TheNewspaper.com, a blog that bills itself as a journal of the politics of driving, has made quite a scoop: It has obtained a copy of nine pages excerpted from the “Comprehensive Agreement Relating to the Route 495 HOT Lanes in Virginia Project,” dated Dec. 19, 2007, between the Virginia Department of Transportation and the Capital Beltway Express LLC.
The blog summary of the contracts seems to confirm many of the worst fears of those who harbor doubts and suspicions about the HOT lane agreement — and I, a staunch advocate of HOT lanes, may well be forced to eat humble pie. In the end, I base my opinions on what the facts are, not what I wish them to be, so I bring this information to the attention of Bacon’s Rebellion readers to dissect and ruminate upon.
While the agreement asserts VDOT’s “unfettered right” to make transportation improvements, in the interpretation of theNewspaper.com it contains measures that would, in fact, curtail VDOT’s latitude to make improvements to the I-495 Beltway and other projects that might threaten HOT lane toll revenue. Writes the blog:
If [VDOT] determines that additional traffic lanes on the Capital Beltway Corridor are in the state’s best interests, the department shall consult with the concessionaire [Capital Beltway Express, a joint venture of Transurban and Fluor] as to an appropriate strategy to implement such additional traffic lanes. At the department’s sole discretion [it shall] permit the construction of additional lanes as part of the project with a view to minimizing any detrimental impact on the project or its ability to generate revenues…”
As theNewspaper.com boils down the meaning of that last phrase, the agreement is structured “to ensure the area remains sufficiently congested so that motorists will have an incentive to pay to use the toll lanes.”
The contract considers any improvement to the Beltway to be a “Department Project Enhancement,” which could trigger a “compensation event.” In such an event, Virginia taxpayers could be required to pay Transurban/Fluor compensation for lost toll revenue. Observes theNewspaper.com: “Given VDOT’s stated lack of funding, adding an extra monetary premium to the cost of any improvements effectively gives the foreign company the ability to prevent such projects from happening.”
Compensation events are not limited to Beltway improvements. They extend to improved connections between the Beltway’s general purpose lanes and Interstate 66, and the Dulles Toll Road, says theNewspaper.com. In such an event, an “independent engineer” would conduct a traffic impact study and determine the compensation due the concessionaire.
(I’m not sure that I read the agreement that way. From my perusal of page 69, the agreement specifically permits VDOT to make the improvements mentioned above, at its own expense, provided that… blah, blah, woof, woof… a bunch of impenetrable legalese follows. Readers better versed in reading contracts than I are invited to weigh in.)
The agreement also contains provisions to discourage any increase in the number of motorists sharing rides, says theNewspaper.com. Quoting the agreement, “The department agrees to pay the concessionaire, subject to Section 20.18, amounts equal to 70% of the average toll applicable to vehicles paying tolls for the number of High Occupancy Vehicles exceeding a threshhold of 24% of the total flow of all permitted vehicles…”
Bottom line: If escalating gasoline prices revives the popularity of carpooling, taxpayers could wind up making multimillion-dollar payments to Capital Beltway Express.
The blogger casts this contract, which he regards as highly beneficial to Capital Beltway Express, in the light of recent revelations that Transurban, an Australian company, had mistakenly made $172,000 in contributions to various PACs of both parties. Recognizing that foreign contributions are illegal, the company has asked for its money back. See “Bring Your Own Checkbook” for details.
(See also a discussion of how the firm benefited from federal financing in “Federal Subsidies for HOT lanes,” and the revelation that Capital Beltway Express will be required to maintain minimum HOT lane speeds of only 45 mph in “HOT Lanes at 45 MPH Not So Hot.”)
I have contacted the Kaine administration press office asking for a response. With the General Assembly convening for the transportation special session, the spokesman I talked to said he could not promise to get back to me immediately, but would do his best. I will post the response as soon as I get it.
(Hat tip: Jim Wamsley.)
