New private toll road in Virginia draws opposition
Jones: ‘Who was responsible?’
By Matthew Ward
Suffolk News-Herald
Thursday, May 29, 2014
There are flaws in Virginia’s approach to public-private partnerships, and further legislation will be needed to fix the problems.
Those are among the conclusions Delegate Chris Jones (R-Suffolk) has reached even before the final scrutiny of what went wrong in the push for a new toll road between Suffolk and Petersburg.
Transportation Secretary Aubrey Layne froze contract spending on the $1.4-billion new Route 460 in March, with the U.S. Army Corps of Engineers steadfastly refusing to issue a permit for the preferred design alternative’s significant impact on wetlands.
But $300 million in public funds already had been spent, as former Gov. Bob McDonnell had pushed the project despite environmental concerns, calling it a strategically important transportation asset.
“This is something that should have never happened,” Jones, chairman of the House Appropriations Committee, said recently.
“It’s very concerning, not only to me but to my colleagues. I don’t know who was looking after the taxpayer in this process. That’s going to be part of my focus: to figure out, at the end of the day, who was ultimately responsible for this, and how we ended up where we are.”
Payments to the state’s private project partner, 460 Mobility Partners, are frozen while a supplemental study of environmental impacts required by the Corps is completed. But the project costs continue.
Virginia Department of Transportation spokeswoman Tamara Rollison said six firms have together billed VDOT a little more than $1 million from December and through March for their help with the environmental study.
Work included “preparing documentation, including field and research work, to study the environmental impacts” of the project’s five proposed alternatives, Rollison wrote in an email. Canceling the project is a sixth option.
But even as that review is in process, Gov. Terry McAuliffe announced last week that he also intends to reform the public-private partnership process to avoid similar situations in the future.
The Commonwealth Transportation Board passed a resolution to “increase transparency and competition and to better evaluate the public’s risk” for future Public Private Transportation Act Projects.
“Protecting every dollar that Virginia taxpayers send to Richmond is Job One for my administration,” McAuliffe stated in a press release. He has asked Layne “to work with the CTB to evaluate the state’s approach to public-private partnerships to ensure that we are giving Virginians the maximum return on their investment in those projects.”
Jones criticized McAuliffe’s predecessor for pushing through the 460’s public-private deal without General Assembly approval. “We have checks and balances for a reason,” he said.
If the project is canceled, Virginia taxpayers could be out of pocket $400 to $500 million all told, Layne last month told a hearing of the committee Jones chairs.
Layne and department Commissioner Charles Kilpatrick gave a chronology of the troubled project, starting with the legislature in early 2003 authorizing VDOT to solicit PPTA proposals.
Procurement was postponed in October 2009 after the private sector deemed the project financially unfeasible without a large public subsidy.
Procurement was terminated seven months later, but the project remained a high priority for McDonnell, whose administration pushed ahead with a new procurement structure that emphasized tolls on the new road.
In 2011, a bond sale was arranged after an independent review found the project would need significant public funding, and after the private sector indicated yet more public funding was required, the Virginia Port Authority — shortly after McDonnell cleared out its board — committed $250 million.
Even after the Corps expressed concern regarding the environmental impact of the project, VDOT was directed to “consider all options to advance the project.”
The contract with Mobility Partners, committing $904 million in highway funding, was signed in December 2012, weeks before the legislative session convened.
Jones said that the project should have been re-bid after no private support emerged, adding that individuals need to be held accountable.
“The bottom line is, throughout the whole process, there should have been much better judgment used in how they went about the job of building this road,” he said.
Jones plans to “sit back down again with the secretary and the commissioner to get answers to every unanswered question,” to “further refine the PPTA process.”
“This was never the intent of the legislation,” he added.