Deals Clinched on HOT Lanes
Friday, December 21, 2007
RICHMOND, Dec. 20 -- Virginia transportation officials announced late Thursday that they have finalized all the agreements needed to start construction in the spring on a $1.4 billion project to add HOT lanes on a 14-mile stretch of the Capital Beltway.
Under the agreements, Virginia will partner with two companies, Fluor and Transurban, to construct two lanes in each direction between Springfield and Georgetown Pike.
The companies, which will finance all but $409 million of the project, have an 80-year agreement that will allow the partners to collect tolls from motorists who use the lanes.
The toll will vary according to traffic volume, a system known as congestion pricing. Overhead signs will alert drivers to the price at a given moment; the average trip during rush hour is expected to cost $5 to $6.
The lanes will be free for carpools of three or more people and will allow for bus service. Buses currently don't serve the Beltway because traffic jams make scheduling impossible.
As part of the agreements, the Fluor-Transurban partnership will be required to keep the high-occupancy toll lanes congestion-free at all times, according to a statement by the Virginia Department of Transportation.
Construction is scheduled to be completed by 2013.
"With this agreement we will deliver the first ever dedicated HOV and transit services to the capital beltway and address congestion on Virginia's busiest highway," said VDOT Commissioner David Ekern.
The deal for the HOT lanes was announced in September. But Transportation Secretary Pierce R. Homer said the state and Fluor-Transurban had been wrangling over details, including financing, which he said was not easy to secure because of the tightening credit market.
"It is a very, very complicated project and a very, very complicated financial transaction," Homer said. "There are now hard financial commitments. This is a construction and a financing contract."
Of the $409 million in public costs, about $200 million will come from federal highway construction funds.
The corporate partnership will shoulder all financial risks, but Virginia will share in the revenue if the company starts making a profit in excess of a certain amount.
The project, which has been on the drawing board for more than five years, includes nine dedicated interchanges from the Beltway, counting three new access points to Tysons Corner.
Fluor-Transurban also has agreed to spend $250 million to upgrade bridges, overpasses and signs along the Beltway, which Homer said saves the taxpayers money.
Gov. Timothy M. Kaine (D) issued a statement last night that the project will bolster the region's economy and enhance residents' quality of life.
"By working together, we can manage congestion and provide new travel options for residents," Kaine said.