Peanut fields in Southeastern Virginia
The Commonwealth Transportation Board (CTB) formally authorized today the Virginia Department of Transportation (VDOT) to set up a 63-20 corporation capable of issuing bonds for construction of the U.S. 460 Connector between Suffolk and Petersburg.
VDOT chose the quasi-state entity as the vehicle for building the interstate-grade highway, estimated to cost about $1.8 billion, because the project was untenable as a public-private partnership. Even with more than $800 million in financial support from the state and the Virginia Port Authority, the project would be hard pressed to generate sufficient revenues in its early stages to both support bond payments and give a private-sector partner a favorable return on its equity investment.
The McDonnell administration justifies the project on economic development grounds, arguing that the highway will stimulate container shipments through Virginia Ports upon the completion of the Panama Canal widening as well as to attract top-tier manufacturing investment to Southeastern Virginia.
Smart Growth advocates question whether the state should take on so much financial exposure based on projected economic growth that may or may not materialize. Virginia has many other pressing transportation priorities that could be funded with all that public money. Even many Hampton Roads government officials say they have higher priority projects locally that would relieve traffic congestion at choke points like the Hampton Roads Bridge Tunnel. However, no organized resistance to the project has emerged, and no one on the CTB spoke against it.
For a detailed discussion of the project finances, see “VDOT Restructures U.S. 460 Financing.
— JAB
