Those who follow us on Social Media know we have been staunch advocates for P3s. Firm members have served on many public-private partnership panels. We are persuaded on P3’s as evidence mounts of public-private partnership success.
Recently, Transurban began seeing substantial returns on its investment in Northern Virginia’s Interstate 95 and Interstate 495 Express Lanes, three years after the stretch of high-occupancy-vehicle lanes on I-495 became operational.
The routes generated $28 million in toll revenues in the September 2015 quarter, a 257 percent increase over the same period the year before, and the average number of daily trips more than doubled to 84,000 according to the company.
Transurban Chairman Lindsay Maxsted attributed the delay in realizing major returns from these public-private partnerships to “the time it took to develop relationships with the state government, which controls the concession for the roads,” reported the Herald Sun.
Transurban formed a consortium with Fluor to design, build, finance and, over 80 years, operate and maintain the $2 billion I-495 project, which runs 14 miles in each direction from the Springfield Interchange to just north of the Dulles Toll Road.
The consortium financed the project through a mixture of equity, private activity bonds and a Transportation Infrastructure Finance and Innovation Act loan from the U.S. Department of Transportation. The lanes opened in 2012. Transurban then invested an additional $280 million in equity in 2014 to keep the project on a firm financial footing during the global economic downturn, the Virginia Department of Transportation (VDOT) reported.
Transurban and Fluor also teamed up to develop the I-95 Express Lanes, which run about 29 miles from the middle of I-95 in Stafford County to Fairfax County. The team provided $854 million of the $925 million it took to build the project, which opened to traffic in 2014. The team will operate and maintain the HOT lanes for 76 years, the VDOT reported.
We continue advocating for USDOT’s senior procurement executives to develop guidance that will encourage standardization of “state P3 authorities and practices,” including those used to consider unsolicited bids, non-compete clauses and other details in P3 and other types of agreements.
Martin J. Milita, Jr. Esq., is senior director at Duane Morris Government Strategies, LLC.
Duane Morris Government Strategies (DMGS) supports the growth of organizations, companies, communities and economies through a suite of government and business consulting services. The firm offers a range of government relations and public affairs services, including lobbying, grant writing; development finance consulting, media relations management, grassroots campaigning and community outreach. Milita works at the firm’s Trenton and Newark New Jersey offices.
Visit his blog at: https://martinmilita1.wordpress.com
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