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Rt. 460 Proposals Remain Despite Ruling of MPO

Mon November 06, 2006 - National Edition
Angela B. Hurni

The Virginia Transportation Act has listed a section of Virginia’s Route 460 between Petersburg and Suffolk as a “High Priority Corridor” since 2000.

Over the years, the U.S. Route 460 Corridor Improvement Project has at times seemed likely to move forward and at other times seemed likely to be an impossible dream. The scenarios envisioned for improvements to the route all come down to one thing: money.

Improvements to Route 460 are being considered under the Public-Private Transportation Act (PPTA). While the Virginia Department of Transportation (VDOT) solicited proposals from the private sector for work on the route in February and received three conceptual proposals in September, the setback herein remains with the “public” aspect of the PPTA proposals.

In mid-October the Metropolitan Planning Organization (MPO), a regional planning group, voted to exclude the project from its 20-year long-range transportation plan. The government uses the MPO to determine federal funding.

“If the MPO doesn’t endorse a project, federal funding becomes more difficult,” said Jeff Caldwell, assistant director of public affairs of VDOT.

After reviewing decisions made by Virginia’s General Assembly in the regular and special sessions this year, the MPO discovered there wasn’t enough funding to include the Route 460 Corridor Improvement project in its future plans. Without funding from the General Assembly, the project needs more private-sector money to proceed.

VDOT solicited proposals for Route 460 under the PPTA, rather than having contractors bid on the project, because of this lack of public funds.

“VDOT sought private-sector partners to build Route 460 because there is no state money in our six-year program to complete this project,” Caldwell said. “Our goal was to solicit private-sector financing and design expertise to advance this project.”

VDOT received proposals to develop and operate a new Route 460 from three private-sector firms: Virginia Corridor Partners (VCP), Itinere, and Cintra 460. VCP is made up of several companies including Macquarie Investment Holdings Inc., Skanska Infrastructure Development, Tidewater Skanska Inc., Lane Construction Company, DMJM Harris and Morgan Stanley/Morgan Keegan. Itinere consists of Itinere Infraestructuras S.A., Sacyr S.A.U., Clark Construction Group Inc., Shirley Contracting Company, Lois Berger Group Inc. and CitiGroup. Cintra 460 is comprised of Cintra US Corp., Cintra, Ferrovial Agroman S.A. and Earth Tech.

Proposals for the U.S. Route 460 Corridor Improvement Project are based on the development, construction, operation and maintenance of a new 55-mi. (88.5 km) four-lane divided limited access highway with nine interchanges. The roadway would be built south of the existing Route 460 from I-295 in Prince George County to Route 58 in Suffolk.

The design-build price in the proposals ranges from $1.05 billion to $1.55 billion in current-year figures. The proposals also indicated preliminary toll rates for passenger vehicles, consistent with the Route 460 Toll Feasibility Study, between seven cents and 24 cents per mile. Public-funding requests that were incorporated in the proposals range from $600 million to $2 billion, which includes right-of-way costs and toll facility costs.

Now that VDOT has accepted the three conceptual proposals, it will review them to make sure each complies with applicable requirements. Those that meet the requirements will proceed to the Independent Review Panel stage of procurement.

Even though the MPO voted to remove Route 460 from its long-range plan and withdraw its support at this time, VDOT still wants to keep this project moving forward.

“The project is continuing in order to keep that project on the books,” Caldwell said, in hopes that funding will appear at a later date. “The challenge will be if it is not in the long-range plan, keeping the private sector on board,” because VDOT wants it to go forward.

Toll collecting is a major aspect of all of the proposals. This is because the private-sector partner will receive a return on its investment through toll collecting.

“This has been done in several other areas of the state as we have completed projects under the Public-Private Transportation Act of 1995,” explained Caldwell.

However, the reliance on tolls in the three proposals was one big factor behind the MPO’s decision to cut Route 460 from the long-range plan. Arthur Collins, executive director of the Hampton Roads Planning District Commission, which staffs the MPO, confirmed this: “Tolls alone would not cover the cost.”

He also said the toll feasibility study showed only 29 percent of the money for the project in the proposals would come from tolls, and “the rest had to be public money from another source.”

Virginia Gov. Tim Kaine made a similar point in a May 2006 speech to the United States House Committee on Transportation and Infrastructure.

“We believe that public-private partnerships, primarily through tolling, could address up to 20 percent of our long-term highway needs, ” he said.

Kaine reiterated the fact that tolls alone cannot cover a PPTA project: “However, we cannot, and should not, ignore the remaining 80 percent of unmet needs.”

Another deciding factor in the MPO’s vote to exclude Route 460 was the overall lack of funding proposed by the three companies.

According to Collins, “We’ve been waiting 10 years to come up with the money — they didn’t come up with it.”

The reasons vary as Collins dissected each of the proposals: VCP’s proposal wasn’t specific enough about from where the money would come; Itinere’s proposed money source was not available; and Cintra 460’s reliance on state funding that doesn’t exist.

“We felt [they] didn’t meet the fiscal strength tests,” Collins said. “All we got on the three PPTAs was a summary of financial tabs that are proprietary. They didn’t indicate there is a way to fund 460.”

However, none of this means that the proposals are scrapped. On the contrary, the companies can continue promoting their proposals and environmental work and negotiations will continue.

“We will put it back in the plan if someone can demonstrate a way to pay [for the Route 460 improvements],” Collins said.

Another solution wished-for by Collins: “The Virginia General Assembly is going to have to add money for our roads.” He pointed out that 1987 was the last time Virginia raised taxes for transportation and that the gas tax in Virginia is 12 cents less than in North Carolina.

The firms that submitted the proposals are remaining optimistic and will continue supporting their proposals. VCP’s Project Manager Bill DuVall said, “We will continue to seek that job and negotiate any possible solution.”

As to what differentiates his firm’s proposal from the two other similar ones, he said, “Our local presence is the thing that sets us apart.”

Javier Tamargo, project manager of Cintra 460, believes his firm’s proposal is unique because, “we have identified the value of that corridor and have submitted to VDOT a range of possibilities.”

As a result, Cintra 460 has given VDOT three versions on how it would build Route 460. One version is based on a 50-year goal; “the level of construction that was requested,” said Tamargo. The other versions are based on the first one.

The second is an “optimized version,” which will take into consideration development of the area and concessions, reducing the amount of public funding.

The third version is an “enhanced option,” which includes where the firm has added its own improvements in the design of 460, highlighting major interchanges.

“We think this project can be feasible without public funding, but it is a long walk to make it there,” Tamargo said.

Patsy Napier, media coordinator for Itinere, believes her firm’s proposal stands apart from the other three because of its strong team, its commitment to the project and its involvement with local communities.

“The Itinere proposal is the most thorough proposal,” Napier said. “We have done our homework and we know the area and what the region wants.”

She also said Itinere’s strong team has “a blend of experience not only in Europe, but in the United States and leaders in the transportation industry in Virginia.”

Napier believes the Itinere proposal was developed in an open and transparent manner. In an effort to gauge the support and opposition to this project, Itinere looked to local communities and leaders when putting together its proposal.

“We had more than 50 meetings and met with over 100 local elected officials, business leaders, citizens and state legislators,” she said.

According to Napier, Itinere’s proposal shows flexibility and innovation in its approach to the project. As an example, she cited: “While the other two proposals are recommending delaying the building of some of the interchanges so critical to the economic vitality of the towns along the corridor, the Itinere team is working with the localities to make the interchanges more effectively address the economic development needs of the localities.”

The MPO’s decision has not affected Itinere’s proposal or its willingness to move forward. Napier knows VDOT is still committed to the project and that the process for the PPTA proposals is ongoing.

“We’re not changing our proposal in any way,” Napier said. “We are very comfortable with our proposal.”

There is no doubt among Virginian drivers that Route 460 needs improvement. Recent rains from a Nor’easter and subsequent flooding by the Blackwater River made Route 460 impassable between Windsor and Zuni. In addition, the route would be essential to evacuate residents of Hampton Roads in the event of a major hurricane.

In the mean time, Virginia’s motorists will continue to endure less-than-desirable road conditions while state departments and legislators struggle with transportation challenges such as this one.

Kaine remarked to the Joint Money Committees in August 2006 regarding the need for improved transportation: “The problems we face will only get harder and more expensive to solve if we fail to come together and act.” CEG

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