What is the current status of the Project?Following the signing of the comprehensive agreement and financial close in December 2012, design and preconstruction activities began in 2013, with public hearings and construction to follow.
The commonwealth has selected US 460 Mobility Partners as the “Selected Offeror” to finance, design and build the new U.S. Route 460. The selection was made after a two-year procurement process involving detailed review and evaluation of private sector proposals.
Why use a public-private partnership for the Project?
VDOT procured the Project with the assistance of the Office of Transportation Public-Private Partnerships (OTP3) under the provisions of the Public-Private Transportation Act of 1995 (PPTA), as amended, to secure private sector funds and maximize risk sharing to accomplish the development of the Project.
Additional information about the procurement process can be found in the PPTA Implementation Guidelines at http://vappta.org/resources/PPTA_Guidelines_FINAL_Revised_081205.pdf.
How did VDOT determine the successful offeror?
US 460 Mobility Partners was selected as the successful offeror because they offered a financial plan requiring the least public subsidy.
VDOT carefully reviewed the detailed proposals submitted by the three offerors to ensure that the proposals met the minimum requirements set forth in the RFDP. The detailed proposal that met the requirements set forth in the RFDP and that had the lowest nominal public funds amount was considered the apparent best value proposal.
Why is VDOT using a design-build-finance approach?
VDOT and OTP3 have explored different financial and commercial structures, and based on the specific characteristics of this Project, have concluded that a design-build-finance approach will deliver the maximum value to the commonwealth. Using a design-build-finance approach will allow a full-scope Project to be delivered within a shorter term contract period. In addition, the commonwealth will set and control the toll rates, and will retain the rewards associated with the potential increase in toll revenue. VDOT believes paying for the Project with a combination of public subsidies and tax exempt debt will result in lower overall Project costs.
What is the cost of the Project?
The Project cost is $1.393 billion. Project cost includes design, construction, toll collection set-up and administrative costs.
How will the Project be funded?
Funding sources are as follows:
- Public funding from VDOT – $753 million to $930 million
- Public funding from the Virginia Port Authority (VPA) – up to $250 million
- US 460 Funding Corporation of Virginia - $285 ($216 net proceeds) million from the sale of tax-exempt bonds.
VDOT has applied for a $422 million TIFIA loan. If approved, the funding could further reduce the public subsidy for VDOT, VPA and reduce the amount of tax-exempt bonds.
A non-profit corporation called the US 460 Funding Corporation of Virginia will issue tax-exempt bonds to finance the Project. The debt will be non-recourse to VDOT, the Commonwealth and US 460 Mobility Partners. The Funding Corporation will collect the tolls, and manage the toll collection system over the course of 40 years.
What is the US 460 Funding Corporation of Virginia?
The US 460 Funding Corporation of Virginia (“the Corporation”) is a nonstock, nonprofit corporation formed under the laws of the Commonwealth of Virginia on August 27, 2012 for the purpose of undertaking the Commonwealth Connector Project. The Corporation’s purposes and activities have been approved by Commonwealth Transportation Board. These activities include but are not limited to obtaining financing in furtherance of such purpose and entering into agreements such as the Comprehensive Agreement, financing agreements entered into on or about the financial close date, design-build contracts, operating agreements and other relevant documents. The Corporation is governed by a Board of Directors consisting of seven members. Two of such directors serve as ex officio by virtue of their service as Chief Financial Officer of VDOT and the Director of Debt Management of the Virginia Resources Authority. Four directors are appointed by CTB, and the remaining director is appointed by the Virginia Port Authority.
Will the road be tolled?
Yes. There will be no toll booths. All tolling will be electronic, requiring E-ZPass for vehicles wanting to use the facility. The revenue collected through tolling will be utilized to pay for a portion of the construction cost.
How much will the tolls cost?
The Commonwealth of Virginia will set and control toll rates. Once the road is ready to open, tolling will begin at approximately 7 cents/mile ($0.067) for cars and 21 cents/mile ($0.213) for trucks. This equates to $3.69 for cars and $11.72 for trucks for the entire 55 miles.
Toll escalation will be 3.5% per year. The escalation rate includes inflation, so there will be no additional escalation due to inflation.
The Commonwealth will earn any additional revenue generated by additional traffic on the road. Neither US 460 Mobility Partners nor the Funding Corporation will not receive any benefits from the toll revenue. In the event that actual traffic exceeds projected traffic on the road, the Commonwealth may reduce the toll rates or the escalation factor.
I was recently in the town of Wakefield, Virginia and noticed construction crews compiling what appears to be a large pile of dirt. What’s going on here?What you are seeing is a “test embankment.” This is an innovative soil testing methodology to determine the performance of the site soils over time under test conditions. This progressive testing methodology is the first of its kind for a roadway project in Virginia. The high water composition of the region’s soil makes the prediction of amount and rate of soil settlement challenging. The Project team is creating a test embankment site to measure settlement before constructing actual embankments.
What is an embankment?An embankment is an artificial barrier that typically is used to hold back water or to support a roadway, railway, or canal. These man-made barriers mainly consist of stones, rocks, and earth. Most have sloping sides, much like small hills, and are longer than they are tall. For the purpose of the Commonwealth Connector, embankments are created to support the roadway. A transportation embankment is typically used to support a road by keeping land flat or straight and uninterrupted. It also may be used to support lowlands, such as valleys, that may need to be crossed.
Why do a test embankment?The purpose of the test embankment program is to develop an understanding of the performance of the site soils under embankment loading and to develop analytical approaches to predicting the performance of future embankments constructed for the project. With the test embankment program, actual measurements will be made to document performance and soil movement activity.
How long will the dump trucks be hauling dirt?The hauling operation was completed in early December of 2013. Testing will occur at the site for approximately six months. The test embankment structure installed in Wakefield, VA, is approximately 300 feet square and 35 feet high, holding 66,000 cubic yards of soil.
Different companies keep calling me to access my property for different activities. Who are they and what are they doing?
First, we thank you for your patience as we continue with the pre-construction field activities. Much of the field work has been completed, but there is still more to do over the next several months. You should receive a phone call approximately one week prior to a consultant accessing your property. This phone call is an opportunity for the consultant to explain what kind of work they will be performing and when. Please take that opportunity to ask them questions about that work. The majority of the field activities are non-invasive though some work, such as the geotechnical soil borings, may require some clearing of trees for access. You will be notified of this work prior to access. Please refer to this pre-construction field activity list for further information.
Anyone accessing your property on behalf of the Commonwealth Connector project should be in marked vehicles and will carry proper identification.
When will the right-of-way acquisition start?Pre-construction field investigations and project design are continuing. Right-of-way acquisition efforts can only begin following the design public hearings.
Will there be enough traffic to justify a new roadway?
It is anticipated that vehicles using existing roadways, including existing Route 460 and I-64, will divert to the Commonwealth Connector because of its value in improved travel time, better reliability and less congestion. In addition, VDOT believes the new roadway will increase the safety of the existing Route 460, by lessening the number of heavy trucks and conflicts with small cars and local roads.
More information can be found in the Route 460 Investment Grade Traffic and Revenue Study completed for the Project in 2008 and updated in 2012. The report represents an assessment of existing traffic conditions, analysis, details of methodology and modeling approach, and the traffic forecast. In addition, the design-builder is performing traffic studies for the proposed interchanges along the corridor.
The Commonwealth Connector has been said to accommodate greater freight traffic from the Port of Virginia. Do you have any projections or data that support that the area will see an increase in Port of Virginia traffic?
The Port of Virginia is positioned to be the dominant east coast port when the Panama Canal expansion opens to traffic in 2015. In 2012, the Port of Virginia cargo was transported by rail (32%), truck (64%) and barge (4%). According, to the 2013 Virginia Port Authority Annual Report over the next twenty years, the cargo volume is expected to triple the current capacity of the port network in the United States.
The existing Route 460 is a key east-west link between the Port of Virginia, Interstate 95, and Interstate 85. Route 460 has become an important component of one of the major shipping and distribution corridors on the east coast. Growth in port related activities and economic development opportunities along the corridor will generate more traffic.
Why is the Commonwealth Connector important to the economic vitality of the Port of Virginia?
Annually, port-related business provides over 343,000 jobs, $41 billion in revenue, $13.5 billion in payroll compensation, and $1.2 billion in local tax revenues. These figures are anticipated to increase with the growth of the Port of Virginia. The Port of Virginia is uniquely positioned to capture the anticipated growth in deep-loaded container ships as the depth of the harbor can accommodate post-Panamax vessels and other deep-loaded container ships.
In addition, the Hampton Roads region is beginning to mobilize around the opportunity to develop 20 – 60 million square feet of supporting distribution center space. The Commonwealth Connector is another critical piece of the infrastructure needed to meet current and future Port of Virginia container ships.
The economic impact of the Project is significant. More than 4,000 jobs are estimated during the construction phase, with 14,000 long-term jobs estimated as a result of the Project.