To Foreign Investors, the U.S. 460 Project Ain’t Peanuts

Three multinational business groups have submitted proposals in response to a Kaine administration solicitation to upgrade U.S. 460, a four-lane highway that runs through peanut country between Suffolk and Petersburg. The project, which could cost in excess of $700 million, is deemed crucial for handling an anticipated surge in container shipments from a $450 million port facility that the Maersk shipping company is building in Portsmouth.

The three proposals demonstrate that there’s no lack of private-sector interest in investing in Virginia infrastructure. It will be interesting to see how the three groups envision paying for the project — through tolls, real estate ventures or other revenue sources. The Virginia Department of Transportation will make the proposals public in 10 days.

The Times-Dispatch has the story here.

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5 responses to “To Foreign Investors, the U.S. 460 Project Ain’t Peanuts”

  1. James Atticus Bowden Avatar
    James Atticus Bowden

    This is a vital link for the Port of Virginia and our future.

    It doesn’t take an unelected, unaccountable, tax and spend Regional Government to do it.

    Just a little leadership.

  2. Larry Gross Avatar
    Larry Gross

    I note that Speaker Howell and his backers are OPPOSED to self-help plans for both Tidewater and NoVa:

    In WaPO this morning: “‘An Uphill Struggle’ for N.Va. Roads Plan”


    A $417 million plan by Northern Virginia Republicans designed to ease area traffic problems faces the same obstacle during an upcoming special session of the General Assembly that has thwarted similar efforts all year: opposition from House leaders to new taxes or fees.

    But House Speaker William J. Howell (R-Stafford) signaled the difficulty the plan faces this week when he said Virginia can address its transportation needs with existing resources.

    Such declarations confound most lawmakers in Northern Virginia…

    (however)…”Not everyone in Northern Virginia supports the proposal. The Fairfax County Republican Committee issued a proclamation this week opposing proposals that require new taxes or fees.”

    … “Howell said he recognizes the urgency of the issue, particularly in Northern Virginia, but he believes tax increases in a year of nine-digit surpluses would be irresponsible.”

    Howell and others have also said they want much more involvement of the Private Sector… so it will be interesting to see how the U.S. 460 initiative plays out.

    Not every road “idea” is going to appeal to private investors especially if their analysis indicates that the required TOLL will need to be higher than enough drivers are willing to pay.

    For 460 – for instance… it will parallel I-64 … and despite all of this talk about Tidewater’s ports and the spectre of gridlock essentially harming the ports ability to move goods … the truth about whether shippers will continue to use an non-toll I-64 or a tolled U.S. 460 almost surely will determine whether the new road will be built.

    For that reason – it will be also very interesting to see what kinds of legislation the GA will produce with respect to what kinds of “strings” private investors can put on their proposals – which might well include things like putting tolls on I-64 also… to assure that no matter what route shippers choose… the private investors get essentially a guaranteed return on their investment … OR… a clause might be written that if they don’t TOLL I-64 and the lose money.. that the state will step in…

    We hear about the success of the Dulles TOLL road. Less known are the problems faced with Richmonds Pocahontas Parkway (PP) (which) was concessioned out to Transurban of Melbourne Australia in late June 2006. The not-for-profit Pocahontas Parkway Association with a big load of fixed interest debt was facing default two or three years out.

    Transurban had agreed to acquire a 99-year concession on the Pocahontas Parkway in exchange for 100% control of the parkway.

    I’m betting that 100% “control” has some interesting dimensions to it not totally forseen by proponents.

  3. James Atticus Bowden Avatar
    James Atticus Bowden

    Let’s make a distinction between taxes and tolls. Yes, tolls are a tax. A user tax. Conversely, the sales tax in (R) Sen. Quayle’s bill for Hampton Roads Regional government isn’t a user tax.

    Tolls on I-64 and 460 would just about pay for their improvements. Go for it. If private investors want to help fund and get a profit – then super.

    No problem here on the tolls as user fees. But, a big problem with the regional government and sales tax funding scheme and scam.

  4. Anonymous Avatar

    It will be interesting to see what the three proposals for the 460 Bypass say regarding finances. Expect one hard reality – the projected traffic will not generate enough revenue to pay for the facility. The team that has an innovative way to generate additional revenue for the project will be the winner. Road building is not the best way to make profit.

    There is only one source of money for public services and government facilities – the tax payer. Governments cannot create wealth.

    Whether through a gas tax, a toll, impact fees, property taxes or any other means, the money comes from the public. Some, such as tolls, are funded by users of a specific facility. Gas tax on the other hand, can be collected from one group of citizens and used to benefit another. It is, however, a closed system. If improvements are desired, then money must be raised. One way or another, from one group or another.

    Privatization of transportation facilities, such as the leasing of tollways can bring money to the state as would a statewide gas tax. Some, or all of the taxpayers will pay more no matter what funding stream is chosen.

    P.S. – 460 is going to cost over $1B, any less is not going to get the job done.

  5. Anonymous Avatar

    Lawrence Edward Collins –
    The reasons given for building this road are false. The road is going to cost 3 times the original estimates.
    The local county governments did not stop people from buying land and building houses in the path of the proposed road. This was wrong on many accounts.
    I have a new house in the path of this road and I did not know about the project until 8 months after I moved in.
    How would you like it if you looked for land for 3 years, sold you old house, bought new land, lived 15 months with you in-laws while your dream house was built and then 8 months later be told that a road was going to come right through it.
    This is just wrong!

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