RICHMOND, VA. — The Commonwealth of Virginia selected US 460 Mobility Partners to finance, design and build a new 55-mile stretch of Route 460 in southeastern Virginia. The selection was made after a two-year procurement process involving detailed review and evaluation of private-sector proposals. Construction will be financed through a combination of public dollars and tolls. The existing Route 460 remains free.
"The new Route 460 highway is critical to economic development in this growing region of Virginia. This project is expected to create 4,000 jobs during construction and more than 14,000 long-term jobs when the new road opens," said Governor Bob McDonnell. "The new highway will stimulate business development in the region and accommodate greater freight traffic from the Port of Virginia, benefiting the entire Commonwealth. Chmura Economics estimates that the new highway will have an annual economic impact by 2020 estimated at $7.3 billion. The project will also provide a safer route for heavy truck traffic and another westbound hurricane evacuation alternative, in addition to improving connectivity for the region's military. In 2011, our transportation legislation put the most new funding into Virginia's roads and rail since 1986. Over 900 projects were jumpstarted as a result of this historic breakthrough. Now, with this announcement, we are taking yet another major step forward in improving transportation in Virginia. We are putting in place the infrastructure today that will be crucial to economic growth and job creation in Virginia tomorrow."
Secretary Sean T. Connaughton added, "The Commonwealth is partnering with the private sector to achieve the most cost-effective means of delivering this project. Long-term project benefits will far outweigh the investment to build the road. When completed, the new Route 460 will bring much more than transportation improvements. It will also provide a critical link to jobs, commerce, and the military and increased safety. This is positive news not only for southeastern Virginia, but to the entire state."
The Virginia Department of Transportation (VDOT) in coordination with the Office of Transportation Public-Private Partnerships is procuring the project under Virginia's Public-Private Transportation Act (PPTA), which allows the Commonwealth to partner with the private sector to finance, design and build transportation improvements.
"The new Route 460 has been a top transportation priority for the state for more than 12 years," said VDOT Commissioner Greg Whirley. "Since that time, VDOT has worked extensively with localities, the region and the public to complete environmental work, establish a corridor and then go through a lengthy evaluation process to select a private-sector partner and develop a financial plan to design and build the new highway. Project development involved open communications and numerous meetings with the public and local officials. And there will be more public outreach as we move ahead prior to signing the comprehensive agreement and bringing this project to financial close."
The Hampton Roads and Tri-Cities Metropolitan Planning Organizations (MPOs) have designated the Route 460 project a significant transportation priority. The project is one of the highest ranked transportation projects of the Hampton Roads MPO and both MPOs have included the project in their individual long-range transportation plans. Key reasons for support include improved transportation for freight, increased traffic safety because of an additional evacuation route, as well as improved travel times and reliability to port facilities, defense installations, and tourist destinations.
Key business terms:
• VDOT will oversee the work performed by the private-sector team during construction, and operate and maintain the facility after the project is completed. VDOT will also own the facility and all potential benefits of the project as well as set the initial toll rates.
• US 460 Mobility Partners will design and build the project at a fixed cost by a fixed date. It will take significant risks associated with delivering the project.
• A non-profit corporation called the Route 460 Corridor Funding Corporation of Virginia will issue tax-exempt bonds to finance the project. The debt will be non-recourse to VDOT, the Commonwealth and US 460 Mobility Partners. The funding corporation will collect the tolls, adjust the toll rates and manage the toll collection system over the course of 40 years.
• The project cost is $1.396 billion. Project cost includes design, construction and toll collection set-up.
Funding sources are as follows:
• Public funding from VDOT — $753 million to $930 million, with the lower amount possible if the Commonwealth is successful in securing a low-interest federal loan from the Transportation Infrastructure and Investment Act (TIFIA) program. The federal loan would reduce the Commonwealth's subsidy.
• Public funding from the Virginia Port Authority — $202 to $250 million, with the lower amount possible if a TIFIA loan is secured.
• Private sector tax-exempt bonds managed by the Route 460 Funding Corporation of Virginia - up to $216 million (net amount).
• The new Route 460 will be a 55-mile four-lane divided, limited-access highway from Suffolk to Petersburg at I-295. It will parallel the existing Route 460.
• There will be seven interchanges at routes 156, 625, 602, 40, 620, 616 and 258.
• Following the signing of a comprehensive agreement and financial close in December 2012, design and right of way work is expected to begin in 2013, with construction starting in 2014.
• Once the road is ready to open in 2018, tolling will begin at approximately 7 cents/mile ($0.067) for cars and 21 cents/mile ($0.213) for trucks. This equates to $3.69 for cars and $11.72 for trucks for the entire 55 miles.
• Tolls will be collected electronically using E-ZPass and license plate video tolling. There will be no manual toll collection.
• The existing Route 460 will have no tolls and remain the free alternative.
Private-sector teams who competed for project:
US 460 Mobility Partners — selected because they offered a financial plan requiring the least public subsidy
• Ferrovial Agroman, S.A.
• American Infrastructure 460 Partners
• Lane Construction Corporation
• Skanska USA Civil Southeast Inc Multimodal Solutions LLC
• Clark Construction Group, LLC
• Shirley Contracting Company, LLC
Visit www.route460ppta.org for more project information.