDTA) to help finance highway projects.
13. Local opposition to tolling will likely prevent Maryland from pursuing a PPP agreement for the Capital Beltway.
From these key findings emerged the following conclusions and recommendations:
Conclusion 1: Virginia has an extensive history of successful public-private partnerships that has enabled them to be a leader in this innovative method of constructing and financing highway projects. Conclusion 2: Maryland does not have the support necessary to widen the Capital Beltway. Conclusion 3: Maryland is not well-suited to enter into a public-partnership for highway projects. Recommendation 1: NCPPP should continue its educational activities across all sectors to enhance knowledge of public-private partnerships and their applicability to transportation projects, specifically the expansion of the Capital Beltway in Maryland.
Recommendation 2: NCPPP should continue its relationship with the Trachtenberg School of Public Policy and Public Administration at The George Washington University as a means of furthering research into topics relating to the Beltway and PPPs. Topics recommended for future research include:
• The politics of PPPs: Exploring the roles and positions of the executive and legislative branches in implementing PPP transportation projects
• PPPs and the Maryland General Assembly
• Issues and options pertaining to a comprehensive approach to regional congestion management (e.g. highway expansion, smart growth, transit options, etc.).
v
TABLE OF CONTENTS
Section Page
EXECUTIVE SUMMARY...................................................................................... iii TABLE OF CONTENTS ....................................................................................... vi LIST OF FIGURES................................................................................................ vii INTRODUCTION....................................................................................................1 Issue Summary and Importance ....................................................................1 Purpose and Objectives................................................................................. 3 The National Council for Public Private Partnerships................................. 3 Report Overview............................................................................................ 4 RESEARCH METHODS AND CHALLENGES................................................... 5 Research Questions....................................................................................... 5 Research Design ........................................................................................... 6 Research Challenges ..................................................................................... 7 CONTEXTUAL FRAMEWORK............................................................................. 9 Public-Private Partnerships........................................................................... 9 Virginia Transportation Overview ...............................................................13 Maryland Transportation Overview.............................................................18 The Capital Beltway.....................................................................................20 Public-Private Partnerships and the Capital Beltway..................................25 KEY FINDINGS .....................................................................................................30 Research Question 1.....................................................................................30 Research Question 2 ....................................................................................36 Research Question 3 ....................................................................................41 CONCLUSIONS AND RECOMMENDATIONS ................................................46 Conclusions ..................................................................................................46 Recommendations .......................................................................................47 ENDNOTES ...........................................................................................................48 APPENDICES.........................................................................................................51 Appendix A: Statement of Work................................................................. 51 Appendix B: NCPPP Criteria for Success...................................................54 Appendix C: HOT Lanes In-Principle Agreement Capital Beltway..........55 Appendix D: Maryland General Assembly Survey......................................57 Appendix E: Oberstar-DeFazio Letter........................................................61 Appendix F: References ..............................................................................64
vi
List of Figures
Figure Page
Figure 1: The Spectrum of Public-Private Partnerships...................................................10 Figure 2: Humor and Transportation PPPs………………………………………………12 Figure 3: VDOT Status of PPTA Design-Build Projects………………………………...18 Figure 4: The Capital Beltway and Surrounding Area…………………………………...21 Figure 5: The Capital Beltway in 1964…………………………………………………….22 Figure 6: Beltway Traffic at the I-270 Spur in Maryland…………………………………23
Figure 7: Virginia HOT Lanes Proposal………………………………………………….26 Figure 8: Accessing Capital Beltway HOT Lanes………………………………………..27 Figure 9: Virginia Beltway Improvements Project Timeline…………………………….27 Figure 10: Diagrams of SHA Alternative for Further Study…………………..………….29
vii
INTRODUCTION
At the request of the National Council for Public Private Partnerships (NCPPP), we
conducted a study to evaluate the approaches Virginia and Maryland are taking to relieve congestion
on their respective portions of the Capital Beltway (I-495). The research team was comprised of five
graduate students enrolled in an upper-level level capstone class at The George Washington
University Trachtenberg School of Public Policy and Public Administration. NCPPP Executive
Director Richard Norment and Vice President for Education Parker Williams assisted us in
narrowing the scope of the topic and Dr. Nancy Augustine of The George Washington Institute of
Public Policy served as the research team’s supervisor and class instructor.
This section provides a brief summary of the issue, highlights its importance, and outlines
the project’s purpose & objectives. It will also include a description of the client and a brief
overview of the report.
Issue Summary and Importance
Highway congestion is a major problem, especially in large metropolitan areas such as
Washington, DC. The Texas Transportation Institute estimates that congestion alone costs
Americans $78 billion per year. Commensurate with this economic impact is the cost of
implementing the necessary infrastructure improvements to cope with a growing “transportation
crisis.” Despite a long awaited increase in federal funding, due in part to the enactment of the Safe,
Accountable Efficient, Transportation Equity Act – A Legacy for Users (SAFETEA-LU), the nation
continues to fall short of the resources necessary for making highway transportation improvements
proportional to the demands imposed by aging infrastructure and a growing population.1 Many state
and local governments, desperate to improve the situation, are feeling the pressures associated with
an inability to fund and complete in a timely manner their roadway and bridge projects.
Funding for transportation is steady but it is not increasing. Revenue from fuel taxes, the
main source of highway project funding, has leveled off and has not kept pace with highway
program needs, while vehicle miles traveled continues to increase. A 2005 study by the U.S.
Chamber of Commerce estimates a $23 billion annual shortfall in funding to maintain the nation’s
current highway system. Furthermore, an additional $48 billion in annual funding is required to
facilitate improvements essential to meeting the demands of national transit. Most governments at
all levels have come within an arms length of their debt capacity to fund transportation initiatives.
1
Ongoing projects and roadway life-cycle preservation are consuming a majority of federal, state, and
local government resources. This growing gap between available funding and the intensifying
transportation problem requires alternative solutions for delivering new highway infrastructure.
In order to enact change, governments and elected officials are confronting the option of
straying from traditional methods of financing highway construction. While forecasted demands on
transportation infrastructure outpace available resources indefinitely, state and local governments
need an apparatus that will enable them to expedite project delivery and utilize creative financing
mechanisms. Many current and proposed enhancements will require the collection of tolls and user
fees, especially for those projects that involve concession agreements between the public and private
sector.1 Agreements that involve leasing infrastructure to the private sector are new and somewhat
controversial. However, many case studies conclude that these innovative approaches are successful
in ameliorating fiscal pressures on the government. They also provide alternatives to levying new
taxes and accelerate the delivery of highway projects.
As part of the Interstate Highway System, the Capital Beltway (I-495) is the busiest corridor
that services commuters in the National Capital Region and is regarded as the second most
congested roadway in the country. Despite the various improvements implemented since opening
to traffic in 1964, this major transportation route has reached capacity and is in need of significant
preservation and upgrade. Based on the growing needs of the region, experts anticipate commuter
times will double by 2020. Researchers at George Mason University estimate that this will cost the
local economy $5.5 billion per year, including delays, excess fuel, lost productivity, recruiting
challenges, and added costs for shipments and deliveries. Given the extent of these demands and
the existing financial constraints at all levels of government, it is likely that any sort of expansion to
the Beltway will need to have an innovative and efficient method of project delivery.
Virginia and Maryland have been studying methods for improving mobility on the Beltway
since the mid-1990’s. Recently, Virginia partnered with Fluor-Transurban, Inc. to preserve and
expand the existing highway and develop new High Occupancy Toll (HOT) Lanes on a 14-mile
segment of the Beltway. Under this partnership agreement, Virginia will retain ownership of the
new lanes while Fluor-Transurban will design, build, maintain, operate, and finance the project over
a 75-year concession period. Maryland has conducted extensive studies of its 42-miles of I-495,
1 A concession agreement is the grant of land or property by the government in return for services or use. Concession agreements between governments and the private sector for transportation infrastructure are normally part of a public-private partnership.
2
which include similar congestion tolling options and partnering with the private sector. However,
they continue to study the issue and have no firm plans to add capacity to the Beltway.
Purpose and Objectives
The purpose of this study is to inform the National Council for Public-Private Partnerships
on how Virginia and Maryland are moving forward with their efforts to add capacity to the Capital
Beltway and to what extent Virginia’s public-private partnership with Fluor-Transurban to
reconstruct its portion will be successful. While both jurisdictions share responsibility for this 64-
mile stretch of roadway that encircles the National Capital Region, each face unique challenges in
coping with congestion, development, expansion, and preservation.
To accomplish the intended purpose, the research team set the following objectives:
• Examine the Problem. Research the effect of congestion on the Capital Beltway and each
state’s respective response to the issue by: 1) studying the methods, structures, and dynamics
of how each state administers, governs, and finances transportation projects and 2)
determining the steps each state has taken and what challenges lay ahead.
• Frame the Issue. Provide an issue statement and relevant research questions that the team
will answer to the client by putting into context the numerous variables that affect how each
state has approached the problem, including legislative histories, current laws, financial
positions, available funding mechanisms, government structure, and pubic sentiment.
• Collect Data. Gather information using traditional research methods, including accessing
publicly available information, conducting a literature review, performing interviews, and
conducting a survey.
• Present Findings. Present requisite key findings and recommendations in a final report
and formal presentation to the client.
The National Council for Public-Private Partnerships
The NCPPP is an organization that advocates and facilitates the formulation of public-
private partnerships within all levels of government. Their mission is to educate and raise awareness
of these partnerships to stakeholders and provide a picture of how private entities can perform
public services in a more cost-effective fashion while providing quality service. NCPPP charters an
advisory council made up of membership from both the public and private sectors. These members
3
are interested in a wide range of areas in which public-private partnerships could provide beneficial
services.
Report Overview
The report begins by providing a contextual framework for the issue under study. Included
in this section is an overview of public-private partnerships, their application in Virginia and
Maryland, trends in transportation and administration, as well as a description of the Capital Beltway
and the looming congestion problem. We will then provide a description of how we framed the
issue and defined the problem. Following this explanation, we will elaborate on the research
methods and data collections procedures as well as disclose the challenges faced during the project.
The “Key Findings” section of the report will provide a detailed analysis of what we discovered
during our research concerning the efforts to add capacity to the Capital Beltway and the use of
public-private partnerships to do so. Data collection instruments and other supporting documents
are included in the appendices.
4
RESEARCH METHODS AND CHALLENGES
The research team used a variety of methods to investigate the various approaches for
adding capacity to the Capital Beltway and the use of PPP agreements for delivering new highway
infrastructure in both Virginia and Maryland. The research team reviewed applicable literature and
interviewed over a dozen stakeholders, including past and current government leaders,
transportation officials, legal experts, and various other stakeholders.
This section outlines the three research questions the team set out to answer during the
project. It also provides a description of research methods the process the team used to collect
relevant data that ultimately led to the substance and conclusion of this report, and the challenges
faced in carrying out its task.
Research Questions
The research team worked with the NCPPP staff to design questions that address the
purpose and objective of the project. Although traffic congestion challenges for the Capital Beltway
pollinate across the Virginia/Maryland line of demarcation, the management of this issue and
administration of respective state highway programs are vastly different. When this project began,
negotiations on the final terms of a $1.7 billion, 80-year public-private partnership with Fluor-
Transurban were nearing completion in Virginia.2 Differing from historically successful PPP efforts,
this new partnership represents Virginia’s most comprehensive and in-depth PPP agreement to-date.
The project includes plans for Fluor-Transurban to design, construct, operate and maintain the
Capital Beltway HOT lanes. The research team decided it would be beneficial to examine the inter-
workings of this agreement and predict its long-term success using the NCPPP’s six criteria for a
successful public-private partnership.2 Across the Potomac River, the team took an in-depth view of
where Maryland stands on Beltway improvements and the challenges they face in building additional
highway lanes. Since Maryland’s plans to improve its portion of the highway are still in the
formative stages of development and specific intentions have not yet been declared, the team
examined whether or not the requisite conditions exist to duplicate Virginia’s PPP efforts. This
report addresses the following research questions:
2 The 80-year agreement refers to 5 years of construction followed by 75 years of concession in which Fluor-Transurban will operate and provide life-cycle maintenance.
5
1. To what extent and how have Virginia and Fluor-Transurban satisfied NCPPP’s six criteria
for a successful public-private partnership with their effort to add capacity to the Capital
Beltway? What areas do they need to improve on, if any?
2. What are the key challenges and obstacles Maryland faces for building additional highway
lanes on their portion of the Capital Beltway?
3. If Maryland decides to pursue widening the Capital Beltway, do the conditions exist for
Maryland to use a public-private partnership to finance, build, maintain and operate the
additional lanes? If not, what conditions need to exist for a public-private partnership to be
a viable option in Maryland?
Research Design
In order to collect the relevant data needed to answer the research questions, the team
undertook a literature review, a series of interviews, and a survey.
Literature Review
The research team collected various reports, publications, business documents,
communications, presentations, and white papers during the course of the project. The literature
review allowed the team to compile a majority of the background information found in this report,
providing an essential foundation needed to frame interview questions that address gaps and delve
deeper into issues that necessitated further exploration. A comprehensive list of references is
included in Appendix G.
Interviews
As a primary source of research, the team conducted interviews through person-to-person
meetings, phone calls, and emails. Several high-ranking current and former state transportation
officials as well as representatives from the Federal Highway Administration, Fluor-Transurban, and
legal experts provided valuable insight. Additionally, our outreach expanded to various
administrators in local government, representatives from organized labor groups, and academicians
who research and study transportation and urban planning. The interviewees were credible sources
6
that had a working knowledge about transportation funding and public-private partnerships. These
people were also able to address the prospects of moving forward with such arrangements.
The research team traveled locally to meet with the interviewees located in the VA/MD/DC
metropolitan area. The interviews lasted from one to three hours. Due to the diversity of audience
experience and opinion, each interview took on a slightly different tone and accordingly, the team
tailored questions to capitalize on the interviewees’ area of responsibility and expertise. To protect
the confidentiality of the interviewees and avoid undue scrutiny of public officials, this report does
not disclose the names or positions of individuals who unselfishly provided many valuable hours
that assisted us in our efforts. In addition, this report does not link interviewees’ positions or
responses to specific thoughts or statements by the researchers.
Survey
The research team conducted a survey of Maryland State Legislators to capture the policy
and political aspects surrounding their experiences and positions on transportation infrastructure
and financing mechanisms. The internet site “Survey Monkey” was used to design and distribute the
survey and collect responses.3 The survey, designed to take no more than five minutes, consisted of
11 questions and a section that allowed the respondent to elaborate further or expound on a topic
not captured in the survey. The team designed the survey to connect the political atmosphere
surrounding the elected officials with how the state delivers transportation infrastructure. Several
questions specifically measured how legislators value the private sector and the use of public-private
partnerships. The team distributed the survey to all 186 Maryland elected Senators and Delegates
via email. Unfortunately, the response rate was not ample enough to acquire meaningful results as
only seven officials took the survey. While there are probably several reasons for not responding,
the survey did come at the same time the General Assembly was in a special three-week session. A
copy of the survey is included in Appendix D.
Research Challenges
There are a number of important limitations to the research undertaken for this project.
Understanding these limitations is vital to understanding the applicability of the research findings.
First, it would be a disservice to the reader if this section failed to mention the time constraints
3 Survey Monkey: www.surveymonkey.com.
7
involved. Graduate level capstone groups at the George Washington University are assembled in
the beginning of a semester at which time a topic and client is assigned. The first few weeks were
used to meet with the client, explore the appropriate focus of the project, and arrive at a consensus
on scope, purpose, and objectives. Given these preliminary requirements, the team dedicated the
remaining two months of the academic semester to research, analysis, and the composition of the
final report.
Although a majority of the methods proved successful, some limitations were beyond the
team’s immediate control. Distribution of the survey to Maryland General Assembly during a
special legislative session most certainly affected the response rate. The team received some
feedback from two of the delegates who said they were too busy to take the survey. Due to the
limited number of respondents, the team was unable to attain meaningful results from this method.
During the course of the project, Virginia was fully engaged in negotiations with Fluor-
Transurban on the final economic model of the 75-year concession agreement to operate the
improved portion of the Capital Beltway. Although representatives from all three parties were
responsive to the team, they could not produce a finished product that would have provided us with
the final revenue and risk sharing information.
8
CONTEXTUAL FRAMEWORK Public-Private Partnerships
Definition and Use
Contracting work to private companies to deliver what are traditionally considered public
goods and services has a long history in the United States. As state and local governments struggle
to address growing public infrastructure needs with a scarcity of funds, they are turning to the
private sector for an investment of non-traditional resources. The public-private partnership (PPP),
a concept now becoming increasingly popular in the United States, is essentially a contractual
arrangement under which the private sector carries out some or all of a function that was
traditionally the responsibility of the public sector.3
Transportation in the United States has a history of private sector involvement dating back
to the beginning of road construction and operation in the country. In fact, there were more than
2,000 private toll roads in operation in the 19th Century. Over time, as federal and state financing of
road construction increased, private sector involvement in the construction and operation of roads
declined. However, as state and federal highway funding has become more constrained and the
demand for efficient transportation infrastructure has increased, governments are now turning to the
private sector to provide more services.
Traditionally, private sector participation has been limited to separate planning, design, or
construction contracts on a fee for service basis, based on government specifications, an approach
that does not fully utilize the private sector’s innovation and expertise. The public-private
partnership approach allows public agencies to benefit from the technical, management and financial
resources of the private sector, while maintaining control of assets.
As defined by the U.S. Department of Transportation, PPPs are “contractual agreements
formed between a public agency and private sector entity that allow for greater private sector
participation in the delivery of transportation projects.”4 While maintaining oversight, PPPs allow
states to direct responsibility (and funding) of transportation projects to private entities, allowing the
states to leverage the firm’s expertise and place the cost onto the private industry.
The private firm is entitled to keep revenue collected from the use of the road (in Virginia,
tolls paid by drivers is the most typical financing method for the private sector to recoup its cost
expenditures). One other method of revenue collection is a special tax district, the chosen financing
method for the construction of Route 28 corridor improvements in Loudoun and Fairfax counties.
9
Numerous states are currently using PPP approaches for large transportation projects in
excess of $50 million. The roles of the public and private sectors in PPPs can vary depending upon
the goals of each sector, the type of facility involved, the structure of the financial arrangement, and
the limits of the state’s enabling legislation. Two common types of PPP relationships relevant to the
Capital Beltway are:
• Design-Build (DB): Under this option, the private partner designs and builds a facility to
specifications agreed to by a public agency within an agreed upon timeframe and at a pre-
determined price. FHWA-funded DB projects that include construction of highways of $50
million or more and those that include Intelligent Transportation Systems (ITS) of $5 million
or more are subject to FHWA DB guidelines. DB projects do not require private financing.
• Design-Build-Operate-Finance (DBOF): The state transfers responsibility for designing,
building, financing and operating the roadway to private sector partners. There is a great
deal of variety in DBFO arrangements in the United States, especially the degree to which
financial responsibilities are transferred to the private sector. One commonality that cuts
across all DBFO projects is that at least some financing is through debt leveraging revenue
streams dedicated to the project. Direct user fees (tolls) are the most common revenue
source. However, other sources range from lease payments to shadow tolls and vehicle
registration fees. Future revenues are leveraged to issue bonds or other debt that provide
funds for capital and project development costs. Public sector grants frequently supplement
them in the form of money or contributions in-kind, such as right-of-way. In certain cases,
private partners may be required to make equity investments as well.
Figure 1: The Spectrum of Public-Private Partnerships
Public Private
Design -
Build
Design-Build-Finance-Operate
Design -
Bid-
Private
Contract
Fee
Services
Build –
Operate
Transfer
Long Term
Lease
Build-
Own-
Operate Build
Source: FHWA PPP website www.fhwa.dot.gov/ppp/
10
Revenue Streams and Public-Private Partnerships
For public-private partnerships to be successful there needs to be a dedicated income
stream. The most common type of revenue stream for highway projects is tolling. Virginia and
Fluor-Transurban have agreed on High Occupancy Toll Lanes to be their primary source of
revenue. Maryland has made plans to implement Express Toll Lanes (ETL) in certain parts of the
state and has suggested using them on the Capital Beltway. A brief description of each system is
provided below.
High Occupancy Toll Lanes. High Occupancy Toll lanes allow single-occupancy vehicles
to use High Occupancy Vehicle (HOV) lanes for a user fee. The purpose of HOT lanes is to
guarantee free flowing traffic conditions for those willing to pay for the luxury. HOT lanes expand
travel options and help maintain traffic flow on existing general-purpose highways by operating
alongside the existing general purpose lanes. To ensure safety, HOT lanes are separated from the
general lanes and have their own entry and exit points and drivers do not have to merge into the
general purpose lanes to reach their exit ramps.
HOT Lanes can differ in their access and user charges. For example, in some instances high
occupancy vehicles cars are free to use HOT lanes while elsewhere HOV users have to pay. In
other available pricing structures, operators may prohibit or charge a higher fee for single occupancy
vehicles (SOV) or have variable toll levels depending on the level of HOV (HOV-2, HOV-3). In
general, buses and emergency vehicles use the lanes free of charge.
Tolls in managed lanes can be fixed or vary with congestion levels. In a majority of the
HOT lane projects in the U.S., the states use variable (or congestion) pricing to determine cost to
the user. Variable tolling involves the use of advanced technology to continuously monitor traffic
volume and speed in all lanes and automatically adjust tolls as a way to achieve targeted volume and
speed levels. Drivers operating in these managed lanes use a transponder similar to the EZ Pass
system to pay the tolls. A special function of these transponders allows the user to switch to the
HOV mode and avoid user fees while operating in the HOT lanes.
Express Toll Lanes (ETLs). Express Toll Lanes are also a form of managed lanes,
frequently referred to as variable, or “value” pricing. These lanes require all motorists, regardless of
vehicle occupancy level, to pay a fee. Toll rates vary based on demand depending on the time of day
or current traffic conditions and are collected electronically at full highway speeds. The major
11
difference between ETLs and HOT lanes is that ETLs do not allow free or discounted passage of
HOV vehicles regardless of occupancy, however they will still be available to mass transit at no
charge.
HOT Lanes and ETLs. The U.S. has seen many successful examples of managed highway
lanes in use. Examples include California’s S.R. 91 and Minnesota’s I-394. The lanes have delivered
promising results with commuter timesavings, on-schedule bus service, and high levels of customer
satisfaction. The S.R.91 HOT lanes experiment is four lanes stretching ten miles in Orange County.
Tolls are variable based on the time of day; a ride can cost up to $20 per ten miles. California's
S.R.91 Express Lanes facility was the first privately financed toll road in the United States in more
that 50 years, the world's first fully automated toll facility, and the first application of value pricing in
America.5 While expensive, Orange County, California, found that HOT lanes increased carpooling
by 9.6 percent and saved drivers over 40 minutes of commute time. During a 2006 annual survey,
California drivers reported an 85 percent satisfaction rate with these lanes.6
Figure 2: Humor and Transportation PPPs Minnesota has also had success with
its HOT lanes on I-394 in the Minneapolis
area. Upon recognizing underutilization of
the existing HOV lanes, the state legislature
moved to designate them as HOT lanes.
During peak hours, the lanes function as
HOT lanes but at other times are open for
general use. In terms of cost, single
occupancy vehicles pay the toll (the maximum
per trip is $18) while the lanes remain free for
HOV riders. Thus far, Minnesotans have
responded favorably to the I-394 experiment
and the legislature is currently looking at new
HOT lane ventures in other venues
throughout the state.7
12
Source: Time Magazine, Joshua Lutz Thursday October 18, 2007
Virginia Transportation Overview
The Virginia Department of Transportation
The Virginia Department of Transportation (VDOT) is responsible for maintaining the third
largest highway system in the country with more than 70,000 miles of roads. VDOT is in the
process of streamlining its workforce to create an organization that serves in advisory, oversight, and
management roles instead of an active public works provider. Currently, VDOT outsources 58
percent of its interstate maintenance. By 2009, the private sector will maintain all interstates in
Virginia.8 This trend towards transportation maintenance by the private sector with VDOT
oversight demonstrates VDOT’s efforts to concentrate its limited finances on funding and executing
transportation projects and maintenance and less on overhead.
Virginia’s Transportation Financing
The Commonwealth Transportation Board (CTB) is the government entity that guides
policies for Virginia's transportation system and allocates funding for specific projects in the nine
transportation-planning districts throughout the Commonwealth. Virginia annually updates its Six-
Year Improvement Program (SYIP) and the most recent plan reflects statewide transportation
activity of nearly $11 billion for 2008-2013. When considering the allocation of transportation
funds, the CTB’s first obligation is to highway maintenance. For the 2008-2013 plan, the majority of
highway funding is already committed to maintenance or advancing existing projects including
$187.6 million for maintenance and $410.2 million in highway construction in Northern Virginia,
leaving limited resources for new transportation projects not already included in the SYIP.
Virginia derives its transportation highway funds from a combination of state, federal, and
local revenues. The state primarily receives revenues from the following sources:
• Motor fuel tax (17.5 cents per gallon) • Vehicle sales tax (three percent) • A portion of the vehicle license fees ($39.50) • General sales and use taxes (0.5 percent) • Federal funds (18.4 cents motor fuel tax and other sources)9
Virginia’s primary transportation revenue source, the motor fuel tax, is not indexed to
inflation, resulting in a reduced purchasing power of the revenues collected from this tax. The 17.5-
cent tax per gallon has not changed since 1986 and currently ranks as the 41st lowest in the country.
Despite past legislative attempts, there is no evidence of political will by the General Assembly to
13
increase the gas tax. In contrast, Maryland’s motor fuel tax rate is 23.5 cents and the national
average is 18.3 cents.10
VDOT deposits these taxes and fees into two funds: the Highway Maintenance and
Operating Fund (HMOF) and the Transportation Trust Fund (TTF). Virginia dedicates HMOF
revenues for the operation and maintenance of the roads. TTF revenues finance the construction of
new transportation infrastructure and are allocated according to the following formula: highways
(78.7 percent), mass transit (14.7 percent), ports (4.2 percent), and airports (2.4 percent). As directed
by Section 33.1-23.1 of the Virginia Code, the state must allocate these funds in the following order
of priorities: 1) maintenance, 2) payments to localities, 3) administration and operations, and 4)
highway construction. During periods of economic recession, the General Assembly has used TTF
funds for other state obligations, depleting the revenues available for new construction. The 2005-
2006 VDOT budget was $3.8 billion and the allocation break down was 37 percent for roadway
maintenance, 34 percent debt service and administration, and 29 percent for new construction of
projects already listed in the SYIP priority list.11
Due to the high costs of construction and maintenance, the state quickly expends funds,
especially considering that each highway mile costs approximately $1 million to construct.12
Escalating costs often result in project backlogs or removal of projects altogether as VDOT
prioritizes the use of its limited funds. Even with new funding made available in the 2007
transportation bill, Virginia (as with many other states) does not have sufficient funds to address all
of its transportation infrastructure needs.
Historically, the HMOF has been solvent enough to address infrastructure maintenance and
finance some construction. However, since the early 1990s the state has been unable to keep pace
with maintenance costs (increasing $50 million each year) due in part to a decrease in the purchasing
power of transportation revenues resulting from inflation.13 Simultaneously, the number of licensed
drivers has increased 34 percent and commuters have traveled 79 percent more vehicle miles.
Furthermore, the number of registered vehicles has grown 53 percent while new lane miles have
only increased seven percent.14 A 2004 review of capacity requirements identified a $108 billion gap
between funding and transportation needs over the next 20 years.
Looking to the future, VDOT has forecasted a one percent annual growth in gasoline tax
receipts and owing in part to unpredictable congressional activity excluded any increases in revenue
from the federal highway trust fund beyond 2009. 15 TRIP, a transportation research group, predicts
that by 2014, state highway funds will be insufficient to match federal highway funds, reducing the
14
overall amount of available funds and requiring Virginia to use all state construction funds for
maintenance. By 2019, the state will have to use federal highway funds for maintenance as well,
further decreasing the funds available for construction purposes.16
2007 General Assembly- The Transportation Session
During the 2007 General Assembly session, legislators approved a 41 percent increase in
transportation funding over the next six years. This movement was the first transportation-spending
plan in 21 years that significantly increased funding.17 Secretary Pierce Homer remarked, "This
program will maintain the timeline for existing projects. In absence of this funding, existing projects
would be delayed or eliminated entirely."18 Despite the additional infusion of monies for
transportation, the state has not added any new construction to the six-year plan due to the backlog
of existing new construction demands. Additionally, public criticism may force the General
Assembly to modify or repeal some of the funding schemes adopted by the General Assembly to
secure this new revenue.
As of January 2007, the state faced a $450 million deficit in maintenance funds. The
transportation compromise package reduced the deficit, but some believe that the state cannot
sustain the reduction. Senator John S. Edwards (D-Roanoke) remarked, "It is pretty clear this is a
short-term, stopgap measure and we will back in a few years to work on a long-term fix.”19
Public-Private Partnerships: Virginia’s Enabling Legislation
In 1988, the General Assembly approved legislation to allow private companies to build and
operate for-profit toll roads on Virginia’s interstate system.20 Construction on such a project, the
Dulles Greenway, began in 1989 and completed in 1995. The State Corporation Commission sets
the Greenway toll rates to allow for a reasonable rate of return for the investors. The same year the
Greenway opened, the General Assembly passed the Public Private Transportation Act (PPTA), a
comprehensive update and overhaul of the original PPP legislation.
The PPTA is the legislative framework enabling VDOT to enter into agreements with the
private sector to “construct, improve, maintain, and/or operate qualifying transportation facilities.”21
The legislative guidelines state that a six-phase evaluation process must review any solicited or
unsolicited proposals: 22
15
1. Quality Control - Does the proposal meet the needs of the local, regional or state
transportation plans in a timely manner with greater efficiency and less cost than the public
sector? Does the private sector demonstrate risk-sharing and/or cost responsibility?
2. Independent Review Panel (IRP) - Members of the CTB, VDOT representatives,
transportation officials, and knowledgeable members of the academic community evaluate
the proposal based on an explicit set of evaluation and selection criteria. The IRP
recommends whether any of the proposals should advance to the detailed proposal stage.
The IRP phase includes opportunities for comments from the public and affected localities.
3. CTB Recommendation - The CTB reviews the IRP endorsed conceptual proposals and
makes a recommendation to VDOT whether to advance any of the proposals to the detailed
phase and further evaluation.
4. Submission and Selection of Detailed Proposals - A VDOT review committee evaluates the
recommendations and may request that none (no build option), one, or more private sector
firms submit detailed proposals and enter into competitive negotiations.
5. Negotiations - The public and private sectors negotiate an interim and/or comprehensive
agreement that details the rights and obligations of the parties, set a maximum rate of return
to the private sector, determine liability, and set dates for transfer of the facility from the
private sector back to the Commonwealth.
6. Interim and/or Comprehensive Agreement- After negotiations and the state selects the
preferred private firm, both parties sign an interim agreement. The interim agreement
provides legal notice to proceed with traffic and revenue studies, project submission for the
National Environmental Protection Act (NEPA) Evaluation, and solicit public comments.
After the steps are complete and negotiations finalized, a comprehensive agreement is
finalized and the Record of Decision (ROD) is issued.
The PPTA implementation guidelines seek to “encourage investment in the Commonwealth
by private entities by creating a more stable investment climate and increasing implementation
guidelines promote competition to create multimodal and inter-modal solutions; increase flexibility
in the development of interim agreements to accelerate required activities; and required greater
commitments or guarantees by proposers with mandatory risk sharing.” 23 Furthering these
implementation guidelines and promoting PPPs, the 2005 amended PPTA legislation does the
following:
16
• Authorizes private entities to construct and/or operate qualifying transportation facilities
• Provides for solicited and unsolicited proposals.4
• Establishes an interim agreement to provide for partial planning and development
activities while other aspects of a qualifying transportation project are being negotiated
and analyzed.
• Requires concession payments be used on transportation benefits for facility users.
In his May 2006 testimony before the U.S. House of Representatives Committee on
Transportation and Infrastructure, Sub-Committee on Highways, Transit and Pipelines, Virginia
Governor Tim Kaine outlined five guiding policies that the Commonwealth uses when considering
public-private partnerships:
• PPPs are not free and someone has to pay for the new infrastructure.
• Private financing should ensure a timelier delivery of the project at a lower cost or with
greater efficiency than the public sector.
• A PPP project must address a true, public need.
• Benefits of the project should accrue to those paying for the project (toll-payers,
taxpayers, or risk-takers). This policy is state law that any revenue raised in the corridor
must be spent on transportation projects (including transit) in the same corridor.
• Open, public transparency.
To date, Virginia has completed four highway public-private partnerships (See Figure 3 for a
list of completed and active PPTA projects). Of those projects, the Greenway has operating terms
that predate the PPTA (the Greenway is a privately owned road, not a leased facility). Despite the
initial and promising success of PPPs as a source for supplying additional highway capacity,
transportation needs still outstrip the purpose of public-private partnerships. For a PPP to be
successful in Virginia, the forecasting of vehicle use and project revenue must be sufficient to attract
private sector investment. That is not the case for all transportation needs. Many projects still
4 The unsolicited proposal is one of the central features of Virginia’s PPTA legislation that allows the private sector to invest their own capital, engineering experience, and other resources to develop an innovative, cost-conscious way to meet transportation needs.
17
require traditional state funding especially in rural areas where the use of the roadways is not at
critical mass to warrant private sector tolling. Public-private partnerships are not a cure-all, but
under the appropriate conditions, PPPs can provide additional highway lanes that otherwise would
not be built.
Ma
Mar
stat
futu
(MD
and
exce
faci
Figure 3: VDOT Status of PPTA and Design-Build Program
ryland Transportation Overview
yland Highways
Maryland’s roadways are among the most congested in the country. Since 1990, demand on
e highways has grown by 22 percent with the trend expected to continue for the foreseeable
re, escalating system deterioration and accelerating the need for system improvements.
The Maryland State Highway Administration (SHA), the Maryland Transportation Authority
TA), and local governments own and operate highways in the state of Maryland. SHA operates
maintains 5,130 miles of roadways including all major U.S. and state highways with the
ption of roads inside the city of Baltimore. The MDTA owns, operates, and maintains all toll
lities in the state, including the Kennedy Memorial Highway, I-395 in Baltimore, the Francis
18
Scott Key Bridge, the Harbor Tunnel Thruway, the Thomas Hatem Bridge, the Harry W. Nice
Memorial Bridge, and the William Preston Lane Memorial Bridge. State law empowers the MDTA
to establish all tolls in the State.
The Maryland Department of Transportation (MDOT) encompasses all travel modes—
highway, transit, rail freight, airports, and seaports—and the Secretary of Transportation also serves
as Chairman of MDTA. In terms of funding, all federal and state transportation funding enters a
single consolidated Transportation Trust Fund (TTF) and MDTA has the ability to issue bonds
secured by its own toll revenues (not by the TTF).
Public-Private Partnerships in Maryland
Maryland provides an unusual environment for public-private partnerships in toll financing.
Unlike many of the states currently using PPP approaches to highway finance, Maryland has a long
history of tolled highways. The MDTA is the sole entity empowered by state law to establish and
collect tolls on state highway facilities. MDTA can issue revenue bonds secured by its system of
highway toll revenues and operates its facilities as a unified financial system, thereby creating a
pooled revenue fund for the operation, maintenance and enhancement of its highways.
According to its statutory mandate, MDTA “has those powers and duties relating to the
supervision, financing, construction, operation, maintenance, and repair of transportation facilities
projects, including toll highways.” Executing this authority, MDTA adopted regulations on and is
responsible for implementing PPPs (referred to as TP3) for MDOT and its affiliated agencies. All
PPP projects must be consistent with and eventually incorporated into Maryland’s Consolidated
Transportation Plan (CTP) and must comply with all applicable federal, state, and local regulations.
Eligible projects include capital facilities for airports, transit, and port facilities.
Proposals may come from any “person, corporation, Limited Liability Company,
partnership, joint venture or other private business entity with a demonstrated ability to acquire,
finance, construct or operate a new, economically feasible transportation facility of high quality.”
Financing arrangements may include the issuance of debt, equity or other securities or obligations,
and sale and leaseback transactions. However, current regulations do not expressly permit
unsolicited highway PPP proposals.
MDTA appoints a review committee for each project that includes representatives of the
MDOT agency primarily responsible for the applicable type of transportation facility. Proposals are
evaluated according to qualifications of the proposer, the project’s ability to satisfy a public need,
19
compatibility with state and local transportation plans, cost-effectiveness, and ability to result in the
timely acquisition, construction, financing or operation of the facility. The review committee then
presents viable proposals to the Secretary of Transportation for consideration.
In 2004, the transportation agencies of Maryland (MDOT, MDTA, and SHA) commissioned
a study of current highway PPP practices. The study, conducted by KCI Technologies, aimed to
explore the potential for and feasibility of using PPPs to finance, construct, operate and/or maintain
highway facilities in Maryland. The state was particularly interested in the merits of using a PPP
where the toll recovery is not expected to fully cover the project’s capital costs, and of implementing
toll lanes along selected existing routes. Maryland has already initiated limited studies into the
feasibility of additional toll roads and “value-priced” managed lanes on several corridors including
the Capital Beltway in Maryland (I-495/95). The study concluded that the Transportation Public-
Private Partnership (TP3) program has the potential to enhance the state’s transportation system and
would enable the state to “meet its emerging transportation needs in a more timely and cost-
effective manner than may otherwise be possible using traditional sources of public financing. Such
arrangements may also offer sound economic investment opportunities for private firms and may
promote business and employment opportunities for the citizens of Maryland.”
Since MDTA is the sole entity empowered to operate toll facilities in the state, SHA has so
far only solicited firms to complete ‘detail-build’ (a form of Design-Build) projects for some
highways in the SHA system. In Maryland, SHA first requested proposals for Design-Build
highways in 1998. To date, the state has issued sixteen highway Design-Build contracts, ranging in
size from $2.7 million to $48 million, all of which have been financed using traditional highway
construction sources and not toll facilities or highway-specific user fees. Additionally, two contracts
of over $400 million each have been signed for the Inter-County Connector project. Furthermore,
none of the projects has included contractor responsibility for right-of-way acquisition, railroad
relocation, or long term-system preservation.24
The Capital Beltway
History and Importance
The Federal-Aid Highway Act of 1956 authorized the creation of an interlocking national
highway system, free of tolls or other user fees and included plans for the “Circumferential
Highway,” an interstate that circles the Washington, D.C. area. Construction began on I-495 (also
known as the Capital Beltway), in 1958 and was completed in 1964. The road is sixty-four miles
20
long, with twenty-two miles in Virginia and forty-two miles on Maryland’s side of the Potomac
River. The two connections between the states are the American Legion Bridge and the Woodrow
Wilson Bridge.
Th
interregion
and growt
located wi
for the seg
W
(Shirley H
in Virginia
direction).
carry 49,00
of the Belt
the Virgin
lane widen
Figure 4: The Capital Beltway and Surrounding Area
Source: Roads to the Future
www.roadstothefuture.com
e Beltway is the only circumferential freeway in Northern Virginia and provides
al connections to many secondary roads in Maryland and Virginia, facilitating mobility
h in employment, commerce, and residential development. In Maryland, the highway is
thin Montgomery and Prince George’s counties and is generally eight lanes wide except
ment between the I-270 West and East Spurs where it is six lanes wide.
hen it opened, the Capital Beltway had two lanes in each direction from the I-95 / I-395
ighway) interchange in Springfield to VA 193 in McLean. The remaining sections of I-495
and the entire length of I-495 in Maryland consisted of six traffic lanes (three in each
Engineers designed Maryland’s portion to carry 55,000 vehicles per day and Virginia's to
0. Both figures were exceeded by the end of 1965. In 1972, Maryland widened 29 miles
way to eight lanes. In 1977, Virginia did likewise, denoting the last major expansion of
ia portion of the Beltway. 25 Finally, during the early 1990's, Maryland extended its eight-
ing for four miles.
21
Figure 5: The Capital Beltway in 1964
Source: http://www.dcroads.net/roads/capital-beltway/
Beltway Congestion
Despite the 1977 expansion to mostly four lanes on the Inner and Outer loops, the Capital
Beltway lacks the capacity to handle travel demand while drivers experience daily congestion marked
by reduced travel speeds and significant delays. Inclement weather and/or accidents aggravate the
congestion significantly.26 Virginia Secretary of Transportation Homer Pierce made the observation,
“This [congestion] is a serious question being asked in a lot of regions around the country.”27
The Washington DC Metropolitan area experiences the second worst traffic congestion in
the nation28 as drivers spend an average of sixty hours a year stuck in traffic. Moreover, it is getting
worse—the average travel time to work increased from 30.9 minutes in 1990 to 32.4 minutes in
2000.29 It is estimated that these hours have cost the region $5.5 billion in lost time and
productivity.30 Commuters undergo more than 127 million hours of delays at a cost of $1,094 per
rush-hour traveler and waste nearly 91 million gallons of fuel.31 This increase in travel time is due is
due to both a regional population boom and a change in traffic patterns. Currently, the Beltway
carries 180,000-240,000 cars daily and by 2025 the population growth of 32.4 percent will likely
correlate to an increase of over 320,000 cars per day on the Beltway.32
Additionally, according to SHA accident statistics, the Maryland portion of the Beltway
experienced 6,800 police-reported accidents during a three and a half year period between January
2000 and June 2003, resulting in an average rate of 58.1 accidents per 100 million vehicle miles of
travel. The statewide average is 54.7 accidents for a similarly designed highway. According to the
Capital Beltway Study website, Truck related accidents were also “significantly higher than the
statewide average.”33
22
The Capital Beltway’s original
purpose was to handle thru-traffic from I-
95 around Washington, D.C. However,
the Beltway is now a primary artery for
traffic within the National Capital Region,
including trips between major suburbs
(witness the growth of Tyson’s Corner,
Rockville, and Alexandria as business
centers). Indeed, the Beltway represents
only three percent of the lane miles in
Northern Virginia but accommodates
nearly eleven percent of all daily regional
trips. Montgomery County planning staff
indicate that severe traffic congestion on
I-495 will extend to nearly all hours of the
day, with a 14-hour daily rush hour
projected by 2020 (up from five hours per day in 1997).34 As designed, the Beltway simply cannot
support the current traffic demands, let alone the projected traffic growth.
Figure 6: Beltway Traffic at the I-270 Spur in Maryland
Source: The Examiner, Baltimore, MD www.examiner.com
Virginia Capital Beltway Studies
In order to address some of the traffic congestion on the Beltway, the Northern Virginia
region completed its first-ever regional long-range transportation plan from 1987 to 1989. The 2010
plan included a recommendation of the completion of a regional HOV network. From 1995 to
1997, the Virginia Department of Transportation undertook a Major Investment Study (MIS) of the
I-495 corridor and beginning in 1998, VDOT conducted an environmental review of potential
improvements to the I-495 corridor, including lane expansion with the possibility of high occupancy
lanes and reconfigured interchanges. In all, the studies identified and evaluated twenty different
improvement strategies.
The MIS recommended two strategies for further study: 1) highway improvements that
support HOV/bus use, and 2) transit planning for rail line connectivity. The next phase of the
Capital Beltway study, the preliminary engineering and environmental analysis, identified the best
combination of Beltway improvements based on engineering feasibility and environmental impact.
23
Given the regional impact of the project, representatives from federal, state, and local transportation
agencies aided in the review and the draft Environmental Impact Statement (EIS) and identified
three construction alternatives with 10 interchange connectivity enhancements.
As part of the EIS process, VDOT held three public hearings to solicit community input.
Local government officials and citizens objected to various aspects such as the extensive cost
(estimated as high as $3 billion in 2002) and the environmental and eminent domain impacts.
Concurrent with this process, Fluor Enterprises submitted their own unsolicited bid to design and
build High Occupancy Toll (HOT) lanes on the Capital Beltway.
Maryland Capital Beltway Studies
Maryland, through the State Highway Administration, is currently conducting the following
four planning studies along the Capital Beltway.
1. Full Beltway Study. The Full Beltway Study limits include Maryland's entire portion of the
Beltway, 42 miles, which extend from the American Legion Bridge to the Woodrow Wilson
Bridge through Montgomery and Prince George's counties. The right-of-way along the
highway varies between 200 feet and 300 feet. Currently, the schedule for this study is
pending as SHA focuses on the Joint Mobility Studies with Virginia.
2. West Side Joint Mobility Study. The West Side Joint Mobility Study is a joint effort of
Maryland’s SHA and VDOT with the goal of reviewing and connecting Virginia's HOT
Study, Maryland's Capital Beltway Study, Maryland's I-270 Multi-Modal Study, and
Maryland’s Intercounty Connector. The study began in the middle of 2006 and includes an
evaluation of the following factors: a) demand for a managed lane along this section of the
highway, b) how existing and future traffic will operate with a managed lane, and c) how
many lanes are needed for a managed lane system to operate effectively. The study team has
completed the engineering efforts and developed the proposed traffic volumes for the
alternatives. They are currently working on the potential impacts and cost estimates for the
alternatives and analyzing the operational dimension of the proposed traffic volumes.
3. South Side Joint Mobility Study. The South Side Joint Mobility Study is a compilation of
any available existing literature, analyses, studies, designs and reports concerning mobility in
Southern Capital Beltway Study Area previously prepared by stakeholder agencies. The
study area is defined by the Beltway from and including the Springfield Interchange on the
west to Maryland Route 5 on the east. MDOT, VDOT, the Federal Highway
24
Administration, and the District DOT commissioned the study. The study also includes
reviews of planned and existing projects that may also include heavy and light rail, bus rapid
transit, HOT lanes, and managed lanes.
4. Existing Beltway Maintenance. SHA is currently evaluating the condition of the Beltway
pavement and bridges to determine the extent of replacement and rehabilitation
requirements for the next 10 to 20 years. Due to the age and condition of the Beltway, it is
likely that most of the pavement and many of the bridges will need improvements. The
improvements could be implemented as part of the overall Capital Beltway Study or
independent of the study.
At the heart of the studies are six recurring issues:
1) Population and employment projections indicate substantial regional growth in
suburban areas served by the Beltway;
2) Congestion on major routes inside the Beltway is pushing residential and commercial
development to areas outside the Beltway;
3) Lack of alternative routes to serve circumferential travel;
4) High rate of congestion-related accidents on the Beltway;
5) Inadequate capacity to accommodate existing and projected traffic;
6) Federal air quality conformity requirements.
Public-Private Partnerships and the Capital Beltway
Virginia HOT Lanes
Fluor’s unsolicited proposal design provided alternatives to the VDOT plan and reduced the
extensive acquisition of right-of-way. The proposal decreased the number of homes taken from
hundreds to the single digits, thereby reducing the project cost from about $3 billion to
approximately $1 billion and making the project palatable for most stakeholders.35 As required by
law, the Commonwealth opened the project to other bidders; however, Virginia did not receive any
additional proposals. After completing the PPTA review process, Virginia and the Fluor
Enterprises-Transurban Inc. signed a Comprehensive Agreement in April 2005. Transurban, an
Australian firm, partnered with Fluor to provide management and operation of the toll lanes and
deliver the private sector financial investment necessary for the project to be a success. Fluor will
build the lanes and Transurban will maintain and operate them for the duration of the 75-year lease.
25
At present, VDOT and Fluor-Transurban are in the final stages of negotiation and are expected to
conclude by the end of 2007. Once approved, construction on the project will begin in the spring of
2008 and be operational by 2013.
For the Capital Beltway HOT lanes project, Fluor-Transurban’s proposal includes:36
• 56 lane miles of HOT lanes (2 in each direction between the American Legion Bridge
and the Springfield interchange)
• Eight direct entry/exit points, including two direct connections to Tysons Corner and
improved connections at I-66
• 42 Bridges (new, modified, or replaced)
• 41,400 linear feet of new sound wall
• 135 new sign structures (86 existing sign structures replaced)
• Completion of Phase 7 of the Springfield Interchange linking I-95/395 to the Beltway
• Potential for expansion
Figure 7: Virginia HOT Lanes Proposal
Source: www.virginiahotlanes.com
26
There will be several direct
benefits from the HOT lanes. First, they
will provide an incentive for commuters to
carpool on the Beltway since presently
there are no dedicated lanes akin to I-
95/395 or exclusive time allowances such
as on I-66. With the construction of the
Beltway HOT Lanes, carpools (HOV 3+)
and buses will have free access to the
dedicated lanes and enjoy seven separate
exit points to various destinations (see
Figure 8).
A second direct benefit is that as
the private sector assumes many of the
responsibilities involved, VDOT can
devote their resources to other projects
and priorities. Lastly, the four new lanes
will provide drivers in Northern Virginia
the option of free-flowing lanes and relief
from traffic congestion. Virginia Transportat
Beltway HOT lanes, recognized the potential
funding the HOT lanes through a combinatio
way to make this project work. It's too impo
Figure 9: Virginia Beltway Improvements P
Source: http://www.virginiahotlanes.com/
Figure 8: Accessing Capital Beltway HOT Lanes
Source: www.virginiahotlanes.com
ion Secretary Pierce Homer, a strong advocate of the
benefits: "We are fully committed to building and
n of state, federal, and private resources. We'll find a
rtant to the region to do anything less."37
roject Timeline
27
Maryland Express Toll Lanes
Regardless of whether Maryland uses a public-partnership to add capacity to the Beltway, the
state is considering two alternatives that would use ETLs to raise revenue and help relieve
congestion. These managed lanes would have variable or “value” pricing structures that work in a
similar way as familiar peak period pricing and discount programs routinely offered by utilities,
airlines, and transit systems. ETL programs can be structured to encourage motorists to travel
during off-peak traffic hours and offer a fee-based alternative to reduce their commuting time
during peak hours. An electronic toll collection system eliminates the need for tollbooths.
The State Highway Administration recommends further study on the below three
alternatives for I-495 in Maryland (see Figure 10).
• Alternative I - No Build. This alternative includes routine maintenance and safety
improvements but no additional lanes. It will serve as the basis of comparison for all
other alternatives.
• Alternative II - 8 General Purpose and 2 Express Toll Lanes. This alternative
provides one additional, tolled concurrent flow (no barrier separation) lane per direction.
Tolls would vary based on traffic conditions or time of day. Although this alternative
provides a more cost effective option with the use of Express Toll Lanes, it has limited
revenue as there is only one toll lane in each direction. In addition, the inability to pass
vehicles in the toll lane will reduce travel time savings.
• Alternative III - 6 General Purpose and 4 Express Toll Lanes. This alternative
provides one additional, tolled lane per direction and it would convert one existing
general-purpose lane per direction into a tolled lane. Similar to Alternative II, tolls
would vary based on traffic conditions and time of day. This alternative would generate
the maximum revenue because there would be two tolled lanes in each direction;
therefore, it could provide a potentially cost-effective solution to Beltway congestion.
28
Figure 10: Diagrams of SHA Alternative for Further Study Alternative I - No-Build
Alternative II - 8 General-Purpose and 2 Express Toll Lanes
Alternative III - 6 General-Purpose and 4 Express Toll Lanes
Source: www.capitalbeltway.mdprojects.com
29
KEY FINDINGS
This section provides the research team’s answer to each research question. Following each
question are the key findings and an in-depth analysis of the answer.
Research Question 1:
To what extent and how have Virginia and Fluor-Transurban satisfied NCPPP’s six
criteria for a successful public-private partnership with their effort to add capacity to
the Capital Beltway? What areas do they need to improve on, if any?
Key Finding #1: Virginia’s partnership with Fluor-Transurban satisfies NCPPP’s six
criteria for a successful public-private partnership and we predict its success.
Criterion 1: Political Leadership
A strong political advocate can be the best harbinger for the success of a public-private
partnership. PPPs in general, and the Capital Beltway project in particular, have numerous
supporters, including David Ekern, VDOT Commissioner; Mary Peters, the former FHWA
Administrator and current U.S. Secretary of Transportation; Pierce Homer, Virginia Transportation
Secretary; current and former Governors and members of the General Assembly. These individuals
have made public remarks in favor of such partnerships and the potential for HOT lanes to deliver
additional highway capacity.
James Atwell, former chief financial officer with VDOT, acknowledged the growing interest
in public private partnerships as more of a necessity than just another business opportunity.
“Everybody’s grappling to find money to meet needs. In the 1980s there was public will and
political will to raise taxes; it has not occurred in the last 20 years, and that has turned people in the
direction of public-private partnerships, tolls, and more esoteric solutions to meet transportation
infrastructure needs.”38
Fairfax County Board of Supervisors Chairman Gerry Connolly has expressed his support
for the project, “Finding new ways to improve the quality of life for Northern Virginia residents is
an absolute necessity in an area growing as quickly as we are. There is no single solution to the
congestion problem, but incorporating a project like this can be a powerful tool in our efforts to
address Northern Virginia congestion.”39
30
Additionally, the 1997 Public-Private Transportation Act (PPTA) passed the General
Assembly with bipartisan support. The original legislation had 22 Senate and 14 House sponsors.
The legislation passed the House 98-1 with the Senate concurring 40-0.40 The 2005 bill clarified the
original legislation and again received favorable review. Megan Fletcher with Transurban stated,
“We have established a strong relationship with the state. From a U.S. perspective, public-private
partnerships are really just starting to emerge. Virginia was in the forefront of recognizing the part it
can play.” 41
Despite the initial support for PPPs, there are more projects in the planning stage than are in
operation or construction. The political support in Virginia demonstrates the value PPPs have in
addressing transportation needs, but as Governor Kaine noted in his May 2006 testimony before the
US House of Representatives, Transportation and Infrastructure Committee, “The ink needs to dry
so that perspective can be gained on these public-private transactions.”42
Criterion 2: Public Sector Involvement
Virginia’s PPTA Guidelines dictate a six-phase procurement process, including three phases
that serve as oversight review: 1) VDOT Quality Control Review, 2) Independent Review Panel, 3)
Commonwealth Transportation Board (CTB) Review and Recommendations. Both monitoring and
oversight are necessary to maintain accountability on the part of the public and private sectors while
ensuring that that the government’s interests are protected. Most of the guidelines for monitoring
and oversight are explicitly stated in the project’s Comprehensive Agreement, which establishes
construction milestones allowing VDOT to maintain oversight of the project, provide notices to
proceed, and the right to terminate the contract if certain criteria are not satisfied.
Criterion 3: A Well Thought-Out Plan
The Virginia General Assembly has taken proactive steps to enact and amend legislation that
creates the legal framework for the viability of public-private partnerships. In 2005, the General
Assembly amended the 1995 PPTA to:
• Require mandatory risk sharing
• Increase transparency and public involvement
• Permit private sector solicitation of federal funding
• Increase penalties for toll violations
31
• Solidify partnership status during project construction and implementation43
Virginia’s legislation dictates a public review process and comment period, a method to
prepare and review proposals, and the guidelines for the comprehensive agreement that determines
the relationship between the state and private entity to ensure oversight responsibilities by VDOT.
Operating under this framework and acting on behalf of the public and Commonwealth’s interests,
VDOT authorities “negotiated a fair and reasonable partnership” that maintains VDOT’s oversight
rights and responsibilities.
Expected by year’s end 2007, the comprehensive agreement will expand on the negotiated
business terms reached in September 2007 that delineates:
• Rights and obligations of the public and private sectors
• Allocation of risks and responsibilities
• Concession specifics about overuse of the lanes by HOV and transit
• Fixed price and timeline for design and construction
• Commonwealth’s ability to build other transportation capacity
• Revenue sharing
• Financial commitment on the part of both parties
• Responsibility of the private sector to maintain free flowing conditions on the lanes
Criterion 4: A Dedicated Income Stream
Before the public sector will assume the financial risk of financing a multi-year, billion dollar
project, Fluor-Transurban must have assurances (within a degree of certainty) that their investment
can be recovered through a dedicated income stream. Tolls or user fees are common sources of
revenue as part of projects that deliver major highway infrastructure.
The private sector consortium of Fluor-Transurban is financing three quarters of the cost of
the project. In return, the joint venture will operate the HOT lanes and collect user fees in the form
of market-based tolls for non-HOV vehicles.
Before the development of a comprehensive financing plan and the commencement of
contract negotiations, Transurban hired an expert transportation-consulting firm to conduct an
investment grade traffic and revenue study. This type of study, a common practice with any
transportation investment that involves financial risk, is necessary to estimate the level of traffic and
32
potential revenue stream. The study was used as an entering argument in the negotiations of the
final business terms between all parties completed on August 31, 2007.
The traffic modeling predictions in this study estimate that the average trip during rush hour
will be $5 to $6 with tolls varying from 10 cents to $1 per mile depending on the day and the level of
congestion. Barbara Reese, VDOT’s Chief Financial Officer, stated that the study estimates 66,000
vehicles per day will cross through the HOT lanes during the first year. After the ramp up period
(approx one year), daily trips are projected to rise to 125,000. A key feature of the agreement is that
High Occupancy Vehicles (HOV) carrying three persons or more that use the HOT lanes will not be
charged user fees. To provide insurance to the concessionaire that this allowance will not dominate
the lanes, the state will provide reimbursement for HOV use if it exceeds 24 percent of daily traffic.
This part of the agreement is effective for 40 years.
At the time we conducted research for this report, submission and verification of the final
operational models to ensure congestion will be adequately addressed was the only outstanding item
remaining. After this part of the agreement is finalized, the investment grade traffic revenue study
and final business terms will be made public (expected by year-end 2007).
Finally, VDOT will be entitled to receive a share of toll revenues if HOT lane revenues
exceed predictions. This share will range from five percent to 30 percent of gross tolls. A series of
return benchmarks will be established and agreed upon as part of the completed financial
arrangement.
Criterion 5: Communications with Stakeholders
Communication with stakeholders is an essential and never-ending process. Activity outside
of status quo and the introduction of new concepts can be met with resistance, especially if there is a
lack of understanding or available information on the issue. The underpinning assumption is that
more people are affected by a partnership than just the public officials and the private sector. Open
and candid communication with stakeholders of all types is paramount to achieving public
acquiescence.
The Capital Beltway is widely used by a broad range of stakeholders. Various government
entities, surrounding communities, first responders, businesses, and mass transit are just a few.
Several published interviewees responsible for urban planning and project development discussed
the historic lack of public acceptance for widening the Capital Beltway in Virginia. Concerns ranged
from displacement (right-of-way), anxiety over large price tags, and general opposition from
33
surrounding communities and environmental groups. In order to bolster support and educate
stakeholders on the benefits of improving 14-miles of congested corridor, Fluor embarked on an
outreach campaign that involved polling and community meetings. Fluor invested considerable time
educating the public on the benefits of HOT lanes and succeeded in moving public opinion about
the project from eight percent in 2002 to 54 percent approval in 2004.
While Fluor provided a lion’s share of the initial outreach, the PPTA legislation mandates
that the Commonwealth provide a conduit for the public to provide input and make comment.
Through the PPTA and NEPA processes, there have been multiple points of access for the public
to engage officials and express their sentiments. Responding to public comments, concerns, and
preferences, changes were integrated into the project. This was especially apparent with the
integration of the final phase of the Springfield interchange, right-of-way eminent domain
reductions, and changes to the interchanges with I-66.
Virginia has actively engaged the media at each step and has maintained a website cataloging
past news releases and documents pertinent to the project. Beginning in earnest with the changes to
the Springfield Interchange and Woodrow Wilson Bridge, VDOT embarked on a decade-long
public outreach campaign that encourages commuters to make informed travel decisions and
assisting employers to facilitate rideshare and tele-work programs for their employees. Virginia has
also collaborated with partners in transportation such as the Department of Rail and Public
Transportation, the Federal Highway Administration, Fairfax County DOT, rideshare agencies,
police, and other regional transportation agencies to ensure that the final plan anticipates and
addresses all traffic management issues. The state will also operate three storefront project
information centers in the area to facilitate field inquires from the public and increase awareness.
Finally, Fluor-Transurban launched their public information website to provide the public with a
central, comprehensive source of information for the HOT lanes on the Beltway and I-95/395.
Criterion 6: Selecting the Right Partner
The last criterion stresses the importance of selecting the right business partner. Prospective
partners who offer the lowest bid do not always provide the best value in the long-term relationship.
A candidate’s experience in the area of public-private partnerships should be a major consideration
before entering into any kind of agreement.
Fluor-Transurban was ultimately selected to partner with the Commonwealth on this
project. After receiving the unsolicited proposal from Fluor, Virginia opened the competitive bid
34
process for 120 days but did not receive any additional, competing proposals. Fluor is one of the
world’s largest publicly owned engineering, procurement, construction, and maintenance service
companies and has a long record of success in delivering transportation solutions. A few examples
of recent projects include the design-build of Texas’s largest single highway project, SH 130, which
encompasses 90-miles of toll road; the Conway Bypass in South Carolina that involved a design-
build contract for over 28 miles of highway opening seven months ahead of schedule, and; the
development, financing, design and construction of Virginia’s Pocahontas Parkway (Route 895).
Fluor partnered with the Transurban Group to satisfy Virginia’s request that the private
sector also maintain and operate the new lanes. Specializing in the electronic collection of tolls,
Transurban is a leading international toll road developer, operator and investor with interests in
seven major assets in Australia and the United States. Virginia is also currently satisfied with
Transurban’s performance on the Pocahontas Parkway in the Richmond area.
Key Finding #2: Since highway PPPs are still in their nascent stages of operation and no
projects of this magnitude currently exist in Virginia, it is difficult to facilitate an equivalent
comparison.
The Capital Beltway HOT lanes PPP project is the first in the Commonwealth to involve full
participation by the private sector in the design, build, operation, maintenance, and finance stages.
The scope of the project, escalating cost, and lease duration are untested variables in the PPTA
process. Despite the Virginia Department of Transportation’s stellar PPP performance record, there
are few corresponding projects with long-range results to compare processes and forecast long-term
outcomes.
Despite having what many consider model PPP legislation, Virginia’s PPTA remains
somewhat untested due to the limited history of PPP execution in the Commonwealth. Although
the PPTA has existed for over ten years, Virginia has only completed three PPP projects while eight
more are in progress. The three completed projects under PPTA guidelines (Route 288, Pocahontas
Parkway and Jamestown 2007) do not involve the significant, private sector financial risk that Fluor-
Transurban is assuming with the Beltway project. When Fluor submitted their conceptual proposal,
they, estimated the original cost of the project to be $693 million. Factoring the scope expansion,
inflation and equitable adjustments due to the cost of materials, current projections stand at $1.7
billion.
35
Despite this significant cost increase, extensive political support for the Beltway HOT lanes
has enabled the project to move forward. Even after it was disclosed that the project would require
a financial investment from the state, Secretary Homer voiced his commitment to the project, “We
have an opportunity to obtain a billion-dollar facility with a fraction of that put in by the public
sector. We are fully committed to building and funding the HOT lanes through a combination of
state, federal and private resources. We’ll find a way to make this project work….We could not
afford to construct this project using traditional transportation revenue sources."44
It is widely acknowledged that PPPs are not a panacea for the Commonwealth’s
transportation needs and for a plethora of reasons, unexpected challenges such as cost increases do
arise. While still supportive of the project, Fairfax County Board of Supervisors Chairman Gerry
Connolly voiced his concern about the cost escalation, "We can't simply hope that the tooth fairy, in
the form of the private sector, will make all of our problems go away."45 The public and private
sectors concur that PPPs are one more tool in the toolbox for use on projects that maximize public
and private sector resources.
The Capital Beltway HOT lanes project is a strong candidate to be a successful PPP since
the transportation needs exceed public sector resources that the private sector can provide at a
financial return worthy of their investment. Additionally, both parties have committed finances,
staff, and their reputations in the success of this project. VDOT and Fluor-Transurban appear to be
exercising remarkable commitment and stewardship in a mostly open and transparent process. We
predict these arduous negotiations will result in the best possible value for stakeholders and service
to Beltway users. However, since it is the first project of its kind in Virginia, many untested
variables could facilitate or inhibit the project’s long-term success.
Research Question 2:
What are the key challenges and obstacles Maryland faces for building additional
highway lanes on their portion of the Capital Beltway?
Key Finding #3: Maryland’s highest transportation priority is system preservation.
Every five years, Maryland updates its 20-year Maryland Transportation Plan (MTP) which
guides statewide improvements across all means of transportation, including highways, roads,
tunnels, bridges, rail, buses, water ports, airports, bike paths, and sidewalks. The plan includes goals
and objectives, which then inform the annual budget and planning process. The most recent plan,
36
developed in 2004, positions system preservation as its highest priority and the 2009 plan currently
being developed is expected to do the same. Within the goal of system preservation (referred to as
“efficiency” in the MTP) the two main objectives are to “extend the useful life of existing facilities
and equipment” and “maximize the operational performance and capacity of existing systems”.
The 2007 – 2012 Consolidated Transportation Program (CTP), Maryland’s six-year capital
investment program for transportation, reveals annual system preservation requirements ranging
from $642 million to $778 million with the total over the six-year period equaling $4.2 billion. This
represents 47 percent of the $9 billion in anticipated revenue over the period of the CTP. Thus,
when combined with the financial and local political constraints described below, there leaves little
possibility that Maryland will include adding capacity on the Beltway to its list of projects for the
foreseeable future.
Key Finding #4: Given the limited financial resources for current projects, expanding the
Capital Beltway is currently cost-prohibitive using traditional financing methods.
At the heart of public budgeting is the inherent conflict between the demand for public
financing and the finite resources available for achieving those ends. The state of Maryland,
especially in regards to transportation, is no exception to the rule.
While exact cost figures are not yet available, early estimates for expanding the Beltway range
from $2 to $4 billion. With system preservation demands and large projects such as the Intercounty
Connecter and I-95 ETLs north of Baltimore costing so much money, it is currently cost prohibitive
to expand the Beltway in one large project. Maryland is therefore implementing Beltway
improvements on a project-by-project basis with MDOT’s focus being to improve the Beltway
through system preservation projects where lane expansion is included.
Compounding the problem are the current general financial pressures on the state and the
Transportation Trust Fund. To help mitigate the current transportation budget shortfall, Governor
O’Malley has proposed a series of policy changes that would generate about $400 million annually
for the Transportation Trust Fund. However, emblematic of the severity of the budget shortfall that
would still exist; these measures would only help fund the first three major transportation priorities
on a list of fourteen needed projects in Montgomery County. Moreover, as discussed below, this list
of fourteen immediate transportation priorities for Montgomery County does not include Beltway
expansion.
37
Key Finding #5: The potential environmental impacts of Beltway expansion and the
resulting political opposition may create an contentious environmental approval process.
As part of the four planning studies currently underway in the state of Maryland for
expanding the Capital Beltway, A.D. Marble and Company was contracted to inventory the potential
environmental impacts of the alternatives being considered. The company grouped the
environmental effects into three categories: 1) socioeconomic, 2) cultural, and 3) natural
environmental resources.
The socio-economic environmental impacts revolve around land use, minority population
concentration, and household income. The severity of right-of-way issues on Maryland’s side of the
Beltway has the potential to cause a significant amount of public opposition and outcry. SHA’s
alternatives for Beltway expansion call for only 10 lanes vice 12 lanes due to the right-of-way
constraints. Even with the addition of one lane on each side of the Beltway, the state will likely
have to uproot many residences and businesses.
Cultural resources could also be affected by any project to expand the Beltway as there are a
number of known and potential historical or archeological sites in the area of study. If a project
were to be pursued, it has been determined that a Phase I archeological investigation would be
required wherever it is likely that ground will be disturbed.
The natural environmental resources aspect of the study includes several components. First,
an air and noise quality analysis will be done to ensure conformity with regional and local standards.
Second, the state has to complete a technical documentation of all potential impacts on parks,
communities, and the regional economic environment. Finally, there will be a Secondary and
Cumulative Effects Analysis to assess long-term effects on environmental resources as they relate to
other development projects in the region. Specific natural resources potentially threatened by the
project include several 100-year floodplains and associated wetlands such as the Potomac River,
Rock Creek, and numerous small tributaries. Also making the situation problematical is the fact that
in Montgomery County the Potomac River is designated as a Scenic River under the Maryland Wild
and Scenic Rivers Program, requiring that the qualities of the river are protected and enhanced.
Additionally, 44 state-listed rare, threatened, and endangered species of plants and animals have been
identified in the vicinity of the Beltway corridor.
The National Environmental Protection Act (NEPA) process is a necessary component of
the highway construction process if federal approval is required due to the use of federal funds,
federal loan guarantees, or approval for the use of tolls on interstate highways. Given the cost and
38
financing circumstances of the state under each of the alternatives currently on the table, it is likely
that Maryland will at least strongly consider incorporating federal funding, thereby necessitating the
NEPA review process. However, the NEPA process is often seen as one of the most cumbersome
obstacles facing project implementation.
The primary environmental hurdles therefore are the potential of not meeting federal, state,
and local standards, the difficulty of navigating the various analysis and approval processes that must
be completed, and the fierce opposition from environmental groups and local citizens that the
project is likely to ignite.
Key Finding #6: There is limited local support for expansion of the Capital Beltway in
Maryland.
The primary political obstacle to the expansion of the Beltway is the lack of political support
at the local level. Citizens in the two counties that would be affected, Montgomery and Prince
George’s, are opposed to any expansion of the Capital Beltway as they believe it will lead to
increased noise, pollution, traffic congestion on the main beltway lanes and arterial roads, disrupt
nearby businesses, and pose dangers to schools and hospitals in the vicinity. Some also argue that
the tolling system would unfairly favor wealthy drivers over middle and lower income drivers, the
so-called “Lexus Lanes” effect. County officials argue that even with the introduction of toll lanes,
the majority of people would still be stuck in the regular lanes.
In January 2006, more than 20 civic and neighborhood groups from Montgomery and Prince
George’s counties announced a new coalition to fight Governor Ehrlich’s proposal to widen the
Capital Beltway by adding express toll lanes. The group Citizens Against Beltway Expansion has
argued that the project would threaten nearby neighborhoods, fail to provide relief from congestion,
and unfairly favor wealthy motorists.
Based on our interviews, it appears that the state of Maryland does not want to challenge the
local governments on this issue and transportation agencies will only fund projects that counties
recommend. There is no evidence that Maryland will proceed with expansion of the Capital Beltway
without local support.
39
Key Finding # 7: Montgomery County and Prince George’s County have other
transportation priorities.
In Maryland, most transportation priorities for the state agencies come as recommendations
from the local level and the Beltway expansion project is not a priority for either county. In
Montgomery County, there are at least 14 projects prioritized over the Beltway, most importantly
the Intercounty Connector (ICC) that connects Montgomery County to Prince George’s county.
Local officials and resident coalitions have argued that instead, Maryland should build an
east-west transit link (called the Bi-County Transit-way or Purple Line), improve bus service, and
make communities more pedestrian friendly. Prince George’s County also does not include Beltway
expansion on its 2007 Priority Project List for the State Consolidated Transportation Program. A
County official explained to the research team that the enormity and cost of such a project did not
warrant inclusion on their list. However, the County listed the Purple Line project as its number
one priority for state transit.
Based on our interviews and research, it is clear that the ICC and Purple Line are much
higher priorities, leaving little chance that a project as immense as Beltway expansion can gain
traction. Citizen coalitions and local politicians frequently argue that a fully tunneled Purple Line
would avoid disruption to dense local neighborhoods and provide a much needed transit solution
for Maryland residents. However, studies have suggested that the Purple Line is not likely to divert
more than two percent of the traffic away from the Beltway, and is unlikely to relieve congestion, as
there is significant latent demand from those who currently chose other less convenient routes over
the Beltway.
County officials are also wary of Beltway expansion coming at the expense of locally
supported transit projects. Since the expansion would be financed by user fees this should not be an
issue, but despite this, local residents continue to be opposed to any widening of the Beltway. Since
the state looks to the local governments for its transportation priorities, the Beltway simply does not
take precedence in Maryland.
Key Finding # 8: There is a lack of political consensus on how to move forward with
expanding capacity on the Capital Beltway.
The nature of Maryland’s transportation prioritization process dictates that political
consensus, from local citizen groups up to the Governor, exist in order to make progress on projects
as sizeable as expansion of the Capital Beltway. Despite support from former Governor Ehrlich for
40
the expansion of the Capital Beltway, there has been fierce local opposition to the idea, due to fears
of increased noise, traffic, and pollution in the affected counties. Since Maryland usually looks to its
local governments to provide transportation priorities for its residents, there appears to be little
progress on the Beltway issue. Compounding the local opposition are right-of-way issues,
environmental concerns, and other transportation projects that already have popular support to
some degree. Capital Beltway expansion is unlikely until these local obstacles are dealt with in
conjunction with strong gubernatorial support.
Research Question 3:
If Maryland decides to pursue widening the Capital Beltway, do the conditions exist
for Maryland to use a public-private partnership to finance, build, maintain, and
operate the additional lanes? If not, what conditions need to exist for a public-
private partnership to be a viable option in Maryland?
Key Finding #9: Maryland does not have adequate legislation to pursue public-private
partnerships for highway projects.
While Maryland is one of 21 states with PPP legislation, its statutory framework is not
specific enough for both the private and public sector to enter into PPP agreements for highway
projects. Maryland has delegated its Transportation Authority (MDTA) the power to facilitate a
PPP program. In 1997, Maryland established regulations (TP3 Guidelines) that allow MDTA to
administer a PPP program on behalf of the Department of Transportation. However, the TP3
Guidelines specifically state that MDTA’s PPP program “is not designed to consider or evaluate
highway facilities.” To date, MDTA has entered into numerous PPP agreements for non-highway
transportation projects. A 1996 state’s attorney general opinion said MDTA has sufficient authority
to enter into a PPP agreement for highways, but no such agreements have yet to take place.
According to one of the nation’s leading legal experts in PPP legislation, the Maryland
attorney general’s opinion is extremely limited and does not have sufficient explanation. Under the
current regulations, the General Assembly has little input on determining the scope of PPP projects
outside the 45 days that current law allows them to review and comment. Thus, it does not give
comfort to potential private investors and government officials who seek certainty when entering
into such enormous financial deals involving high levels of risk. Rather, in this expert’s opinion,
comprehensive legislation would provide detailed guidelines and document specific procedures that
41
would have to take place in constructing a PPP agreement. Even one of Fluor’s leading managers
stated that the private sector is unlikely to venture into any PPP agreement with Maryland unless
there is certainty provided by robust legislation. States such as Virginia, Texas, Indiana, and
California all have comprehensive statutory frameworks for PPP agreements. In turn, these states
have all experienced success with highway PPPs. Further corroborating these statements, in
December 2006 the Maryland Department of Legislative Services issued a report on public-private
partnerships that emphasized how Maryland’s General Assembly has extremely limited oversight for
PPP projects because of its weak statutory framework.
Key Finding #10: Maryland does not currently have a political champion for highway
related public-private partnerships.
Regardless of their affinity towards public-private partnerships, every interviewee stated that
in order for PPPs to come to fruition there has to be strong leadership from the top. The governor
has to be a political champion and there must be corresponding support from the state’s legislature.
Over the years, Virginia governors have emphatically supported PPPs regardless of their political
affiliation. They have also faced little opposition from their state legislature. Support for PPPs in
Maryland in the past three administrations (Glendening, Ehrlich, and O’Malley) has varied and both
the executive and legislative bodies lack consensus on the issue. Former Maryland Governor Robert
Ehrlich and Transportation Secretary Robert Flanagan were more interested in addressing
transportation issues with public-private partnerships than the current administration. Examples of
their support include:
• In 2003, the Maryland Senate passed the Public-Private Transportation Act of 2003 (SB
497), however, the House version of the bill (HB 1162) never made it out of the
Environmental Affairs Committee. A senior ranking official in the Ehrlich
administration told us that they were interested in taking a PPP approach for the
Intercounty Connector (ICC). However, because the bill failed in the General Assembly
and they could not achieve consensus, the administration decided to abandon the PPP
approach for the already controversial and long-awaited ICC project. In this person’s
opinion, political consensus between the executive and legislative bodies was critical for
a project of that magnitude.
• In 2004, in order to gain a better understanding of PPP highway programs, the
Department of Transportation, along with MDTA and the State Highway
42
Administration, commissioned a review of highway PPP initiatives in various parts of the
country (Current Practices in Public-Private Partnerships for Highways).
• In 2006, the Ehrlich administration initiated a Request for Expressions of Interest (REI)
for private sector suggestions on adding capacity to the I-270 corridor. The
administration envisioned using PPPs to expedite projects that the state could not fund.
The state received numerous responses in December 2006 just before Governor Ehrlich
left office. The current administration asserts that they are still reviewing the responses
but we have not seen any evidence that the state is moving forward with any sort of PPP
project for the I-270 corridor.
Governor O’Malley’s administration has not exactly decried public-private partnerships but
neither have they become a leading supporter of them. This past May, Congressman Oberstar and
Congressman DeFazio sent a letter to state governors and legislators urging them to avoid rushing
into PPPs for highway projects that are not in the long-term interest of the public (see Appendix E).
MDOT officials told us that Maryland shares the same concerns of the Congressmen, but
maintained that PPPs are a “tool for the toolbox” and they will always consider them as an option
on a case-by-case basis. The leadership in Virginia had a different response to the Oberstar-DeFazio
letter. Transportation Secretary Pierce Homer said that the letter had “good intentions” but
disagreed with them on the need for tolling to generate critically needed revenue as well as the
advantages tolling has in managing congestion. He also pointed to the success Virginia has had with
PPPs and how they have been able to deliver highway projects on budget and in shorter timeframe
than traditional means.46
Governor O’Malley’s primary focus so far has been on resolving the state’s budget crisis.
While he has promised to put $400 million a year into the state’s transportation fund, there is no
mention of taking on new mega-projects beyond current commitments, most notably that of the
Capital Beltway. There is also almost zero evidence pointing to support by Governor O’Malley’s for
PPPs for new highway projects. In a June 2007 speech to the Washington Board of Trade regarding
the building of Maryland's transportation infrastructure, there was no mention of using or even
considering the use of PPPs to finance new projects. He also did not mention adding capacity to
the Capital Beltway, but instead discussed the Purple Line, the Intercounty Connector, and the
Metro system. However, Maryland officials did acknowledge that if a “mega” project came forward
and needed to be delivered quickly, they would more than likely need a vehicle other than what is
43
currently in place to bring the project to fruition. Therefore, they would consider the option of
financing the project through a public-private partnership.
Key Finding #11: Maryland TP3 Guidelines prohibit unsolicited proposals for highway
projects.
Maryland does not currently allow for unsolicited proposals for highway projects. However,
the state does accept unsolicited proposals for other non-highway related projects. Maryland does
not have staff dedicated to this process and therefore, officials feel that the unsolicited proposal
process consumes too much time and resources to consider and therefore prevent the state from
focusing on existing priorities. Virginia on the other hand has traditionally welcomed unsolicited
proposals and has a dedicated and experienced staff ready to receive them. Under House Bill 662 of
2007, the operation of MDTA with respect to its PPP program would have to be consistent with
Virginia’s policies and allow for solicited and unsolicited proposals for highways. The O’Malley
administration opposed this bill and it ultimately failed in the Environmental Matters Committee.
Key Finding #12: Maryland already has a tolling authority (MDTA) to help finance highway
projects.
The Maryland Transportation Authority is the state’s tolling agency responsible for
managing, operating, and improving the state’s toll facilities. Officials in Maryland believe that
MDTA can finance projects just as well as the private sector can. Through MDTA, the state is able
take advantage of its favorable bond rating and use tax-exempt revenue bonds to develop toll
facilities, roads, bridges, and tunnels throughout the state. In turn, the state is able to operate the
highway and collect toll revenues. States like Virginia that utilize PPP agreements to finance new
highways do not have a tolling authority (or an authority as robust as Maryland’s) and thus are more
likely to turn to public-private partnerships in an effort to finance new highway projects while
avoiding an increase in the state’s debt capacity.
Key Finding #13: Local opposition to tolling will likely prevent Maryland from pursuing a
PPP agreement for the Capital Beltway.
Public-private partnerships for highway projects generally use some form of tolling as a
source of guaranteed revenue to recoup debt. Although we could not obtain any statistical evidence
that Maryland’s citizens oppose tolling and despite the fact that MDTA will toll the ICC, the MDOT
44
officials we spoke with made it very clear that tolling the Beltway is an extremely unpopular option.
Additionally, an official from the Prince Georges County Department of Public Works and
Transportation explicitly said that Prince Georges County is against any form of tolling on the
Beltway. Concerning ETLs, the official said the County is adamantly opposed to any sort of tolling
that allows the tolling entity to select who has a shorter commute based on one’s ability to pay.
Despite these assertions, public sentiment may be beginning to turn in favor of toll roads.
Virginia has not received much negative feedback from the public with respect to their proposal to
add HOT Lanes on the Beltway and I-395. Additionally, in AAA’s 2006 “Pockets of Pain” survey,
52 percent of the people surveyed were in favor of using tolls to pay for transportation projects.
Only 40 percent favored increased taxes such as the motor fuel tax, vehicle title tax, or sales,
property, and income taxes. If local opposition for toll collection is enough to prevent the state
from tolling the Beltway, then it is highly unlikely that Maryland would choose to enter into a PPP.
45
CONCLUSIONS AND RECOMMENDATIONS
It would be difficult to argue that traffic congestion is not a problem in the Washington, DC
metropolitan area. Most people would agree that the Capital Beltway is one of the most dreaded
traffic routes in the region, perhaps even the country. When NCPPP asked us to research the
approaches Virginia and Maryland were taking to relieve congestion on the Beltway, on the surface it
appeared as though the issue was rather straightforward; Virginia was taking positive action while
Maryland remained in neutral. However, it became rapidly apparent that the situation was more
complex than originally thought and that the subject warranted objective research. Although the
states share a highway and a common interest in improving highway infrastructure for the 21st
Century, they operate under different legal and administrative structures and face distinct challenges
and opportunities in adding capacity to the Beltway. Below is a list of conclusions and subsequent
recommendations for NCPPP. It is not necessarily an all-inclusive list, but based on our research,
we find these to be the most pertinent.
Conclusion 1: Virginia has an extensive history of successful public-private partnerships
that has enabled them to be a leader in this innovative method of constructing and
financing highway projects.
Virginia has PPP legislation that continues to be developed and refined. It has also served as
a model for many states attempting to enact similar legislation. Virginia has proven success with
PPP projects to include the Pocahontas Parkway, Route 288, and Route 199. Their success has
enabled them to pursue other PPP projects such as Route 28, I-95/I-395 Hot Lanes, and the I-495
HOT Lanes. We attribute much of Virginia’s success with public-private partnerships to the strong,
continuous support from governors of both political parties as well as the state legislature.
Conclusion 2: Maryland does not have the support necessary to widen the Capital Beltway.
Support for widening the Beltway needs to come from the state and local governments as
well as the public. Without greater support from Montgomery and Prince Georges County, the state
government is not inclined to take on such a controversial mega-project. Widening the Beltway
lacks support for a variety of reasons but some of the more dominant ones include severity of right-
of-way issues, environmental concerns, and public disagreement towards tolling. Additionally,
elected officials invested significant political capital in the Intercounty Connector and Maryland is
46
currently involved an unprecedented budget crisis. A mega-project such as the Capital Beltway
needs to have consensus from the Governor, General Assembly, and a host of local governments.
Conclusion 3: Maryland is not well suited to enter into a public-partnership for highway
projects.
Absent the ability to facilitate a large capital outlay, Maryland, like many states, lacks the
necessary funding to develop large transportation initiatives. Maryland officials stated that they are
not taking on any new projects and the state’s current focus is system preservation. While public-
private partnerships are not a panacea to a state’s financial problems, many states are entering into
PPPs as a way to quickly and efficiently deliver new highways and bridges. With proven success in
states like Virginia, Texas, and California, PPPs are beginning to take notice. While Maryland has a
PPP program with MDTA, its legislation is very tenuous. There is also no evidence of
overwhelming support or a consensus from the Governor and the General Assembly on PPPs for
highways. If Maryland desires to spearhead new highway mega-projects, they need to have new
comprehensive legislation for public-private partnerships. The legislation needs to be specific
enough so that both the public and private sector understand the process from beginning to end.
For this to happen and for PPPs to be successful, Maryland needs to have their Governor and
General Assembly be ardent supporters of PPPs.
Recommendation 1: NCPPP should continue its educational activities across all sectors to
enhance knowledge of public-private partnerships and their applicability to transportation projects,
specifically the expansion of the Capital Beltway in Maryland.
Recommendation 2: NCPPP should continue its relationship with the School of Public Policy and
Public Administration at The George Washington University as a means of furthering research into
topics relating to the Beltway and PPPs. Topics recommended for future research include:
• The politics of PPPs: Exploring the roles and positions of the executive and legislative
branches in implementing PPP transportation projects
• PPPs and the Maryland General Assembly
• Issues and options pertaining to a comprehensive approach to regional congestion
management (e.g. highway expansion, smart growth, transit options, etc.).
47
ENDNOTE
1 U.S. Department of Transportation, Federal Highway Administration and AECOM Consult Team. 2006a. Issues and Options for Increasing the Use of Tolling and Pricing to Finance. Fairfax, VA, June 9. Available at: http://ncppp.org/resources/papers/tollissuesreport606.pdf.
2 The National Council for Public-Private Partnerships. 2007. How Partnerships Work. Washington, D.C. Available at:
http://www.ncppp.org/howpart/index.shtml#define.
3 Savas, E. S. 2000. Privatization and Public Private Partnerships. New York: Chatham House.
4 U.S. Department of Transportation, Federal Highway Administration, 2007a. PPPs Defined. Available at: http://www.fhwa.dot.gov/ppp/defined.htm.
5 Poole, Robert and Peter Samuel. 2006. The Return of Private Toll Roads. Public Roads. March/April, Vol. 69, No. 5. Washington, D.C. Available at: http://www.tfhrc.gov/pubrds/06mar/06.htm.
6 Orange County Department of Transportation. 91 Express Lanes 2006 Report. Orange County, CA. Available at:
http://www.91expresslanes.com/generalinfo/91annualreport.pdf.
7 Hubert H. Humphrey Institute of Public Affairs. 2006. I-394 MnPASS – A New Choice for Commuters: How is it Working? Rethinking Transportation Finance Roundtable. March 23, Coffman Memorial Union, University of Minnesota. Available at: http://www.hhh.umn.edu/img/assets/20844/394_MnPass_roundtable.pdf.
8 Virginia Department of Transportation. 2007. Bulletin. January-February. Vol. 73, No. 1. Richmond, VA. Available at:
http://www.virginiadot.org/about/bulletin/2007/Jan-Feb/default.asp.
9 Virginia Department of Transportation. 2007. Projects and Studies: Six-Year Improvement Plan Frequently Asked Questions. Richmond, VA. Available at: http://www.virginiadot.org/projects/syp-faq.asp.
10 Virginia Department of Transportation. 2004. News Release: Six-Year Improvement Program 2005-2010 and FY05
Transportation Budget Frequently Asked Questions. Richmond, VA. Available at: http://www.virginiadot.org/news/newsrelease.asp?ID=CO-syipfaq2.
11 Reese, Barbara, Virginia Department of Transportation Deputy Secretary of Transportation. 2007. Capital Beltway HOT
Lanes PPTA Project In-Principle Business Terms. September, Richmond, VA. Available at: http://www.ctb.virginia.gov/resources/ Item2_CapBeltway_InPrincipleAgreement.pdf.
12 University of Southern California. 2000. Planning & Markets: Highway Construction Costs Under Government Provision.
Los Angeles, CA. Available at: http://www-pam.usc.edu/ volume2/v2i1a3s2.html.
13 Virginia Department of Transportation. 2004. Virginia’s Statewide Multimodal Long-Rage Transportation Plan: Phase 3 and Final Report to the General Assembly. November, Richmond, VA. Available at: http://www.rrregion.org/pdf/tranplan/VTRANS_Phase%203%20Report.pdf
14 Virginia Department of Transportation. 2004. News Release: Six-Year Improvement Program 2005-2010 and FY05
Transportation Budget Frequently Asked Questions. Richmond, VA. Available at: http://www.virginiadot.org/news/newsrelease.asp?ID=CO-syipfaq2.
15 Bacon, James. 2007. The Next Transportation Crisis. Bacon’s Rebellion. July 16, Virginia. Available at:
http://www.baconsrebellion.com/Issues07/07-16/Bacon.php.
16 TRIP. 2007. Virginia’s Future Mobility: An Analysis of the Ability of Virginia’s Transportation System to Meet the State’s Need for Safe and Efficient Mobility. February, Washington, D.C. Available at: http://www.tripnet.org/VirginiaReportFeb2007.pdf.
48
17 Weiss, Eric M. 2007. Virginia Approves Spending For Roads. Washington Post, June 22, B01. Available at:
http://www.washingtonpost.com/wp-dyn/content/article/ 2007/06/21/AR2007062102101_pf.html.
18 Craig, Tim. 2007. Transportation Bill on Verge of Approval. Washington Post, April 4, B01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/2007/ 04/03/AR2007040301776.html.
19 Weiss, Eric M. 2007. Virginia Approves Spending For Roads. Washington Post, June 22, B01. Available at:
http://www.washingtonpost.com/wp-dyn/content/article/ 2007/06/21/AR2007062102101_pf.html. 20 Virginia Department of Transportation. 2007. History Highlights website. Richmond, VA. Available at:
http://www.virginiadot.org/about/vdot_history.asp. 21 Virginia General Assembly. 2007. Legislative Information System website. Available at: http://leg1.state.va.us/.
22 Virginia Department of Transportation. 2007. Public-Private Transportation Act web page. Available at:
http://www.virginiadot.org/business/ppta-default.asp.
23 Ibid
24 KCI Technologies, Inc. with MDTA, MDOT, MD SHA, June 2005. Current Practices in Public-Private Partnerships for Highways. Available at
http://www.mdta.state.md.us/mdta/servlet/dispatchServlet?url=/About/currentpractise.pdf 25 Kozel, Scott. 2007. Roads to the Future: Capital Beltway (I-495 and I-95) webpage. Available at:
http://www.roadstothefuture.com/Capital_Beltway.html.
26 Parsons Project Site. 2007. The Capital Beltway Study Overview webpage. Available at: http://project1.parsons.com/capitalbeltway/New_Overview.htm.
27 Taylor, Jeff. 2003. Will Toll Roads Save our Nation’s Capital? Reasononline. June 10. Available at:
http://www.reason.com/news/show/33613.html. .
28 Mummolo, Jonathan. 2007. A Ranking Writ In Brake Lights: D.C. 2nd in Traffic. Washington Post, September 19, B01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/ 2007/09/18/AR2007091800777.html.
29 George Mason University Center for Regional Analysis. 2003. Commuting Trends and Patterns in the Washington Region.
September 2. Available at: http://www.cra-gmu.org/alerts/Trends5-commuting.doc.
30 Fluor-Transurban, Inc. 2007. Virginia HOT lanes website. Available at: http://www.virginiahotlanes.com/. 31 Mummolo, Jonathan. 2007. A Ranking Writ In Brake Lights: D.C. 2nd in Traffic. Washington Post, September 19, B01.
Available at: http://www.washingtonpost.com/wp-dyn/content/article/ 2007/09/18/AR2007091800777.html.
32 Virginia Department of Transportation. 2003. Capital Beltway HOT Lanes PPTA Proposal Presentation. July 16. Available at: http://198.176.41.25/projects/resources/FinalCTB-HOTLanes.pdf.
33 Capital Beltway Studies website (Last updated September 2007). Traffic Volumes.
Available at http://capitalbeltway.mdprojects.com/nav2c.htm
34 Montgomery County Planning Board. 2001. The Critical Issues of the East-West Connectors. December 13, Silver Spring, MD. Available at: http://www.mc-mncppc.org/board/meetings_archive/01_meeting_archive /agenda_121301/east-west%20final.PDF.
49
35 Poole, Robert and Peter Samuel. 2006. The Return of Private Toll Roads. Public Roads. March/April, Vol. 69, No. 5.
Washington, D.C. Available at: http://www.tfhrc.gov/pubrds/06mar/06.htm. 36 Virginia Department of Transportation. 2007. Projects and Studies website: I95/395 and Route 495 HOV/BUS/HOT
Lanes Project. Available at: http://www.virginiadot.org/ projects/HOT_main.asp.
37 Weiss, Eric M. 2006. Beltway Toll Plan May Need Va. Funds. Washington Post, October 23, A01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/2006 /10/22/AR2006102201081.html.
38 Nash, Betty Joyce. 2006. The End of the “Free” Ride: Tolls bring home the true cost of roads. Region Focus, Federal
Reserve Bank of Richmond. Spring 2006, Richmond, VA. Available at: http://www.richmondfed.com/publications/economic_research/region_focus/ spring_2006/pdf/full_issue.pdf.
39 Virginia Department of Transportation. 2006. News Release: Virginia Signs Interim Agreement with Private Firm to Build
I-95/395 HOT lanes. October 24. Available at: http://www.vdot.virginia.gov/news/ newsrelease.asp?ID=CO-0655.
40 Virginia Division of Legislative Services. Senate Bill 856 in the 1995 General Assembly Session
http://leg1.state.va.us/cgi-bin/legp504.exe?ses=951&typ=bil&val=sb856 41 Galuszka, Peter. 2006. Close Shave. Beacon’s Rebellion. December 11, Virginia. Available at:
http://www.baconsrebellion.com/Roadtoruin/BRNS_06-12-11.php.
42 Virginia Office of the Governor. 2006. Speeches: Testimony Before the U.S. House of Representatives Committee on Transportation and Infrastructure and the Sub-Committee on Highways, Transit and Pipelines. May 24, Washington, D.C. Available at: http://www.governor.virginia.gov/MediaRelations/Speeches/ 2006/TranspoTestimonyCongress.cfm.
43 Reese, Barbara, Virginia Department of Transportation Deputy Secretary of Transportation. 2007. Capital Beltway
HOT Lanes PPTA Project In-Principle Business Terms. September, Richmond, VA. Available at: http://www.ctb.virginia.gov/resources/ Item2_CapBeltway_InPrincipleAgreement.pdf.
44 Brulliard, Karin. 2007. Va. HOT Lane Project to Start Early Next Year. Washington Post, September 10, A01 Available at:
http://www.washingtonpost.com/wp-dyn/content/article/2007/09/09/AR2007090901949.html.
45 Weiss, Eric M. 2006. Beltway Toll Plan May Need Va. Funds. Washington Post, October 23, A01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/2006 /10/22/AR2006102201081.html.
46 Tollroadsnews. 2007. Virginia sec transport Homer says tolls and PPPs vital for mobility, eco growth. May 28, Fredrick,
MD. Available at: http://www.tollroadsnews.com/node/154.
50
Appendix A
Fall 2007 TSPPPA Capstone Class Statement of Work
Project in Conjunction with the National Council for Public-Private Partnerships
Background: The Capital Beltway (I-495) is the main artery that services commuters in the VA/MD/DC metro area. The Beltway has exceeded intended capacity and is now at the center of a growing regional transportation crisis. According to the most recent Texas Transportation Institute report, commuters in the area experience the second-worst congestion in the United States. The need to reduce congestion, increase capacity, offer travel choices, and improve safety is paramount to the successful future of this transportation infrastructure, and the economic vitality of the region. In order to facilitate timely improvements to the Capital Beltway, Virginia has entered into a public-private partnership while Maryland is still studying its available options. Problem Definition: In response to this growing crisis, Virginia is partnering with Fluor-Transurban, a private sector company, to develop High Occupancy Toll Lanes (HOT) on its side of the Beltway. Under this public-private partnership (PPP), Virginia will retain ownership and oversight of the lanes, while Fluor-Transurban will construct, operate, facilitate maintenance and provide the bulk of financing for the project. Many officials in VA have expressed satisfaction with this approach, studies have found cost savings, and PPP projects have typically spurred additional economic activity and freed up valuable state resources for other transportation needs. Maryland has conducted extensive research on congestion pricing for its highways and has thoroughly reviewed the feasibility of partnering with the private sector to finance highway construction projects. Maryland plans to introduce Express Toll Lanes (ETL) in various parts of the state but intends on using its existing highway financing methods to improve, maintain, and build highway infrastructure. As of now, Maryland does not have any approved construction plans for its side of the Beltway. Research Questions: The research team’s mission is to study and examine the issue in an objective fashion, providing key findings and recommendations to the National Council for Public Private Partnerships (NCPPP). The team will address the following research questions:
1. To what extent and how have Virginia and Fluor-Transurban satisfied NCPPP’s six criteria for a successful public-private partnership with their effort to add capacity to the Capital Beltway? What areas do they need to improve on, if any?
2. What are the key challenges and obstacles Maryland faces for building additional highway lanes on their portion of the Capital Beltway?
3. If Maryland decides to pursue widening the Capital Beltway, do the conditions exist for
Maryland to use a public private partnership to finance, build, maintain and operate the additional lanes? If not, what are the necessary conditions in Maryland for a public private partnership to be a viable option?
51
Criteria: We will use NCPPP’s criteria for successful public-private partnerships to analyze the extent to which Virginia and Flour-Transurban have worked together for the benefit of the Commonwealth and citizens.
1) Political Leadership
Is there commitment from "the top" of the organization? Does the state governor support PPPs? Is he/she well informed? Does the legislature support PPPs? Is there a statutory foundation for the implementation of a PPP?
2) Public Sector Involvement
Does the public sector remain actively involved in the project? How often do the partners manage the performance of the partnership? Is this specified in the business plan?
3) A Well Thought-Out Plan
Does each side know what to expect of the partnership beforehand? Did an outside expert help develop the plan? Does the contract clearly detail the responsibilities of the public and private partner? Is there a method for dispute resolution? The state will effectively monitor and evaluate the project; deter cost-overruns,
delays and takes corrective action, when required Who is bearing the main financial risk for the project?
o Is there an understanding of who has that risk? 4) A Dedicated Income Stream
Is there a means of repayment of the investment over the long term of the partnership
What is the source of the income stream? Is the income stream assured for the length of the partnership?
5) Communications with Stakeholders
Who are the stakeholders? Do both partners communicate openly and candidly with the stakeholders to
minimize potential resistance to establishing a partnership? 6) Selecting the Right Partner
Is the selected partner offering the “best value”? What is the private partner’s experience in the area of PPPs?
52
Methodology and Data Analysis – At the request of the National Council for Public Private Partnerships, the team will conduct academic research and consult with stakeholders in order to obtain the necessary information to complete the project. The research team will utilize the following data collection techniques:
Literature Review – Collect and analyze literature available from a wide variety of sources
including but not limited to periodicals, academic databases, historical bodies of academic work and relevant agency data.
Interviews/Visits – Reach out to current and formal officials in both Virginia and Maryland
state governments with a special interest in transportation department management. Seek out the opinions and insight of advocacy groups on both sides of the issue. We may report our analysis of information gleaned from the interviews, but none of the information will be attributed.
Survey – The research team is considering surveying Virginia and/or Maryland legislators to
supplement the interviews. Results and Recommendations – The research team will collect the necessary quantitative and qualitative data in order to answer the proposed research questions, present key findings, and make recommendation to NCPPP on how to proceed with promoting highway related public- private partnerships in Maryland. The team will exhibit its results through a comprehensive and analytical research paper. The final product will objectively assess Virginia’s PPP with Flour-Transurban and analyze Maryland’s options to finance the expansion of the Beltway. The team will present its final product and make an oral presentation to the NCPPP staff in December 2007.
53
Appendix B
National Council for Public-Private Partnerships:
KEYS TO SUCCESSFUL PUBLIC-PRIVATE PARTNERSHIPS There are six critical components of any successful Public-Private Partnership (PPP). While there is not a set formula or an absolute foolproof technique in crafting a successful PPP, each of these keys is involved in varying degrees. POLITICAL LEADERSHIP: A successful partnership can result only if there is commitment from "the top". The most senior public officials must be willing to be actively involved in supporting the concept of PPPs and taking a leadership role in the development of each given partnership. A well-informed political leader can play a critical role in minimizing misperceptions about the value to the public of an effectively developed partnership. Equally important, there should be a statutory foundation for the implementation of each partnership. PUBLIC SECTOR INVOLVEMENT: Once a partnership has been established, the public-sector must remain actively involved in the project or program. On-going monitoring of the performance of the partnership is important in assuring its success. This monitoring should be done on a daily, weekly, monthly or quarterly basis for different aspects of each partnership (the frequency is often defined in the business plan and/or contract). A WELL THOUGHT-OUT PLAN: You must know what you expect of the partnership beforehand. A carefully developed plan (often done with the assistance of an outside expert in this field) will substantially increase the probability of success of the partnership. This plan most often will take the form of an extensive, detailed contract, clearly describing the responsibilities of both the public and private partners. In addition to attempting to foresee areas of respective responsibilities, a good plan or contract will include a clearly defined method of dispute resolution (because not all contingencies can be foreseen). A DEDICATED INCOME STREAM: While the private partner may provide the initial funding for capital improvements, there must be a means of repayment of this investment over the long term of the partnership. The income stream can be generated by a variety and combination of sources (fees, tolls, shadow tolls, tax increment financing, or a wide range of additional options), but must be assured for the length of the partnership. COMMUNICATIONS WITH STAKEHOLDERS: More people will be affected by a partnership than just the public officials and the private-sector partner. Affected employees, the portions of the public receiving the service, the press, appropriate labor unions and relevant interest groups will all have opinions, and frequently significant misconceptions about a partnership and its value to all the public. It is important to communicate openly and candidly with these stakeholders to minimize potential resistance to establishing a partnership. SELECTING THE RIGHT PARTNER: The "lowest bid" is not always the best choice for selecting a partner. The "best value" in a partner is critical in a long-term relationship that is central to a successful partnership. A candidate's experience in the specific area of partnerships being considered is an important factor in identifying the right partner. The listing of NCPPP members (provided under Council Members on this site) provides a logical starting point for the identification of potential partners or services that might be required in the development of a partnership.
54
Appendix C
Capital Beltway HOT lanes in-principle agreement September 2007 The Commonwealth of Virginia and its private partners, Fluor and Transurban, have reached an in-principle agreement for the design, construction, operation and maintenance of the Capital Beltway HOT lanes. VDOT and Fluor-Transurban plan to finalize the agreement over the coming months, with financial close expected by the end of the calendar year. The in-principle agreement requires Fluor-Transurban to do the following:
• Finance and build a 14-mile stretch of HOT lanes (two lanes in each direction) on the Capital Beltway, based on a fixed-price, fixed-time design-build contract
• Take responsibility for the cost and management of all operations and maintenance of the HOT lanes for a period of 75 years following completion of construction
• Share revenues with the Commonwealth if the facility exceeds expectations
• Impose congestion toll pricing to ensure free flow traffic conditions
• Ensure that HOV vehicles, transit and commuter buses travel for free
• Return the HOT lanes to the Commonwealth in good order at the end of the agreement. The Commonwealth of Virginia will:
• Retain ownership and oversight of the HOT lanes
• Provide a financial grant to the project to support the construction of key elements including the final phase of the Springfield Interchange, improvements to the I-66 interchange, and reconstruction of a number of adjacent bridges and overpasses
• Provide police and emergency services to the project
• Maintain control of the HOT lanes should the lanes be required during an emergency evacuation.
Financing the Capital Beltway HOT lanes project Construction and operation of the Capital Beltway HOT lanes project is being financed through a partnership between the public and private sectors. By working together, the Commonwealth of Virginia and its private partners, Fluor and Transurban, will deliver traffic congestion relief on the Beltway much earlier, and at less cost to Virginia taxpayers, than if the improvements were solely funded by the Commonwealth from traditional revenue sources. Under the proposed agreement with the Commonwealth, Fluor-Transurban will operate, maintain, and improve the Capital Beltway HOT lanes for a period of 75 years, once the lanes are open to traffic.
55
The total project cost will be approximately $1.7 billion, with funding provided from the following sources:
• $1.3 being a combination of up-front equity, bonds and loans provided and sourced by Fluor-Transurban
• $157 contribution to the project by the Commonwealth of the Virginia from the Transportation Partnership Opportunity Fund
• An additional $242 million in federal and state funding allocated to components of the project under VDOT’s Six Year Improvement Plan, including Phase VIII of the Springfield Interchange and enhancements to the I-66 Interchange.
Fluor-Transurban will pay for operation and maintenance of the HOT lanes, as well as repaying all financing (bonds and loans) costs, through toll revenues generated by the project. It will also be responsible for:
• Development and operation of the electronic toll and traffic management system
• Routine and preventative maintenance, and incident response services
• Major maintenance, repairs and required capital improvements Toll revenues must first be used to pay these costs, before Fluor-Transurban is permitted to make a return on their investment in the project. Sharing in project revenues Under the proposed agreement, VDOT will be entitled to receive a share of toll revenues in the event the project revenues exceed expectations. The share will range between 5% and 30% of gross toll revenue, based on a series of return benchmarks established at financial close. Should VDOT require Fluor-Transurban to make enhancements to the project, Fluor-Transurban will pay VDOT 50% of any net positive revenue impact. For more information visit www.virginiahotlanes.com.
# # #
56
This short survey is intended for Maryland State Senators and Delegates. For staff members that reply, please have your responses reflect that of your Senator/Delegate.
- Your answers will be completely anonymous. - Please answer all the questions candidly. - The survey should not take more than 5 minutes. - THANK YOU for your help in this important academic research.
1. In general, how effective do you feel the following providers are in delivering highway transportation services and infrastructure?
2. Please rate, in your opinion, the overall effectiveness of the following organizations.
3. Please rate your general knowledge level in the following subject areas.
Completely
Ineffective
Somewhat
ineffectiveNeutral Very Effective
Completely
Effective
Public sector nmlkj nmlkj nmlkj nmlkj nmlkj
Private sector nmlkj nmlkj nmlkj nmlkj nmlkj
Public-private
partnershipsnmlkj nmlkj nmlkj nmlkj nmlkj
Completely
Ineffective
Somewhat
IneffectiveNeutral Very Effective
Completely
Effective
Maryland Department of
Transportationnmlkj nmlkj nmlkj nmlkj nmlkj
Maryland Transportation
Authoritynmlkj nmlkj nmlkj nmlkj nmlkj
State Highway
Administrationnmlkj nmlkj nmlkj nmlkj nmlkj
Maryland Transit
Administrationnmlkj nmlkj nmlkj nmlkj nmlkj
Maryland Port
Administrationnmlkj nmlkj nmlkj nmlkj nmlkj
Motor Vehicle
Administrationnmlkj nmlkj nmlkj nmlkj nmlkj
Maryland Aviation
Administrationnmlkj nmlkj nmlkj nmlkj nmlkj
Not at all knowledgeable Somewhat Knowledgeable Extremely knowledgeable
Public-private
partnershipsnmlkj nmlkj nmlkj
Highway financing nmlkj nmlkj nmlkj
Highway construction nmlkj nmlkj nmlkj
Appendix D
57
4. To what extent do you support using the following revenue sources for new constuction on Maryland's interstate system?
5. If additional revenue for transportation infrastructure is necessary, what do you MOST prefer the State use to generate that money?
6. If additional revenue for transportation infrastructure is necessary, what do you LEAST prefer the state use to generate that money?
7. Please RANK (with 1 being the most important and 4 the least important) the following service attributes when implementing transportation infrastructure projects.
Do not support Somewhat support Completely support Do not know
Corporate income taxes nmlkj nmlkj nmlkj nmlkj
Motor fuel tax nmlkj nmlkj nmlkj nmlkj
MVA fees and taxes nmlkj nmlkj nmlkj nmlkj
Tolls nmlkj nmlkj nmlkj nmlkj
Bonds nmlkj nmlkj nmlkj nmlkj
Entering a public-private
partnershipnmlkj nmlkj nmlkj nmlkj
Corporate income taxes
Motor fuel tax
MVA fees and taxes
Tolls
Bonds
nmlkj
nmlkj
nmlkj
nmlkj
nmlkj
Other (please specify)
nmlkj
Corporate income taxes
Motor fuel tax
MVA fees and taxes
Tolls
Bonds
nmlkj
nmlkj
nmlkj
nmlkj
nmlkj
Other (please specify)
nmlkj
1 2 3 4
Cost to the consumer nmlkj nmlkj nmlkj nmlkj
Cost to the state nmlkj nmlkj nmlkj nmlkj
Timely delivery nmlkj nmlkj nmlkj nmlkj
Quality of product nmlkj nmlkj nmlkj nmlkj
Appendix D
58
8. Please RANK (with 1 being the most important and 6 the least important) your opinion of the following criteria in establishing a successful public-private partnership.
9. What is your level of concern regarding the following issues in the use of public-private partnerships to finance highways?
10. What do you think Maryland should do to relieve congestion on the I-495 Capital Beltway?
11. If Maryland decides to build extra highway lanes and institute some form of electronic tolling on the I-495 Capital Beltway, do you think the state should seek out a public-private partnership?
1 2 3 4 5 6
Political leadership nmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Public sector
involvementnmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Having a well thought
out business plannmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Dedicated income
streamnmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Communication with
stakeholdersnmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Selecting the right
partnernmlkj nmlkj nmlkj nmlkj nmlkj nmlkj
Not at all concerned Somewhat concerned Completely concerned Do not know
Lack of accountability
and public sector
oversight
nmlkj nmlkj nmlkj nmlkj
Uncontrolled toll prices nmlkj nmlkj nmlkj nmlkj
Private companies are
too profit drivennmlkj nmlkj nmlkj nmlkj
Union participation nmlkj nmlkj nmlkj nmlkj
Foreign investment nmlkj nmlkj nmlkj nmlkj
Build extra highway lanes, but without tolls
Build extra highway lanes and institute some form of electronic toll pricing
Replicate Virginia's HOT Lane plan for its side of the Beltway
Nothing...leave as is
nmlkj
nmlkj
nmlkj
nmlkj
Other (please specify)
nmlkj
Yes
No
I need more information before I can say
Undecided
nmlkj
nmlkj
nmlkj
nmlkj
Appendix D
59
12. What is your political affiliation?
13. What is your position within the Maryland General Assembly?
14. How long have you served in the Maryland General Assembly?
15. Is there anything else you would like to share with us regarding public-private partnerships, Maryland transportation infrastructure, or the I-495 Capital Beltway?
Democrat
Republican
Independent
Other
nmlkj
nmlkj
nmlkj
nmlkj
Delegate
Senator
Senior staff member from Delgate's office
Senior staff member from Senator's office
nmlkj
nmlkj
nmlkj
nmlkj
Other (please specify)
nmlkj
Less than 1 year
Between 1-5 years
Between 6-10 years
Greater than 10 years
nmlkj
nmlkj
nmlkj
nmlkj
Appendix D
60
Appendix E
61
Appendix E
62
Appendix E
63
Appendix F
References
American Automobile Association. 2006. Transportation Omnibus “Pockets of Pain” Survey. November. Available at: http://www.aaaexchange.com/Assets/Files/ 20061251637530.TransportationOmnibusFinalReport.pdf.
Aument, Jennifer and Barbara Brown. 2007. Public-Private Partnerships for the Capital Beltway HOT
Lanes. Presented to Women in Transportation. November 15, Ruth Chris Steak House, Crystal City, VA.
Brulliard, Karin. 2007. Va. HOT Lane Project to Start Early Next Year. Washington Post, September 10,
A01 Available at: http://www.washingtonpost.com/wp-dyn/content/article/2007/09/09/AR2007090901949.html.
Buxbaum, Jeffrey N. and Iris N. Ortiz. 2007. Protecting the Public Interest: The Role of Long-Term Concession
Agreements for Providing Transportation Infrastructure. Cambridge Systematics, Inc. Cambridge, MA, June. Available at: http://www.camsys.com/ pubs/Protecting%20the%20Public%20Interest-Report.pdf.
Craig, Tim. 2007. Transportation Bill on Verge of Approval. Washington Post, April 4, B01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/2007/04/03/AR2007040301776.html.
Department of Legislative Services Office of Policy Analysis. 2007. Maryland Department of
Transportation Fiscal 2008 Budget Overview. Annapolis, MD. Available at: http://mlis.state.md.us/2007rs/budget_docs/All/Operating/J00_-_Maryland_Department_of_Transportation_Overview.pdf.
Editorial. 2006. The Driver’s Seat in Maryland; Any volunteers to be the ‘transportation governor’?
Washington Post, October 23, A20. Fluor-Transurban, Inc. 2007. Virginia HOT lanes website. Available at:
http://www.virginiahotlanes.com/. Galuszka, Peter. 2006. Close Shave. Beacon’s Rebellion. December 11, Virginia. Available at:
http://www.baconsrebellion.com/Roadtoruin/BRNS_06-12-11.php. George Mason University Center for Regional Analysis. 2003. Commuting Trends and Patterns in the
Washington Region. September 2. Available at: http://www.cra-gmu.org/alerts/Trends5-commuting.doc.
Gilroy, Leonard, Robert W. Poole, Jr., Peter Samuel, and Geoffrey Segal. Building New Roads
through Public-Private Partnerships: Frequently Asked Questions. Policy Study 58. Available at: http://www.reason.org/pb58_building_new_roads.pdf.
64
Gilroy, Leonard. 2007. Loosening the Beltway: Tolls, Private-Sector Innovations Will Ease I-495 Gridlock and Benefit Taxpayers. Available at: http://www.reason.org/commentaries/ gilroy_20070917.shtml
Groat, Gary. 2007. Public Testimony: Pennsylvania Republican Policy Committee Public Hearing
Testimony. October 18. Harrisburg, PA. Groat, Gary. 2007a. Network Futurevision. Roads & Bridges. September. Available at:
http://www.roadsbridges.com/rb/index.cfm/powergrid/rfah=%7Ccfap=/CFID/2380832/CFTOKEN/53332730/fuseaction/showArticle/articleID/7300.
Hubert H. Humphrey Institute of Public Affairs. 2006. I-394 MnPASS – A New Choice for Commuters: How is it Working? Rethinking Transportation Finance Roundtable. March 23, Coffman Memorial Union, University of Minnesota. Available at: http://www.hhh.umn.edu/img/assets/20844/394_MnPass_roundtable.pdf.
KCI Technologies, Inc. 2005. Current Practices in Public-Private Partnerships for Highways. July. Hunt Valley, MD. Available at http://www.i270corridorp3.com/images/ prjtinfo/current_practices/dispatchServlet.pdf.
. Kiviat, Barbara. 2007. Who Really Owns the Roads? Time. Website publication, Available at:
http://www.time.com/time/magazine/article/0,9171,1673288,00.html. Korr, Jeremy L. 2004. Memory Lanes. Washington Post, August 15, B02. Kozel, Scott. 2007. Roads to the Future: Capital Beltway (I-495 and I-95) webpage. Available at:
http://www.roadstothefuture.com/Capital_Beltway.html. Lloyd, Christopher D. 2005. Society for Marketing Professional Services – DC Chapter “Public
Private Partnerships – Are They Worth Getting Pursuing? How Do I Get Involved?” March 10. Available at: http://www.mwcllc.com/publications/SMPS_conference.pdf.
Maryland Office of the Governor. 2007. Speeches by Governor Martin O’Malley. Washington Board of
Trade: Building Maryland’s Transportation Infrastructure. Annapolis, MD, June 28. Available at: http://www.governor.maryland.gov/speeches/070628-WashBoardTrade.html.
Maryland Department of Legislative Services. 2007. Fiscal and Policy Note: Transportation Facilities – Public-Private Partnerships. House Bill 662. Available at: http://mlis.state.md.us/2007RS/fnotes/bil_0002/hb0662.pdf.
Maryland Department of Legislative Services, Office of Policy Analysis. 2006. The Road to Privatization: Implications of Public-Private Partnerships for Transportation Projects: Analysis of the FY 2008 Maryland Executive Budget, 2007. December, Annapolis, MD. Available at: http://dlslibrary.state.md.us/publications/OPA/I/RPIPPPTP_2006.pdf.
Maryland Department of Transportation. 2007. Maryland’s 2007-2012 Consolidated Transportation Plan.
Hanover, MD. Available at: http://www.mdot.state.md.us/Planning/ Plans%20Programs%20Reports/Programs/CTP%2007-
65
12/Cover_ToC/Table%20of%20Contents.
Maryland Department of Transportation. 2004. A Blueprint for Maryland’s Transportation Future. Hanover, MD. Available at: http://www.mdot.state.md.us/Planning/ Plans%20Programs%20Reports/Reports/MTP/Final%202004%20MTP.pdf.
Maryland Department of Transportation, Maryland Transportation Authority. 2007. Transportation Public-Private Partnerships Guidelines (TP3). Hanover, MD. Available at: http://www.mdot-realestate.org/docs/tp3guidelines.pdf.
Maryland Department of Transportation, Maryland Transportation Authority. 2007a. Transportation
Public-Private Partnerships Guidelines (TP3) website. Baltimore, MD. Available at: http://www.mdta.state.md.us/mdta/servlet/dispatchServlet?url=/About/tp3overview.jsp.
Maryland Department of Transportation, Maryland Transportation Authority. 2007b. Transportation
Facilities – Public-Private Partnerships; Digest of HB 662. March, Baltimore, MD. Maryland Department of Transportation, Maryland Transportation Authority. 2005. Planning for the
Future: Maryland Transportation Authority Strategic Plan. Baltimore, MD. Available at: http://www.mdta.state.md.us/mdta/About/StrategicPlan.pdf
Maryland Department of Transportation, State Highway Administration. 2007. Capital Beltway Study.
Hanover, MD. Available at: http://capitalbeltway.mdprojects.com. Montgomery County Planning Board. 2001. The Critical Issues of the East-West Connectors.
December 13, Silver Spring, MD. Available at: http://www.mc-mncppc.org/board/meetings_archive/01_meeting_archive /agenda_121301/east-west%20final.PDF.
Morgan, Herbert W. 2003. Fluor Daniel. Capital Beltway HOT Lanes Detailed Proposal. Fluor Daniel.
October. Richmond, VA. Available at: http://www.virginiadot.org/business/resources/FLUOR_Capital_Beltway_HOT_Lanes_Proposal_8MB.pdf.
Mummolo, Jonathan. 2007. A Ranking Writ In Brake Lights: D.C. 2nd in Traffic. Washington Post, September 19, B01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/ 2007/09/18/AR2007091800777.html.
Nash, Betty Joyce. 2006. The End of the “Free” Ride: Tolls bring home the true cost of roads. Region
Focus, Federal Reserve Bank of Richmond. Spring 2006, Richmond, VA. Available at: http://www.richmondfed.com/publications/economic_research/region_focus/ spring_2006/pdf/full_issue.pdf.
National Chamber Foundation and Cambridge Systematics, Inc. Future Highway and Public Transportation Finance. Phase I: Current Outlook and Short-Term Solutions. Executive Summary. 2005. Washington, D.C. Available at: http://www.camsys.com/pubs/ChamberExecSummary.pdf.
66
The National Council for Public-Private Partnerships. 2007. How Partnerships Work. Washington, D.C. Available at: http://www.ncppp.org/howpart/index.shtml#define.
The National Council for Public-Private Partnerships. 2007a. The National Counsel for Public-Private
Partnerships website. Washington, D.C. Available at: http://www.ncppp.org/. Orange County Department of Transportation. 91 Express Lanes 2006 Report. Orange County, CA.
Available at: http://www.91expresslanes.com/generalinfo/91annualreport.pdf. Orlin, Glenn. 2007. Memorandum to Montgomery County Council members: Maryland Department
of Transportation (MDOT) Annual Tour Meeting. October 1, Montgomery County, MD. Available through Maryland DOT.
Parsons Project Site. 2007. The Capital Beltway Study Overview webpage. Available at:
http://project1.parsons.com/capitalbeltway/New_Overview.htm. Peter, Samuel and Robert W. Poole, Jr. Leasing State Toll Roads: Frequently Asked Questions.
Policy Study 60. Available at: http://www.reason.org/pb58_building_new_roads.pdf. Poole, Robert and Peter Samuel. 2006. The Return of Private Toll Roads. Public Roads. March/April,
Vol. 69, No. 5. Washington, D.C. Available at: http://www.tfhrc.gov/pubrds/06mar/06.htm. Reese, Barbara, Virginia Department of Transportation Deputy Secretary of Transportation. 2007.
Capital Beltway HOT Lanes PPTA Project In-Principle Business Terms. September, Richmond, VA. Available at: http://www.ctb.virginia.gov/resources/ Item2_CapBeltway_InPrincipleAgreement.pdf.
Sacks, Margaret. 2007. Capital Beltway High Occupancy Toll Lanes – A Public Private Partnership
Response to Northern Virginia Congestion. 25 April. Washington, D.C. Savas, E. S. 2000. Privatization and Public Private Partnerships. New York: Chatham House.
Taylor, Jeff. 2003. Will Toll Roads Save our Nation’s Capital? Reasononline. June 10. Available at:
http://www.reason.com/news/show/33613.html.
Texas Transportation Institute. 2007. 2007 Annual Urban Mobility Report. College Station, Tx. Available at: http://mobility.tamu.edu/ums/.
Tollroadsnews. 2007. Agreement reached on terms for investor financing of 3/4ths of cost of Virginia’s
Capital Beltway HOT lanes. Frederick, MD, September 10. Available at: http://www.tollroadsnews.com/node/3125.
Tollroadsnews. 2007a. Virginia sec transport Homer says tolls and PPPs vital for mobility, eco growth.
May 28, Fredrick, MD. Available at: http://www.tollroadsnews.com/node/154. TRIP. 2007. Virginia’s Future Mobility: An Analysis of the Ability of Virginia’s Transportation System
to Meet the State’s Need for Safe and Efficient Mobility. February, Washington, D.C. Available at: http://www.tripnet.org/VirginiaReportFeb2007.pdf.
67
University of Southern California. 2000. Planning & Markets: Highway Construction Costs Under
Government Provision. Los Angeles, CA. Available at: http://www-pam.usc.edu/ volume2/v2i1a3s2.html.
U.S. Department of Transportation, Federal Highway Administration. 2007. Analysis for PPP
Legislation in Maryland web page. Available at: http://www.fhwa.dot.gov/ ppp/legis_maryland.htm.
U.S. Department of Transportation, Federal Highway Administration, 2007a. PPPs Defined.
Available at: http://www.fhwa.dot.gov/ppp/defined.htm.
U.S. Department of Transportation, U.S. Federal Highway Administration. 2007b. Public Private Partnerships: Options web page. Washington, D.C. Available at: http://www.fhwa.dot.gov/PPP/.
U.S. Department of Transportation, U.S. Federal Highway Administration. 2007c. PPP Case Studies:
Dulles Greenway. Washington, D.C. Available at: http://www.fhwa.dot.gov/ PPP/dulles.htm. U.S. Department of Transportation, Federal Highway Administration. 2006. Public-Private Partnerships
website on Legislation. August, Washington, D.C. Available at: http://www.fhwa.dot.gov/ppp/legis_maryland.htm.
U.S. Department of Transportation, Federal Highway Administration and AECOM Consult Team.
2006a. Issues and Options for Increasing the Use of Tolling and Pricing to Finance. Fairfax, VA, June 9. Available at: http://ncppp.org/resources/papers/tollissuesreport606.pdf.
U.S. Department of Transportation, Federal Highway Administration. Manual for Using Public-Private
Partnerships on Highway Projects. Washington, D.C. Available at: http://www.fhwa.dot.gov/ppp/manual_0905.pdf.
Virginia Department of Transportation. 2007. Bulletin. January-February. Vol. 73, No. 1. Richmond,
VA. Available at: http://www.virginiadot.org/about/bulletin/2007/Jan-Feb/default.asp. Virginia Department of Transportation. 2007a. Commonwealth Announces Agreement for Capital
Beltway HOT Lanes. September 10, Richmond, VA. Available at: http://www.virginiadot.org/news/newsrelease.asp?ID=CO-0742.
Virginia Department of Transportation. 2007b. History Highlights website. Richmond, VA. Available
at: http://www.virginiadot.org/about/vdot_history.asp.
Virginia Department of Transportation. 2007c. Memorandum: Recommended Business Terms for the Capital Beltway High Occupancy Lanes Comprehensive Agreement. September 5, Richmond, VA. Available at: http://www.virginiahotlanes.com/documents/ Recommended%20Business%20Terms%20Memo.pdf.
68
Virginia Department of Transportation. 2007d. Public-Private Transportation Act web page. Available at: http://www.virginiadot.org/business/ppta-default.asp.
Virginia Department of Transportation. 2007e. Projects and Studies website: I95/395 and Route 495
HOV/BUS/HOT Lanes Project. Available at: http://www.virginiadot.org/ projects/HOT_main.asp.
Virginia Department of Transportation. 2007f. Projects and Studies: Six-Year Improvement Plan Frequently Asked Questions. Richmond, VA. Available at: http://www.virginiadot.org/projects/syp-faq.asp.
Virginia Department of Transportation. 2007g. Workforce Transformation webpage. Richmond, VA.
Available at: http://www.virginiadot.org/about/cj_transforming.asp. Virginia Department of Transportation. 2006. News Release: Virginia Signs Interim Agreement with
Private Firm to Build I-95/395 HOT lanes. October 24. Available at: http://www.vdot.virginia.gov/news/ newsrelease.asp?ID=CO-0655.
Virginia Department of Transportation. 2005. Public-Private Proposals to Build I-95 High Occupancy
Toll Lanes in Northern Virginia and Fredericksburg Move to Next Stage of Review. January, 20. Available at: http://www.vdot.virginia.gov/news/ newsrelease.asp?ID=CO-0501.
Virginia Department of Transportation. 2004. News Release: Six-Year Improvement Program 2005-2010 and FY05 Transportation Budget Frequently Asked Questions. Richmond, VA. Available at: http://www.virginiadot.org/news/newsrelease.asp?ID=CO-syipfaq2.
Virginia Department of Transportation. 2004a. Virginia’s Statewide Multimodal Long-Rage Transportation Plan: Phase 3 and Final Report to the General Assembly. November, Richmond, VA. Available at: http://www.rrregion.org/pdf/tranplan/ VTRANS_Phase%203%20Report.pdf.
Virginia Department of Transportation. 2003. Capital Beltway HOT Lanes PPTA Proposal
Presentation. July 16. Available at: http://198.176.41.25/projects/resources/FinalCTB-HOTLanes.pdf.
Virginia Department of Transportation, Fluor, Inc. and Transurban, Inc. 2005. Comprehensive Agreement to
Develop, Design, Finance, Construct, Maintain, and Operate the Route 495 HOT Lanes in Virginia. April, 28, Richmond, VA. Available at: http://www.virginiahotlanes.com/documents/ Comprehensive%20Agreement.pdf.
Virginia General Assembly. 2007. Legislative Information System website. Available at: http://leg1.state.va.us/.
Virginia Office of the Governor. 2006. Speeches: Testimony Before the U.S. House of Representatives
Committee on Transportation and Infrastructure and the Sub-Committee on Highways, Transit and Pipelines. May 24, Washington, D.C. Available at: http://www.governor.virginia.gov/MediaRelations/Speeches/ 2006/TranspoTestimonyCongress.cfm.
69
Weiss, Eric M. 2007. Virginia Approves Spending For Roads. Washington Post, June 22, B01. Available at: http://www.washingtonpost.com/wp-dyn/content/article/ 2007/06/21/AR2007062102101_pf.html.
Weiss, Eric M. 2006. Beltway Toll Plan May Need Va. Funds. Washington Post, October 23, A01.
Available at: http://www.washingtonpost.com/wp-dyn/content/article/2006 /10/22/AR2006102201081.html.
70