Revenue Is Up on Dulles Greenway, Despite Fewer Commuters
Sunday, July 5, 2009
The Dulles Greenway is rapidly losing commuters but increasing its revenue because its remaining drivers are paying up to $1 more to use the 14-mile private toll road.
Daily weekday traffic on the Greenway, connecting Dulles International Airport and Leesburg, fell nearly 8 percent over the first three months of this year, compared with the same months in 2008. The sharp drop in Greenway traffic, to an average of 47,490 tolls a day, coincides with fee increases that took effect in January.
The $3 base toll rose by 40 cents; $1 during rush hour. But average daily revenue jumped by 11.5 percent, to $167,453.
For most drivers who use the Greenway, it's a largely unavoidable necessity in an area lacking mass transit. During workday rush hours, motorists who drive the toll road's entire stretch to the airport save roughly 30 minutes compared with alternative routes. Geoffrey Kostal, 39, an airline pilot who lives in Waterford, said the increases are "repugnant" but uses the Greenway to get to Dulles International Airport.
"If I need to get to the airport or I want to see my kids, I'll take it, but I avoid it as much as I can," Kostal said. "It offers a benefit, but how is that benefit shared between the users and the investor class?"
Ann Huggins-Lawler, a spokeswoman for Toll Road Investors Partnership II, or TRIP II, said the increases help pay for the road's construction, including possible widening to 12 lanes, and continued maintenance.
The inverse relationship between commuter and profit numbers reported at the Greenway is similar to that of figures recorded along San Diego's South Bay Expressway, a toll road opened in 2007 and also owned by the Australian company. The firm also operates toll roads in Chicago and Indiana, although those roads are far less traveled than the Greenway.
Company officials described the toll as a bargain that saves drivers more than $7 a trip in time, gas and vehicle wear-and-tear by taking the Greenway instead its non-toll alternative, Route 7. That's according to an analysis by TRIP II sent to state regulators. Tolls are set to rise again in 2010 and 2012, to as much as $4.80.
When it opened in September 1995, the road was ahead of its time. Most drivers were unwilling to pay to bypass Routes 7 and 28, and its original owners defaulted on the loan.
But a decade later, the Dulles corridor experienced a boom. Today, the road is a primary thoroughfare that connects the densely-populated planned communities of eastern Loudoun County to the high-tech hubs and myriad jobs of the Dulles and Tysons Corner areas. The Australian firm Macquarie Infrastructure Group paid $617.5 million in 2005 to purchase the road.
Since then, the company's fortunes in the Greenway have been helped by a 1988 state law that authorized the construction of the state's first private highway since the Civil War. That law allowed toll increases under three conditions: if the new fee does not "significantly discourage" drivers from using the road; if the company does not make an "undue profit" from the increase; and if the road's benefits matches its cost.
Nearly two years ago, the State Corporation Commission ruled that the owners of the Greenway could raise toll rates but also recommended that officials force the owners to study a toll plan that would allow motorists who drive only a portion of the Greenway to pay a lower fee. TRIP II officials said they studied the idea of a distance-based toll structure and discarded it years ago, finding that drivers benefited from "shorter travel times, reduced maintenance costs and safer driving conditions."
Rep. Frank R. Wolf (R-Va.), a longtime critic of the Greenway plan, said the toll road has been unfairly aided by the "poorly drafted" 1988 law and heavy lobbying at the state level against proposals that would put an inflation-based toll-increase structure in place.
"It's highway robbery. It's a disgrace," Wolf said. "Everyone knows that these tolls are ripping people off and there's not much we can do about it."
But financial analysts say the toll road's owners are well within their rights to raise rates in the face of declining traffic, as commuters are free to choose new routes.
"People use toll roads to get out of gridlock, and congestion and driving is still down in this area," said John Townsend, a spokesman for AAA Mid-Atlantic. "Drivers have a visceral reaction to toll increases, and people will vote with their gas pedal."