Md. Delays Portion of Connector Project
Friday, September 12, 2008
Part of the intercounty connector project will be delayed indefinitely to save money, and a bond sale to finance some of its construction was postponed this week as officials deal with cost overruns and uncertain federal funding, Maryland officials said yesterday.
Maryland Transportation Secretary John D. Porcari said service roads designed to help move traffic on and off Interstate 95 near the connector will be delayed because another part of the project came in $100 million over budget.
He also said the state postponed this week's sale of $425 million in bonds to help pay for the six-lane toll road because of questions about how much federal money states would receive for transportation.
U.S. transportation officials announced last week that the federal transportation trust fund is on the verge of going broke.
An $8 billion relief package passed by Congress this week is expected to resolve the immediate federal funding problems. But the legislation didn't come in time for Maryland's bond sale, which was scheduled for Wednesday. Porcari said his department's Wall Street advisers recommended that the sale be delayed until after the federal trust fund was shored up.
"You don't want to go to market with that kind of uncertainty out there," said Porcari, who added that the sale could be rescheduled soon.
The grim news for the 18.8-mile highway through Montgomery and Prince George's counties added to a rough week for Maryland transportation officials. On Wednesday, Porcari announced that the state must cut $1.1 billion in road and transit projects statewide over the next six years because of slumping revenue. The intercounty connector was not affected by those cuts.
Porcari said the connector's construction remains on schedule and within its $2.4 billion budget.
"We're living with the financing plan we inherited" from the administration of former governor Robert L. Ehrlich Jr. (R), Porcari said. "We'll move ahead with the project, and the project will be within its financial plan."
Some critics said they see evidence that the plan is beginning to unravel.
"The handwriting has been on the wall a long time," said Greg Smith, a longtime connector opponent who follows the project's financing. "We've been questioning the state's ICC cost estimates and its revenue assumptions for several years now. The question is how much worse does this situation have to get before this administration drops this boondoggle?"
The bonded debt for the project is supposed to be paid off in part with Maryland's future federal transportation dollars. If federal funding falls short, Smith said, Maryland will have to make up the difference by raising tolls or diverting money from other services.