A private consortium said Wednesday that it has selected a lead construction contractor to build toll lanes on part of Interstate 270 and the Capital Beltway in Maryland.
First, however, Transurban would need to clinch a 50-year contract with the Maryland Department of Transportation for the private consortium to finance, build and operate the toll lanes in exchange for keeping most of the toll revenue.
Maryland Gov. Larry Hogan (R) has said adding privately financed toll lanes for motorists who want to buy their way out of congestion is the only way the state can afford to provide significant traffic relief. Meanwhile, opponents say widening the highways would cause too much environmental damage and give short shrift to mass transit, while arguing the tolls would be too expensive for many motorists.
MDOT has estimated the first phase of construction to cost $3.75 billion to $4.25 billion, according to the project’s final environmental impact statement. In a tweet, Hogan called the Transurban team’s selection “great news and more momentum” for “the most important transportation project for the National Capital Region in the last 50 years.”
The project got a significant boost in August, when the Federal Highway Administration approved its environmental study. Opponents have said the analysis is flawed and have threatened to sue.
Project supporters would need to get a 50-year deal to the state’s Board of Public Works, which must approve major contracts, before term-limited Hogan leaves office in January. Otherwise, a new governor could block, change or slow the toll lanes plan. Democratic gubernatorial nominee Wes Moore and Republican nominee Dan Cox have said they would consider major changes to the plan.
Transurban spokeswoman Tanya Sheres said the company’s team, Accelerate Maryland Partners, is working with MDOT on a deadline for submitting its contract proposal.
Both sides potentially have tens of millions of dollars at stake. If the Board of Public Works rejects a proposed contract, the state would have to reimburse the Transurban team up to $50 million of its planning costs, according to a 2021 predevelopment agreement. If the two sides can’t agree on a 50-year deal to submit for approval, the Transurban team would have to absorb those costs.
The Transurban team’s lack of a lead construction contractor has been at the center of a bid protest filed by Spanish construction firm Cintra, which lost out to Transurban on the predevelopment agreement. The protest, which is pending in court, alleges in part that the Transurban team’s lack of a construction partner violated the state’s bid rules for the project. MDOT has rejected the claims, and Transurban has defended MDOT’s procurement process.
In a statement, Pierce Coffee, president of Transurban North America, called Tutor Perini “the right partner” on a large project that “demands a strong team with the track record to collaborate and innovate.”
The Tutor Perini team will “drive value and efficiencies in the project’s design, pricing and delivery” as part of Transurban’s work to reach a 50-year contract proposal, according to the Transurban team.
In the statement, Tutor Perini chief executive Ronald Tutor said the company brings “a strong record of meeting or exceeding project participation goals for disadvantaged businesses” and “the strength” of its union and nonunion contracting partners.
Tutor Perini has had delays and cost overruns on other projects.
In 2019, a jury in Washington state rejected the company’s claim that the state was responsible for $300 million in cost overruns on a highway project after a massive tunneling machine hit a pipe and broke, leading to 2½ years of delay, according to the Seattle Times. The company’s contract for building part of the California bullet train project had grown from $1 billion to $2.4 billion as of late 2021, largely because of change orders, according to the Los Angeles Times.
Construction experts say highly complex megaprojects often go over budget or fall behind schedule because of unforeseen problems or, in some cases, inaccurately low bids.
Asked about Tutor Perini’s cost overruns and delays on other projects, Sheres said: “It is not unusual for a developer of large infrastructure projects to have managed through challenges on multi-year, multi-billion projects across shifting macroeconomic and political landscapes.”
Early collaboration on the Maryland toll lanes plan, Sheres said in an email, will “identify, manage and allocate risk early in the project’s timeline.”
Under the toll lanes proposal, the private consortium would add two high-occupancy toll (HOT) lanes in each direction to both highways. The first segment would include the Beltway between the Virginia side of a new and wider American Legion Bridge and the exit for Old Georgetown Road in Bethesda, as well as I-270 south of I-370. One of the I-270 HOT lanes would come from a converted carpool lane. The regular lanes would be rebuilt but remain free.
The Tutor Perini team includes a subsidiary, Wisconsin-based Lunda Construction, and Connecticut-based O&G Industries. Centreville, Va.-based Parsons Corp. will lead the team’s design work, Transurban said.
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