Rail-to-Dulles: Follow the Money

The proposed extension of the Washington Metro heavy rail service to Dulles Airport is the biggest infrastructure project in Virginia today. The project will cost some $4 billion, and it will impact billions more in real estate development in one of the nation’s hottest technology corridors. Multi-billions of dollars in contracts and development opportunities ride on the outcome of how the heavy rail project is built and financed.

It stands to reason that private-sector interests are lobbying heavily behind the scenes for an outcome that favors them. Indeed, private-sector lust for getting a piece of the multi-billion Metro jackpot may explain why less costly alternatives such as Bus Rapid Transit are getting no serious consideration.

House Speaker William J. Howell has leveled substantive criticisms against a decision by Gov. Timothy M. Kaine to give the Metropolitan Washington Airports Authority power to set tolls on the Dulles Toll Road and control many aspects of the planned Metrorail extension. Pardon my cynicism, but I find it difficult to imagine Kaine making the decision he did, or Howell making the charges he did, without a Greek chorus of private sector interests egging them on. I’m not suggesting that either man is carrying water for anyone, but I am suggesting that neither man is acting in a vacuum.

The Rail-to-Dulles story is huge. It is not merely a story about the clash of political personalities: Kaine vs. Howell. It can’t be shoe-horned into a simple political narrative such as the ongoing struggle between the Axis of Taxes and the foes of taxes. This also is a story about the power of government to commandeer billions of dollars of resources from taxpayers and to shower private-sector intersts with billions of dollars in engineering contracts, construction contracts, bond deals and development opportunities.

The public has no hope of fully understanding this story until it understands the array of special interests that have lined up behind the Governor and the Speaker. We can always hope that the Mainstream Media will do its job and dig past the dueling sound bites and press releases. But we can’t count on it. This is a job for the blogosphere.

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7 responses to “Rail-to-Dulles: Follow the Money”

  1. Anonymous Avatar

    Today’s Post lists the five private sector proposals and mentions the law-lobbying firms (McGuire Woods, Hunton and Williams, Reed Smith) involved. I suspect you may see some real digging.

    Follow the money indeed. When a group of Chilean businessmen come in and pair with a mega law firm and offer a billion bucks up front, why? How will they make the money back with a hefty profit? By collecting tolls for 40, 50 or 60 years. At the bottom it is no different than a bond issue paid off with tolls, and the only question becomes who gives you the best deal or will do the best job managing the asset, and does it really make more sense than traditional forms of payment (user fees, fuel taxes.)

    It might be that MWAA offers that best deal. There is nothing wrong with JLARC getting involved and hiring an accounting firm to run the numbers. But part of Howell’s angst is because he wanted that billion or multi-billion cash concession payment to buy other forms of transportation infrastructure to relieve the pressure for tax increases to help his guys win the next election or two.

    What he is ignoring is that people really are not as dumb as he thinks they are — they will recognize that billion dollar concession payment as coming out of their pockets many times over for years to come.

  2. Larry Gross Avatar
    Larry Gross

    I’m struck by this comment:

    “It stands to reason that private-sector interests are lobbying heavily behind the scenes for an outcome that favors them.”

    So my question is how does the above concern differ from the current practice of VDOT and local jurisdictions making decisions about where to put new roads?

    How about when a developer “proffers” to build a new interchange in exchange for a favorable ruling on his development proposal?

    Would anyone be suprised that one of the more interested parties in VDOT road planning would be those interested in the new development opportunities that might result if the new road became a reality?

    How about those same interested parties being closely allied with local elected officials or .. HORRORs they actually get appointed to sit on the Commonwealth Transportation Board that decides which roads get built.

    It’s not secret that many of those on the CTB are allied with development interests – right?

    My point is – yes there are HUGE concerns with this project but if you really want to worry – consider the scenario where private investors (not just the Airport Authority or an entity like it) – make a PPTA proposal – that is accepted by VDOT and the company with the winning proposal knows specific and exact details of things like interchanges long before others do.. and being private investors – what is to keep them from exercising that advance knowledge to .. say.. buy up a few “select” properties that will be PRIME after the new infrastructure is built?

    One could argue that what HAS been missing in our current practices is, in fact, a LACK of coordination between Land Use and Transportation.

    So, here we have a situation where fear and loathing are resulting from the prospect that they WILL be coordinated!

    So, perhaps the real concern should be with respect to WHO and HOW land-use/transportation is coordinated with such proposals.

    What is the process?

    What are the standards by which we judge such coordination to be a good thing or a bad thing.

    What outcome do we want and who are the players who decide?

    Oh how sweet it is. Folks demanded answers to the land-use/transportation quandry.

    Well.. here we have an answer – and the result is – suprise – not joy but rather “oh my gosh – what have we done”? 🙂

  3. Jim Bacon Avatar
    Jim Bacon

    Larry, you are quite right, the entire process of selecting and prioritizing transportation projects is highly politicized behind the scenes. The only difference between Rail-to-Dulles and the routine, smaller projects you cite is magnitude. All I’m arguing is that when billions of dollars are at stake, as opposed to mere millions, the public has a vital interest in knowing who the special interests are who’re lining up behind the different proposals.

  4. Charles Avatar

    Business and developers will always prefer a public solution, because first, they can buy politicians a lote more easily than influence over another private company, and second, they can probably count on the public not going broke trying to make the project work (because they won’t be looking to make a profit).

    Then there is the more obvious — no business wants a competitor to get an advantage, and the MVAA is certainly seen as NO COMPETITOR to any soundly run business.

    The job will still get done by private contractors, and they will all be trying to buy influence to get the contracts — whereas if a private concern won, they already have their contractors lined up.

    As a contractor to the big firms bidding for this deal, you might decide you have a better chance of getting the contract if government is doing the contracting, since otherwise your pony might not win the competition.

    It doesn’t make me feel better that other elected officials also think government will do the job best. They see government as a solution. And they see votes in getting something done quickly, which this may, or at least get started.

    And frankly, if this gets bogged down because of government ineptness, I bet the politicians aren’t held nearly as responsible as they would be if the contract was given to a private firm and it failed.

    You know that the papers would be all over the private firm to see who they gave money to. Nobody’s going to do THAT with government running the show.

  5. Ray Hyde Avatar
    Ray Hyde

    Larry and Conserative One raise good points. I’ve said throught the campaign that no one has explained what “linking land use and transportation means. to some its ans excuse to deny development, to others it means we should focus our transportation dollars where development has already outstripped carrying capacity, for others it means transit oriented development, etc, etc. Larry is right to ask, what is the process. We might also ask, what are the goals, and how are they measured.

    Conservative One is even more skeptical than I am. I would hate to believe that his vision is how it really works. My contracting experience has mostly been that government is above board, even if they have their own vision as to how things should be. The only real problem I see is lack of accountability and any sense of urgency, more so than outright favoritism or fraud.

    Rail to Dulles is a good idea only because it makes Dulles a mixed mode transfer point. Unfortunately, Dulles is not yet much a a destination in its own right. What would Richard Florida suggest it would take to make Dulles a center of investment for creative people, instead of a transfer point to someplace else?

    The ancilliary benefit of rail to Dulles will be felt all along the corridor, but it will only play out of Metro is up to the task. My experience with the Orange Line says they are already $100 million behind the power curve, and the rail to Dulles over runs haven’t started yet.

    Any way you slice it, this is going to be yet another huge investment outside the core area, and yet another reason to reconsider waht the “core” area really ought to be.

  6. Anonymous Avatar

    There are more jobs in Tysons Corner than downtown D.C. That makes it a core area.

    As for the Speaker – this proposal came out in December/January and he waited until after the Governor signed an MOU to raise the point. Plus, he knows an effort to stop this will never get through the Senate. If he really wanted this takeover to fail, then he should have worked to create a politically hostile environment sometime over the last 3 months. He chose not to. To me, that says he is posturing.

    Also, Northern Virginia doesn’t trust Richmond. Sending the revenue from a “sale” of the toll road to the GA in the hopes it makes it back to NOVA is not something anyone up there wants to count on. And, with all due respect to the Speaker, he is the one that created that environment. You reap what you sow.

  7. Ray Hyde Avatar
    Ray Hyde

    There are more jobs in Tysons Corner than downtown D.C. That makes it a core area.

    Don’t let EMR hear you say that.

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