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Toll road operator Transurban will sell stakes in its Northern Virginia express lanes

Traffic on the 495 Express Lanes during the covid-19 pandemic. (Michael S. Williamson/The Washington Post)

Transurban, the company that operates toll lanes on the Capital Beltway and Interstate 95 in Northern Virginia, is seeking investors to buy into the Virginia express lanes, the company confirmed Friday.

Scott Charlton, chief executive of the Australian company, on Thursday announced plans to sell stakes of the U.S. toll operations, all of which are in Virginia, as part of a strategy to free up capital to pursue other projects in the United States.

“The introduction of partners would allow us to pursue both current opportunities as well as those we expect to emerge not only in North America but also in Australia, while putting less pressure on our balance sheet and freeing up significant existing capital,” Charlton said at the company’s annual shareholders’ meeting.

Transurban North America officials said Friday the company’s intent to bring in other investors will not impact the Northern Virginia operations. Transurban will continue to manage the express lanes, they said.

“Our commitment to the region and the commonwealth is long term,” Emeka Moneme, vice president of corporate strategy and innovation at Transurban North America, said. “There is no change in day-to-day management and/or operation of the facilities. We remain very, very committed to this region.”

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Transurban operates more than 50 miles of express lanes on interstates 95 and 395, as well as the Beltway in Northern Virginia. It is widely considered a key competitor for billions of dollars in state contracts to build toll lanes on the Beltway and Interstate 270 in Maryland.

Transurban is also extending Virginia’s express toll lanes on I-95 south to Fredericksburg and north on the Beltway to the Maryland border. The company has a 75-year concession with Virginia to operate the express lanes and collect the toll revenue. .

The sale plan is not prompted by the industry’s losses during the coronavirus pandemic, company officials said Friday. They said the company had been developing the strategy to bring in an equity partner for over a year.

The Northern Virginia operations were severely affected by the changes in traffic patterns during the pandemic — more so than Transurban’s other operations in Australia and Montreal.

Traffic on the 95, 395 and 495 Express Lanes hit a low in April when it was down by 80 percent, according to Transurban’s recent trading update. Through mid-June, average daily traffic was still at about 60 percent of pre-pandemic levels.

Daily traffic in the North American facilities, which include Montreal, fell 28 percent in the third quarter of this year compared with last year, to 112,000 daily trips, according to the company’s September update. The 95 and 495 Express Lanes saw some of the highest drops, 33 percent and 49 percent respectively, among all the Transurban toll facilities.

Company reports attribute declines in traffic and revenue to weak performance during the covid-19 months.

Earlier this year, the company said that the crisis has not affected its construction projects, and it plans to meet its annual obligation to the state of Virginia of $15 million for regional transit funding.

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“VDOT’s top priority is to ensure a safe and positive travel experience on our roadways, and we have a commitment from Transurban leadership that the company’s role as the Express Lanes operator will continue and there will be no impact to day-to-day operations,” the department said.

Traffic and revenue on the express lanes are rebounding as the region has begun to reopen, company officials said Friday.

“Despite covid and the change in traffic patterns of the region, we’re still incredibly confident about the overall growth of the DMV and the Mid-Atlantic in general,” Moneme said.

Moneme said Transurban typically brings in other investors to increase its balance sheet strength across the company and be better positioned to acquire additional assets. Many of the company’s roads in Australia have investors, he said.

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