Toll-Lanes Contract Could Cost State

By Eric M. Weiss
Washington Post Staff Writer
Sunday, July 20, 2008

Rising gas prices are increasing transit and carpool use, which normally would be a good thing in the traffic-choked Washington region.

But under an agreement Virginia signed with the private companies building high-occupancy toll lanes on the Capital Beltway, the state could be liable for millions of dollars a year if too many carpoolers, who will be exempt from tolls, use the lanes.

The carpool subsidy is in addition to the $409 million that taxpayers are investing in the $2 billion, 14-mile project, expected to break ground next week.

Under the 80-year contract signed in December, when gas prices were much lower, Virginia officials insisted that carpools of three or more people and buses be allowed to use the lanes for free and offered to reimburse 70 percent of the tolls carpoolers didn't pay.

At the time, transportation officials estimated that the provision would cost the state $1 million a year. The carpool subsidy will continue for 40 years or until the builders make $100 million in profits, according to the contract between Virginia and Transurban, an Australian company, and Fluor Corp. of Texas. The subsidy kicks in when carpools exceed 24 percent of the traffic on the lanes.

"Oh, you're kidding!" said Corey A. Stewart, the Republican chairman of the Prince William Board of County Supervisors, who carpools to the District several times a week and said there are better ways to spend the state's limited transportation dollars. "We're paying to build a road for private companies, and now we're continuing to subsidize the private company. This just gets worse and worse."

The HOT lanes, two in each direction, will be built on Interstate 495 between Springfield and just north of the Dulles Toll Road. Tolls will fluctuate based on the amount of traffic. Non-carpool vehicles could pay an average toll of $1 a mile.

Similar projects across the country limit the number of carpools allowed or charge them reduced tolls. Virginia officials said their unprecedented agreement was a way to balance the need for the toll lanes to succeed financially while not discouraging carpooling.

"In negotiating, we realized there was a conflict between what we wanted and what they wanted," said Barbara Reese, deputy transportation secretary and a key negotiator on the deal. "Somebody has to pay."

Reese said the carpool subsidy would kick in when the HOT lanes are at maximum capacity for more than 30 minutes. After that point, the state is liable for every 15 minutes that the HOT lanes are at maximum capacity for that day. She said the estimated $1 million-a-year liability exposure to the state seemed reasonable to state officials. She acknowledged, however, that the spike in carpooling and transit use could increase the state's liability, but officials said they could not estimate by how much.

Reese said the contract includes protections for taxpayers, in addition to a revenue-sharing plan if the project exceeds financial expectations. The money the state is contributing -- $157 million from surplus funds from prior years and $252 million in state and federal highway construction funds -- will pay for changes and improvements that the state requested, including building bridges, repairing ramps and connecting the HOT lanes through the Springfield interchange.

"This was not something for nothing," Reese said.

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