Norfolk view of the MidTown Tunnel. Photo credit: Virginia Department of Transportation
The $2.1 billion Midtown-Downtown Tunnel project will alleviate some of the worst traffic congestion in Hampton Roads. But the deal raises questions about transparency and accountability in Virginia’s public-private partnership law.
By James A. Bacon
Last week state officials and their private-sector partners took the podium at the Governor’s Transportation Conference in downtown Norfolk to describe the $2.1 billion Midtown-Downtown Tunnel project that had received the final go-ahead only days before. Chris Guthkelch, Elizabeth River Crossings (ERC) project director, described the engineering feat of moving 1.5 million cubic feet of sediment and depositing eleven massive sections of tube-tunnel, barged down from Baltimore, onto the river floor so they aligned perfectly. Dennis Heuer, Hampton Roads district engineer for the Virginia Department of Transportation (VDOT), explained how upgrading the tunnels linking Norfolk and Portsmouth would reduce congestion, improve safety and boost regional productivity by between $174 million to $254 million annually.
But across the river in Portsmouth, details of the massive public-private partnership were not being received very well. Local officials expressed outrage at project financing that would impose tolls of $1.59 for cars during off-peak hours and considerably more for trucks and cars during peak hours. In future years, tolls will escalate at the annual rate of 3.5% or the Consumer Price Index, whichever is higher. Adding insult to injury, ERC will begin collecting tolls in 2012, five years before the project is even complete and the public experiences any benefit from it.
Addressing a crowd outside City Hall, Portsmouth Mayor Kenny Wright vowed to roll back the tolls. He called upon other cities in South Hampton Roads to join the effort. The state might have signed a comprehensive agreement, locking in the arrangement for 58 years, but Wright had only begun to fight. “This thing is far from over,” he said. “It is never too late, even with a signed contract, to negotiate how the tolls will be implemented.”
Public-private partnerships like the Midtown-Downtown Tunnel are incurring closer scrutiny now that the McDonnell administration has announced a series of new projects and promised a “pipeline” of other deals in 2012. As conventional sources of road-construction funds are eroded by inflation and mounting maintenance needs, McDonnell has turned to debt – his administration will borrow $4 billion for road construction – and P3s, as the public-private partnerships are known, to fill the gap. He is counting on the P3s to attract billions of dollars of toll-backed private investment to build projects the state never could afford otherwise.
In early December, the administration announced a series of major deals in quick succession. First, news broke of the $2.1 billion Midtown-Downtown Tunnel agreement. The next day, the governor announced an agreement in principle for a $940 million HOT lanes project on Interstate 95. The day after, word came that the state would invest $124 million to advance the Coalfields Expressway. Meanwhile, the newly formed Office of Transportation Public Private Partnerships (OTP3) is actively working on a deal to upgrade U.S. 460 between Petersburg and Suffolk to Interstate standards, a project that also will require significant state funding. The OTP3 is expected to release a list of other projects under consideration next month.
But even as the McDonnell administration charges ahead, making good on the governor’s campaign promise to “get Virginia moving,” critics are getting more vocal. While the critique of individual projects may differ, depending on details, several common themes are emerging:
- The P3 enabling legislation provides for little accountability. Citizens can’t see critical details of a transaction until the deal is already done, and there is no effective appeal.
- Concessions take the form of long-term agreements – 58 years in the case of the Midtown-Downtown Tunnel, 73 years for the I-95 HOT lanes – that effectively lock in transportation policy for decades to come.
- Some contracts contain clauses that either protect private-sector partners from competing projects or compensate them for lost revenue from future public investments, including mass transit service.
- P3 projects are suitable only for mega-projects that generate revenue from tolls or, possibly, special tax districts. By circumventing the usual process of review and approval by the Commonwealth Transportation Board for the expenditure of state money, projects jump to the head of the line and lay claim to scarce state dollars that could be more effectively spent elsewhere.
larryg | December 16, 2011 at 11:23 pm | Reply
very good article! thanks again for all the effort that you put into it.
I have mixed feelings about this because the HR/TW region has had AMPLE OPPORTUNITY to get involved in these issues but they don’t want to pay ….
and so basically they’ve sat there and threatened to hold their breath until the State “did something”.
well.. this is what happens when you stand back and demand that the state “do something”.
I say let them stew in their own juices on this.
It’s not good the way that PPP “works”…at the least the public should have been told the tolls that were under consideration…
…but here’s the problem.. if they told the public more about the project and the costs and the tolls.. guess what would have happened?
that’s right big bad opposition…to delay, obfuscate and ultimately kill the effort.
so what can be done?
well.. McDonnell took the bull by the horns and took off…
now the whining begins….
I have no patience with those folks.. they want big expensive infrastructure but they don’t want to pay for it.
Good article, but I am surprised it took you this longtime point out issues that I have raised for years.
These long term contracts undermine the basic idea that no administration may enact a law a succeeding administrations cannot undo. Same problem as with granting permanent conservation easements.
Then there is the issue of competing infrastructure: essentially granting government sanctioned monopolies, with no recourse that does not involve a huge ” revenue” event for our public ” partners”.
Not to mention the fact of tolls which amount to directed taxes: taxes that will increase and be increasingly unfair over time. Taxes against a few that increase productivity for many.
Frankly, it turns my stomach.
As far as I am from the tunnel, I will still benefit, and I should pay proportionately.
Even if we are not smart enough to figure out what proportionately means, all the disproportionate projects probably average out.
Get over it, and get on with the projects.
this should be interesting:
” Bill in Congress to give US Secretary of Transportation control over toll rates of bridges and tunnels”
http://www.tollroadsnews.com/node/5663?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+tollroadsnews+%28TOLLROADSnews%29
well there you have it..the clown show in Washington asserts it’s authority over the clown show in Richmond…lordy…
so the whole idea of having a market-based tolling system is … out the window because it becomes obvious that DOTs and MWAA’s fully intend to use them as cash cows….
Hydra was right… eh?
Cash cow?
Imagine the temptation involved in letting a 60 year contract. You could arrange the kickback to your grandchildren.
but what if ALL that money actually gets spent on other needed transportation projects…???
and those projects get tolled to continue future funding of additional projects?
that’s pretty much what Florida is doing now with a statewide toll authority where they “harvest” money from some toll roads to plow back into other construction projects.