Inspector general delves into 460 in VA

Link to article here.

The corruption with P3 contracts continues...meanwhile Texas doesn't have an Inspector General to watchdog such deals despite taxpayers insisting on one. Such fraud is most assuredly happening in lax Texas.

Inspector general delves into 460
By Matthew Ward
Thursday, June 19, 2014

Virginia’s transportation secretary has asked the state Inspector General’s Office to join its internal review of the Route 460 project.

“Secretary Layne directed VDOT’s Assurance and Compliance Office to conduct a review of the Route 460 P3 project,” department spokeswoman Tamara Rollison said Thursday.

The office’s multi-pronged mission, according to VDOT’s website, includes investigating alleged “fraudulent, illegal and/or inappropriate activities.”

“The Office of the State Inspector General is working with our division to prepare a combined report for Secretary Layne to review this month,” Rollison added.

The purpose of the review, according to Rollison, is to verify that the department and the commonwealth’s Office of Transportation Public-Private Partnerships pursued the 55-mile toll road project, from Suffolk to Petersburg, in accordance with the “comprehensive agreement” the state entered into with US 460 Mobility Partners.

A partnership of Spanish multinational Ferrovial Agroman, S.A. and American Infrastructure, Mobility Partners was signed to design and build the project in December 2012, weeks before the legislative session convened and lawmakers could review the deal.

It went ahead without a re-bid after the McDonnell administration altered the procurement structure, emphasizing tolls and including new public money and bonds, to lure a private sector that was initially cold on the project.

Add to this significant environmental concerns, after the U.S. Corps of Engineers signaled it would be unable to issue a permit for the department’s previous preferred design for the new road, cutting through hundreds of acres of wetlands.

Layne earlier this year froze payments to Mobility Partners, after $300 million was spent despite the lack of a permit from the Corps, and the department is now taking another look at the environmental impact of five different road designs, with the stated intention of re-announcing a preferred alternative by the end of the year.

“It is something that Secretary Layne asked for,” Rollison said of the inspector general joining the departmental probe.

“It’s not an investigation, it’s a review. He wanted to make sure that VDOT was prudent and followed all our own procedures and processes, and that the terms of the comprehensive agreement were followed appropriately and properly.”

Rollison did not know whether the results of the review would be made public. VDOT does not expect to find wrongdoing, she said.

“(But) we also expect the review will identify opportunities for improvement,” Rollison added.

Del. Chris Jones of Suffolk, who as chair of the House Appropriations Committee is also studying what went wrong, why, and where responsibility lies, welcomed the inspector general’s scrutiny.

“Certainly I welcome another layer of scrutiny of this project,” Jones said. “Hopefully it will give some insight into how we have ended up where we are.”
Link to article here.

An open road
Virginia should bolster its transparency rules to avoid repeating U.S. 460 debacle
July 02, 2014
Daily Press

If there's a conclusion to be drawn from Virginia's experience on the U.S. 460 project it's that we should rethink how we use public-private partnerships for building roads. If neither auditors nor taxpayers can account for every penny spent, then ventures like this run counter to the public's best interest.

The administration of former Gov. Bob McDonnell pursued the improvement of U.S. 460 with a fervor that took Hampton Roads by surprise. Sure, a swifter route to I-95 would help alleviate congestion on I-64 and help serve traffic at the Port of Virginia, but few considered it the region's most pressing transportation project.

We now know the governor and his transportation secretary, Sean T. Connaughton, were reckless in their pursuit of this project, and their ill-considered action cost commonwealth taxpayers at least $300 million. Gov. Terry McAuliffe's decision to halt all action on U.S. 460 stopped the bleeding, but we do not yet know the full extent of the damage.

Ultimately, a more reliable alternative to I-64 would serve Hampton Roads, and we expect the McAuliffe administration to prudently consider its options. However, Virginia needs more aggressive oversight and better disclosure rules for projects like this to prevent repeating a debacle of this magnitude.

A report on the U.S. 460 project produced by the Virginia Department of Transportation and Virginia's Office of the State Inspector General paints a troubling picture of an initiative run amok.

The proposed $1.4-billion roadway was pitched as a must-have priority for Hampton Roads, billed as the best way to reduce congestion on I-64. The limited-access highway would replace the existing U.S. 460 and link Suffolk to Petersburg. Those living on the Southside would have a direct route to I-95 and it would assist evacuation in case of emergency.
But there were problems from the get-go. The proposed route would cross wetlands and it was far from assured that Virginia would receive permission to begin construction from the U.S. Army Corps of Engineers. Without the environmental permits, the roadway would never be built.

In spite of that possibility, Gov. McDonnell and Secretary Connaughton forged ahead with a public-private partnership between the commonwealth and the Route 460 Funding Corp. of Virginia, which sold tax-exempt toll-revenue bonds to fund the project.

Subsequent agreements struck with the builder, U.S. 460 Mobility Partners, came with tremendous risk to the commonwealth. Tax dollars would be paid to the construction firms regardless of whether the Corps permits were granted. Virginia taxpayers assumed nearly all the liability.

The state report, released last month, says the former governor ignored these obvious risks with the project and kept Commonwealth Transportation Board members in the dark. While the administration's disclosure record upheld the letter of the law, officials did not reveal more than was required.

It is also worrisome that, even now, transportation officials cannot quantify the total loss on the project. Many of those details are shielded from public view due to the absence of a "right to audit" provision in the partnership agreement. The number of subcontractors hired, what they were paid and even their names cannot be scrutinized due to weak oversight and disclosure rules.

The report recommends a number of changes which could help improve this system and better protect taxpayers. For instance, a 30-day "cooling-off" period after a contract is negotiated would allow lawmakers to review deals that are struck largely in private. More than being reasonable, such a provision now seems necessary in future agreements.

The right to audit public-private partnerships should also be required when the state agrees to such a venture. The partnerships offer an attractive way to expedite progress on big-ticket projects like this, and we expect such arrangements to proliferate. But Virginia needs the specifics of these deals to be transparent in order to ensure they receive proper oversight. This project is a prime example of what can happen absent such protection.

It also highlights one of the problems we continue to voice about Virginia's Freedom of Information Act. This is a partnership involving the state, a project for public benefit funding by public dollars. All documents associated with the project should be open and the FOIA should make certain that's the case.

The commonwealth has spent hundreds of millions without moving any dirt. It cannot account for where the money went or who received it. State auditors cannot even access the documents to conduct a thorough review.

This experience is an embarrassment for Virginia, and it needs to be a learning experience. Without stronger oversight, without better disclosure requirements and without improved transparency, the commonwealth should steer clear of these public-private partnerships for construction projects from now on.

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