The Facts About Toll Road Privatization and How to Protect the Public

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The Facts About Toll Road Privatization and How to Protect the Public

The Facts About Toll Road Privatizationand How to Protect the PublicAppendices B and C:Completed, Underway and ProposedPrivatization ProjectsU.S. PIRG Education Fund


Private Roads, Public CostsThe Facts About Toll Road Privatizationand How to Protect the PublicAppendices B and C:Completed, Underway and ProposedPrivatization ProjectsU.S. PIRG Education FundWritten by:Phineas Baxandall, Ph.D.U.S. PIRG Education FundKari Wohlschlegel and Tony Dutzik,Frontier GroupSpring 2009


AcknowledgmentsThe authors thank Robert Puentes of the Brookings Institution, Ellen Dannin of the Penn State DickinsonSchool of Law, Dennis Enright of NW Financial, and Michael Likosky of New York University’sInstitute for Public Knowledge for their thoughtful review and insightful suggestions. Thanks also toJosh Bogus for his research support in the early phases of this project. Finally, thanks to Susan Rakovof Frontier Group and to Carolyn E. Kramer for their editorial assistance.U.S. PIRG Education Fund thanks the Ford Foundation for making this project possible.The authors bear responsibility for any factual errors. The recommendations are those of U.S. PIRGEducation Fund. The views expressed in this report are those of the authors and do not necessarily reflectthe views of our funders or those who provided editorial review.Copyright 2009 U.S. PIRG Education FundWith public debate around important issues often dominated by special interests pursuing their own narrowagendas, U.S. PIRG Education Fund offers an independent voice that works on behalf of the publicinterest. U.S. PIRG Education Fund, a 501(c)(3) organization, works to protect consumers and promotegood government. We investigate problems, craft solutions, educate the public, and offer Americansmeaningful opportunities for civic participation. www.uspirg.orgFrontier Group conducts research and policy analysis to support a cleaner, healthier and more democraticsociety. Our mission is to inject accurate information and compelling ideas into public policy debates atthe local, state and federal levels. www.frontiergroup.orgFor additional copies of this report, or to obtain a detailed listing of completed and proposed road privatizationprojects across the country, please visit www.uspirg.org.Cover: Photo by Geoffrey Holman, istockphoto.com; photo modification by Harriet EcksteinTraffic sign images that appear on pages 5, 6, 17, 27, 27, 29 and 37 are from the Manual of Traffic Signs, by RichardC. Moeur (http://www.trafficsign.us/) Copyright 1996-2005 Richard C. Moeur. All rights are reserved.Design and layout: Harriet Eckstein Graphic Design


Table of ContentsAppendix B: 1Completed Privatization ProjectsAppendix C: 8Privatization ProjectsProposed or Underway


Appendix B:Completed Privatization ProjectsState: AlabamaRoad: Alabama River Parkway/MontgomeryExpresswayConcessionaire: Built by United TollSystems, purchased by Macquarie in 2006and later by American Roads.Contract Type: design, build, finance, operateand maintainProject Details: A 12.5-mile privately builttollway in Montgomery County.Cost/Financing: COSTS - $12 million(U.S. DOT)Status: Opened in 1998. Now owned byAmerican Roads (American Roads).Sources: U.S. Department of Transportation,Federal Highway Administration,U.S. Toll-Based Highway Improvements:1992-2008, January 2009; American Roads,Montgomery Expressway, downloaded fromwww.montgomeryexpressway.com/, 29January 2009.State: AlabamaRoad: Emerald Mountain ParkwayConcessionaire: Built by United Toll Systems,purchased by Macquarie in 2006 andlater by American Roads.Contract Type: design, build, finance, operateand maintainProject Details: A 4.5-mile privately builttollway in Montgomery County.Cost/Financing: COSTS - $4 million (U.S.DOT)Status: Opened in 1998. Now owned byAmerican Roads (American Roads).Controversy: A 50-cent toll hike in 2007triggered a consumer boycott of the road,which led to a 50 percent decrease in traffic.(Mullinax)Sources: U.S. Department of Transportation,Federal Highway Administration,U.S. Toll-Based Highway Improvements:1992-2008, January 2009; AmericanRoads, Emerald Mountain Expressway,downloaded from www.emeraldmountainexpressway.com,29 January 2009;Kenneth Mullinax, “Bridge BoycottTaking Toll on Profits,” Montgomery Advertiser,24 March 2007.State: AlabamaRoad: Black Warrior Parkway/TuscaloosaBypassConcessionaire: Built by United TollAppendix B


Systems, purchased by Macquarie in 2006and later by American Roads.Contract Type: design, build, finance, operateand maintainProject Details: A 7.5-mile privately builttollway in Tuscaloosa CountyCost/Financing: COSTS - $25 million(U.S. DOT)Status: Opened in 1994. Now owned byAmerican Roads (American Roads).Sources: (1) U.S. Department of Transportation,Federal Highway Administration,U.S. Toll-Based Highway Improvements:1992-2008, January 2009; (2) AmericanRoads, Tuscaloosa Bypass, downloaded fromwww.tuscaloosabypass.com, 29 January2009.State: AlabamaRoad: Foley Beach ExpressConcessionaire: Built by Baldwin CountyBridge Company, later acquired by AmericanRoadsContract Type: design, build, finance, operateand maintainProject Details: The highway includes a7.5-mile federally funded portion, a 5-mileprivately built portion transferred to thecounty and operated free of tolls, and atoll bridge over the Intercoastal Waterway.(Toll Roads News)Cost/Financing: COSTS - $25 million total(Toll Roads News)Status: Opened in 2000. Now owned byAmerican Roads (American Roads)Sources: (1) “Investor Pike: Foley BeachExpress Opens in Coastal Alabama,” TollRoads News, 3 August 2000. (2) AmericanRoads, Beach Express, downloaded fromwww.beachexpress.com, 29 January 2009.State: CaliforniaRoad: SR 91 Express LanesConcessionaire: The California PrivateTransportation Company (CPTC) originallydeveloped the road. It has since beentaken over by Orange County TransportationAuthority.Contract Type: originally built as a design,build, finance, operate and maintainprojectProject Details: CPTC entered into a leaseagreement with Caltrans to construct andoperate a toll facility in the median of anexisting highway (Lowenthal).Cost/Financing: (1) COSTS - $126 million.(2) FINANCING - CPTC provided $139million in financing in exchange for a 35-year lease (Lowenthal).Status: The road is now owned and operatedby Orange County TransportationAuthority.Controversy: The agreement had a noncompeteclause that prevented Caltransfrom making improvements on competingroadways. When Caltrans needed tomake safety improvements, it was eventuallyforced to buy out the consortium(Lowenthal).Sources: Testimony of California StateSenator Allen Lowenthal, 24 May 2007State: CaliforniaRoad: South Bay ExpresswayConcessionaire: South Bay Expressway LP- Macquarie is the primary investorContract Type: design, build, finance, operateand maintainProject Details: The road extends from SR54 in Spring Valley to Otay Mesa Roadnear the international border crossing (AllBusiness).Cost/Financing: (1) COSTS - The projectcost $840 million (All Business). (2) FI-NANCING - private investment was themain source of financing, in exchange fora 35-year lease (Toll Roads News - SanDiego)Status: The road officially opened on November19, 2007 (All Business). Macquariewas initially granted a 35-year concession,however they have since requested anextension. The legislature has agreed to aPrivate Roads, Public Costs


10-year extension, subject to local support.Local governments have indicated that theywant to relax restrictions on the expansionof parallel roads, so negotiations are underway(Toll Roads News - San Diego).Controversy: The project was late andoverbudget, for a variety of reasons. Theconcession was finalized in 1991, but it took16 years to build the road (Toll Roads News- Schwarzenegger).Sources: (1) “South Bay Expressway, SanDiego’s First Toll Road, Opens,” All Business,16 November 2007. (2) “San Diego’sSouth Bay Expressway Opened Monday,”Toll Roads News, 23 November 2007. (3)“Schwarzenegger Making New Push forPPPs & Union Critic Hits Two Toll RoadConcessions,” Toll Roads News, 28 November2007State: ColoradoRoad: Northwest ParkwayConcessionaire: Owned by NorthwestParkway Public Highway Authority,representing Broomfield, Lafayette andWeld counties. Leased to companies fromPortugal and Brazil - Brisa Auto-Estradasde Portugal SA and Companhia de ConcessoesRodoviarias of Sao Paulo, Brazil,which is one of the largest toll-road operatorsin Europe (Dawid).Contract Type: leaseProject Details: The Parkway runs fromI-25 north of Denver to US 36 in Broomfield.The concession agreement providesfinancing for an extension over US 36 toCO 128 in Broomfield at the western end ofthe project. The Parkway was initially builtby the Authority, but after years of financialproblems, the Authority began looking forconcessionaires (Toll Roads News).Cost/Financing: (1) COSTS - it cost $415million to construct the tollway (MESalek).(2) FINANCING - the Authority usedprivate money to finance the construction(Toll Roads News). (3) FEE – The concessionairespaid $603 million for the toll roadin exchange for a 99 year lease (Toll RoadsNews). (4) TOLLS - Tolls increasedimmediately from $2 to $3, and beginningin 2010 they will increase annually by atleast 2% of the CPI or GDP (CoPIRG).Status: The road opened in 2004 and negotiationsfor a lease began in April 2007.Controversy: The Authority must compensatethe concessionaire if previouslyunplanned road or transit projects arebuilt in the corridor and hurt revenues.The concessionaire recently stated that itbelieves a proposed project violates thisagreement (Leib).Sources: (1) CoPIRG, Northwest ParkwayWhite Paper, 10 December 2007. (2) IrvinDawid, “Colorado Toll Road GoesPrivate,” Planetizen, 18 April 2007. (3)Jeffrey Leib, “Toll Firm Objects to Workon W. 160th,” Denver Post, 23 July 2008.(4) “Colorado Highways: Public HighwayAuthority Tollways,” MESalek.com, 4September 2007. (5) “Northwest ParkwayColorado Toll Concession Finalized withFinancial Close,” Toll Roads News, 19 November2007.State: FloridaRoad: Southern Connector ExtensionConcessionaire: Road was built by a jointventure of: Orlando Orange CountyExpressway Authority (OOCEA), WaltDisney World, Osceola County, privatelandowners, the Reedy Creek ImprovementDistrict, and Florida’s TurnpikeDistrict. It is currently operated by FloridaTurnpike District.Project Details: The road makes it possibleto travel from Walt Disney Worldto Orlando International Aiport withouthaving to drive on the congested I-4 (NationMaster).Cost/Financing: (1) COSTS - Constructioncost $153 million. (2) FINANCING - $74million came from private party contributions(Nation Master). (3) TOLLS - tollsare charged for revenueAppendix B


Status: The road opened on June 23, 1999(Nation Master).Sources: “Southern Connector,” NationMaster, downloaded from www.nationmaster.com/encyclopedia/Southern-Connector-(Orlando).State: IllinoisRoad: Chicago SkywayConcessionaire: A Cintra-Macquarie consortiumContract Type: lease, operate, maintainProject Details: Chicago leased the Skyway,which arches over the Calumet Riverbefore connecting with the Indiana East-West Toll Road at the border.Cost/Financing: (1) FEE - Cintra-Macquariepaid $1.8 billion for a 99-year lease(Williams)Status: The road is operated by Cintra-Macquarie.Controversy: (1) No public interest studywas done before state and local politiciansagreed to the deal (theNewspaper). (2)Many residents are upset that a significantportion of the money was allocated to nonhighwaypurposes (Barlas).Sources: (1) Stephen Barlas, “P-P-P Promise?”Roads and Bridges, August 2007. (2)“GAO Questions Wisdom of Public PrivatePartnerships,” theNewspaper.com, 28July 2008. (3) Leslie Williams, “LeasingAlligator Alley - Benefit or Boondoggle?”Naples Daily News, 26 April 2008.State: IndianaRoad: East-West Toll RoadConcessionaire: Statewide Mobility Partners,a joint venture between Cintra-Macquarie(Kelly)Contract Type: lease, operate, and maintainProject Details: Governor Mitch Danielsannounced in 2006 a plan to lease theIndiana East-West Toll Road, a 157-milehighway that connects with the ChicagoSkyway. Since taking control of the road,the company has been making investmentsto improve it, including $40 million toinstall electronic tolling called I-Zoom,$6 million for a new fleet of 40 snowplows,added toll booths at a few congested areas,and a new salt barn (Kelly).Cost/Financing: (1) FEE - $3.8 billion for a75 year concession term (Toledo BusinessJournal)Status: The consortium formally assumedresponsibility on June 29, 2006 (Kelly).Controversy: (1) The agreement includes anon-compete clause that prevents Indianafrom upgrading to a four-lane, dividedhighway along any 20-mile stretch of roadwithin 10 miles of the toll road for at least55 years (Saunders). (2) Macquaire has toldinvestors that they will make a profit offtheir investment within 15 years (Saunders).(3) Full details of the agreement werenot disclosed until after negotiations werefinalized (Saunders).Sources: (1) Niki Kelly, “Toll Road DetractorsAir Gripes With State,” The JournalGazette, 22 June 2008. (2) “Indiana LuringOhio and MI Firms,” Toledo BusinessJournal, 1 January 2007. (3) Burt Saunders,“Alligator Alley: Leasing Would be SellingOur Soul,” South Florida Sun-Sentinel, 8September 2008.State: South CarolinaRoad: Southern Connector (I-185)Concessionaire: A 63-20 was created, calledConnector 2000 Association. The privateinvestor partner was Interwest CarolinaTransportation Group, LLC. Project advisors:Lehman Brothers; HaynsworthSinkler Boyd PA; Southern MunicipalAdvisors; Leatherwood, Walker Todd &Mann; Wilbur Smith & Associates (InnovativeFinancing).Contract Type: Originally a finance, design,construct, and operate. Now the operatoris considering leasing the road.Project Details: The Connector forms aPrivate Roads, Public Costs


elt route around the south of the Greenvillearea (Toll Roads News). The Connectorwas initially built by a 63-20 non-profit,the Connector 2000 Association. Afterlower-than-expected revenues, the Associationbegan looking for bids to operate aconcession (Toll Roads News).Cost/Financing: (1) COSTS - the projectcost $240 million. (2) FINANCING - thenon-profit issued tax exempt bonds to financethe road in exchange for operatingit for 50 years (Innovative Finance). (3)TOLLS - toll revenue averages $5.4 millionper year (Toll Roads News)Status: The road opened in March 2001(Plunkett). In the fall of 2007, Connector2000 Association began looking for a concessionaireto take over the operation andfinancial liability of the toll road. Theseplans have been temporarily suspended(Toll Roads News). In fall 2008, Standard& Poor’s downgraded the Connector’sbonds to an extremely speculative “CC”rating, projecting that the associationwould default on its bonds by January 2010in the absence of a debt restructuring.(Connector)Controversy: (1) The Government AccountabilityOffice found that a significantportion of the up-front payments derivefrom the tax-exempt status of the bondsissued and the depreciation deductions(theNewspaper). (2) Revenues have fallenfar short of projections. The analyst WilburSmith Associates was asked to prepare afinancial analysis of the road, which wouldbe used to solicit funding. After showinghigh revenue projections, investors werepersuaded to finance the project, and WilburSmith collected more than $12 millionoff the subsequent contracts (Plunkett).Sources: (1) “Southern Connector - Greenville,South Carolina,” Innovative Finance,May 2002. (2) “GAO Questions Wisdom ofPublic Private Partnerships,” theNewspaper.com, 28 July 2008. (3) Chuck Plunkett, “No2-Way Street,” Denver Post, 25 October2006. (4) “Wiregrass Pike ‘Not-for-Profit’Tollroad Proposal Takes Hit in Fl Panhandle,”Toll Roads News, 11 June 2008. (5)Connector 2000 Association, Inc., EventNotice No. 2008-9-4, 4 September 2008.State: TexasRoad: Camino Colombia Toll RoadConcessionaire: Initially constructed asa private toll road, though it is currentlystate ownedContract Type: Failed private toll roadProject Details: The toll road bypassesLaredo, stretching from Camino ColombiaInternational Bridge to I-35 at exit 24.The route was originally built with privatefinancing, however it had extremely lowrevenue. In late 2003, the toll road was foreclosedon and the state sold it at auction.TxDOT bid $11 million to purchase theroad, but was beaten by John Hancock LifeInsurance Company with a bid of $12.1million (source for Hancock bid - Plunkett).The route was immediately closed toall traffic, forcing TxDOT to buy it backfor $20 million (Nation Master).Cost/Financing: (1) COSTS - $90 millionto construct the road (Nation Master). (2)FINANCING - For construction, $75million came from to private companies,and the remaining $15 million was donatedin land and capital from families in thearea (Plunkett) (3) TOLLS - toll revenueshave missed projections by 96 percent(Plunkett)Status: The road is currently owned andoperated by TxDOT (NationMaster)Controversy: See Project Details sectionSources: (1) “Texas State Highway 255,”NationMaster, downloaded from www.nationmaster.com/encyclopedia/Texas-State-Highway-255. (2) Chuck Plunkett,“No 2-Way Street,” Denver Post, 25 October2006State: UtahRoad: Adams Avenue ParkwayAppendix B


Concessionaire: Adams Avenue Parkway,Inc.Contract Type: Private toll roadProject Details: A one-mile parkway linkingI-84 to Adams Avenue. The road wasbuilt by local land-owners as a for-profitventure.Cost/Financing: COSTS - $12 million.Status: The road opened in 2001.Sources: U.S. Department of Transportation,Federal Highway Administration,U.S. Toll-Based Highway Improvements:1992-2008, January 2009; Adams AvenueParkway, Inc., Welcome, downloaded fromadamsavenueparkway.com, 29 January2009State: VirginiaRoad: Dulles GreenwayConcessionaire: The contract was originallyawarded to Toll Road Investors PartnershipII (TRIP II), a consortium comprised ofShenandoah Greenway Corp., Autostrade,and Brown & Root. Eventually it was leasedto Macquarie Infrastructure Group, withAutostrade in control of maintenance andoperations (Barlas)Contract Type: ConcessionProject Details: The Dulles Greenway isan extension of the state-owned DullesToll Road in Loudoun County. The roadopened in 1995 and was financed by TRIPII. In 2005, TRIP II sold the bulk of itsshares to Macquarie. In exchange forextending the lease, Macquarie agreed tomajor improvements on the road, includingthe completion of a new lane, new interchanges,and expansion of toll plazas (TollRoads News).Cost/Financing: (1) FEE - Macquarie leasedthe road for $625 million, and the leasewas extended from 40 to 60 years (TollRoads News). (2) TOLLS - Toll increasesbetween 2013-2020 can be equal to theincrease in the CPI plus one percent, theincrease in real GDP, or 2.8 percent (USDOT)Controversy: 1) Low ridership on theGreenway led to problems, resulting intoll reductions and a potential TRIP IIdefault on its loan. This eventually led toMacquarie purchasing the concession fromTRIP II in 2005 (Barlas). 2) In early 2008,people began lobbying for a freeze on tollrates and increasing control on the concessionaire.However, the state legislaturepassed a law in April guaranteeing the rightto increase tolls annually by the CPI plus 1percent, and giving the State CorporationsCommission the right to approve furthertoll increases (Toll Roads News).Sources: (1) Stephen Barlas, “P-P-P-Promise?” Roads and Bridges, August 2007.(2) “Dulles Greenway Gets AdvantageousNew Concession Regulation,” Toll RoadsNews, 16 March 2008. (3) U.S. Departmentof Transportation, Innovation Wave:An Update on the Burgeoning Private SectorRole in US Highway and Transit Infrastructure,National Council on Public PrivatePartnerships, 18 July 2008State: VirginiaRoad: Pocahontas ParkwayConcessionaire: The road was originallycontrolled by the Pocahontas Parkway Association,a non-profit consortium. It wastaken over by Transurban after the PPA washeaded for default (Toll Roads News).Contract Type: enhance, manage, operate,maintainProject Details: The 8.8-mile road servesas a bypass around Richmond and openedto traffic in 2002. In 2006, Transurbanacquired the rights to operate the road for99 years, agreeing to construct a 1.58-mileextension of the road to Richmond InternationalAirport (USDOT).Cost/Financing: (1) COSTS - Initialconstruction cost $381 million. (2) FEE- Transurban paid $548 million for a 99-year lease (USDOT). (3) FINANCING- the initial construction was financed bybonds issued by the non-profit (USDOT).Private Roads, Public Costs


(4) TOLLS - static tolls are charged andcollected by TransurbanStatus: The road opened in 2002.Controversy: 1) GAO found a significantportion of the up-front payments derivefrom the tax-exempt status of the bondsissued and depreciation deductions. GAOcalculated that the annual taxation cost of$1.2 billion in tax-exempt bonds issued forVA’s Pocahontas Parkway, SC’s SouthernConnector, and Nevada’s Las Vegas Monorailwas as much as $35 million a year. SCand VA also lose up to $3 milion a year instate tax revenue (theNewspaper). 2) Duringfirst year of operation, actual traffic/tollrevenues were 43 percent less than projected.The revenue has increased, but notto expected levels, largely because of slowerthan expected growth in the Richmondarea and Richmond International Airport.Refinanced in 2006 (Replogle).Sources: (1) “GAO Questions Wisdom ofPublic Private Partnerships,” theNewspaper.com, 28 July 2008. (2) Michael Replogle,Testimony before the Committee on Transportationand Infrastructure, Subcommiteeon Highways and Transit, 24 May 2007. (3)“Wiregrass Pike ‘Not-for-Profit’ TollroadProposal Takes Hit in FL Panhandle,” TollRoads News, 11 June 2008. (4) US Departmentof Transportation, Federal HighwayAdministration, Public Private Partnerships:Virginia Route 895, downloaded from www.fhwa.dot.gov/PPP/case_studies_pocahontas.htm,30 January 2009.Appendix B


Appendix C:Privatization Projects Proposedor UnderwayState: Alabama and FloridaRoad: I-10 ConnectorConcessionaire: A non-profit corporationin Alabama, Focus 2000, was created todesign, build and operate the Alabamatoll road (Ingram - Plans). Focus 2000 iscomposed of potential investors, businessowners, and the Chambers of Commercein the affected areas. (MacDonald) A nonprofitfor the Florida sector will be createdin the future (Ingram - Connector)Contract Type: Two private, non-profitcorporations will design, contruct, andoperate the toll road using private funds(Ingram - Connector).Project Details: The toll road is intendedto be a north-south connection betweenthe Wiregrass region in Alabama and I-10in the Florida Panhandle. The main sectionof the road will extend from Dothan,Alabama to I-10. Secondary proposalsinclude extending the road northwest fromDothan to Montgomery, and extendingthe road south from I-10 to Panama City(Wiregrass Pike).Cost/Financing: (1) COSTS - $400 million(Ingram - Top 10). (2) FINANCING- The road will be built using a non-profitcorporation that will use private financing(Wiregrass Pike). (3) CONCESSIONTERM - Five years after construction ifcompleted, as long as the bonds are paidoff (Ingram - Connector)Status: Many of the necessary parties inAlabama have signed off on the project,though talks with Florida officials havestalled due to worries that traffic on US231 will be diverted. Focus 2000 hopesFlorida counties will formally support theproject by summer 2009. A feasibility trafficstudy will be completed in March 2009,after which Focus 2000 will go to the bondmarket for funding (Ingram - Top 10). Theroad must still clear environmental review,and it is possible that the Florida segmentof the road, which will cross wetlands, mayfail the review process (MacDonald).Controversy: (1) There has been muchcriticism about the lack of informationprovided to the general public, such astraffic forecasts, revenue estimates, financingdetails, and detailed routes. For thisreason, Washington County, FL, votedagainst the project. Supporters of the road,however, say it can be built without theCounty’s support by routing it throughJackson County instead (Wiregrass Pike)(2) There is also criticism of the financingPrivate Roads, Public Costs


structure of the road and its reliance ona non-profit corporation. The other twomajor roadways built using this model,the Pocahontas Parkway and GreenvilleSouthern Connector, both failed becausethe developers have an incentive to overinvestas their fees are related to the capitalcosts of the project (Wiregrass Pike).Sources: (1) Debbie Ingram, “ConnectorRoad Called Economic ‘Foyer’ For Florida,Alabama,” Jackson County Floridian, 5 May2008. (2) Debbie Ingram, “Plans for TollRoad Connector to I-10 in Florida Announced,”OANow.com, 6 May 2008. (3)Debbie Ingram, “Top 10 Stories: No. 7:Toll Road Proposed,” Dothan Eagle, 24December 2008. (4) Ginny MacDonald,“Group Proposes Montgomery-to-PanamaCity Toll Road,” The Birmingham News, 15May 2008. (5) “Wiregrass Pike ‘Not ForProfit’ Tollroad Proposal Takes Hit inFL Panhandle,” Toll Roads News, 11 June2008.State: AlabamaRoad: North-South HighwayConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The four-lane road willrun from the Shoals to Mobile (Rawls,Beyerle).Cost/Financing: (1) COSTS - $5.3 billion(Beyerle). (2) FINANCING - The statehas allocated $7.8 million to study the proposal(Beyerle). Lawmakers have stated thatthey intend to use both public and privatefinancing (Sherer).Status: In May 2008, Lieutenant GovernorFolsom announced the creation of aCommission on Public Private PartnershipProjects to study ways to finance new roads.The Commission was scheduled to reportits findings in February 2009 to the Legislature,and will include infomration on theNorth-South highway (Folsom). Before theroad can be built with private financing, theSenate would need to approve a toll roadbill. The House has already passed legislationauthorizing the state toll authority toenter into a public-private partnership, andthe Senate is expected to pass the necessarylegislation (Sherer).Sources: (1) Dana Beyerle, “North-SouthFreeway: $5.3 Billion,” Times Daily, 28October 2008. (2) Jim Folsom Jr., “TransportationInfrastructure in Alabama is ata Crossroads,” The Leeds News, 20 August2008. (3) Phillip Rawls, “Folsom WantsCommission to Study West Alabama Freeway,”The Associated Press, 8 May 2008. (4)Dennis Sherer, “Highway to Mobile WouldTake Public/Private Effort,” Times Daily, 9November 2008.State: AlabamaRoad: US 280 EastConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The State DOT wants toconstruct elevated lanes on US 280 fromI-459 to Double Oak Mountain (AssociatedPress)Cost/Financing: (1) COSTS - undetermined.(2) FINANCING - The road willbe financed through toll revenue, probablyunder a privatization agreement (NBC13)Status: Figg Engineering Co. is studyingthe project to determine how to integratethe elevated 280 traffic into I-459, as wellas how to pay for the lanes (ConstructionEquipment Guide).Sources: (1) “Toll Roads Could Be AlabamaHighway Funding Answer,” NBC 13, 3 July2008. (2) “ALDOT Director Says US 280Project Would Require Tolls,” ConstructionEquipment Guide, 30 January 2008. (3)“Transportation Director’s Goals IncludePossible Ala. Toll Road,” The AssociatedPress, 31 December 2007.State: AlabamaRoad: Patriot Parkway - Huntsville SouthernBypassAppendix C


Concessionaire: Undetermined. URS hasbeen selected to do a traffic and revenuestudy to assess the feasibility of the road(Toll Roads News).Contract Type: UndeterminedProject Details: The proposal is to constructa mostly 6-lane bypass aroundRedstone Arsenal in Hunstville. A 4-milebridge will be built over wetlands (TollRoads News).Cost/Financing: (1) COSTS - The projectwill cost between $750 to $800 million(Toll Roads News). (2) FINANCING- Private financing will probably be used(Toll Roads News).Status: A lack of money at the state levelhas caused delays in studying the Parkway(Clines).Controversy: There are environmentalconcerns about the road. Nearly a third ofthe road will traverse the swamps of theTennessee River which may cause ecologicalproblems. Currently the proposal is tobuild a bridge structure to protect thesewetlands (Toll Roads News).Sources: (1) Keith Clines, “Battle ChallengesMayor on Projects; Spencer SaysThey’re Already in Works,” The HuntsvilleTimes, 4 October 2008. (2) “Huntsville ALto get 21km Tolled Southern Bypass,” TollRoads News, 4 September 2007.State: AlabamaRoad: Montgomery Outer LoopConcessionaire: UndeterminedProject Details: The road will serve as anouter loop around Montgomery, connectingI-65 to I-85 (Associated Press).Cost/Financing: (1) COSTS - undetermined.(2) FINANCING - undetermined.The Governor has stated that this roadmay be constructed with private finacing,or joint public-private financing, if the tollrevenue is not sufficient to cover constructioncosts (Rawls - Transportation Secretary).The DOT director has stated theproject cannot be built with toll revenuesalone, so they are currently working to createa state-federal-city-county toll package.$60 million has already been invested inconstruction (Associated Press).Status: No visible action has been takenrecently. Initially, the DOT’s researchindicated the loop would not be viable as atoll road (Rawls - AL Governor Eyeing).However, it has been mentioned more recentlyas a possible toll road by the governorand DOT director. In December 2007,the state DOT director indicated that hewas working on a state-federal-city-countytoll package to complete the roadway (AssociatedPress).Sources: (1) “ALDOT Director SaysUS 280 Project Would Require Tolls,”Construction Equipment Guide, 30 January2008. (2) “Transportation Director’s GoalsInclude Possible Ala. Toll Road,” The AssociatedPress, 31 December 2007. (3) PhillipRawls, “Alabama Governor Eyeing TollsFor Some New Roads,” The Associated Press,23 September 2007. (3) Phillip Rawls, “AlabamaGovernor, Transportation SecretaryPromote Toll Roads,” The Associated Press,26 January 2008State: AlaskaRoad: Knik Arm Bridge Project (Officiallycalled Don Young’s Way)Concessionaire: The Knik Arm Bridge andToll Authority (KABATA) has shortlistedtwo construction consortiums: BouyguesTravaux Publics SA and Macquarie Bank.Attorneys at Nossaman, Guthner, Knox &Elliot are advising on the contract, whileCitigroup Global Markets is serving as financialadvisor (Public Works Financing).Contract Type: Concession - design, build,operate, maintainProject Details: The bridge would connectmostly undeveloped land near Port MacKensieto Anchorage through GovernmentHill. There may also be a connection fromthe bridge to Ingra and Gambell streets(Hopkins).10 Private Roads, Public Costs


Cost/Financing: (1) COSTS - Project willcost $667 million if construction beginsin 2009 (Public Works Financing). Somebelieve the project will actually cost morethan $1 billion when extra costs are takeninto account, such as cost of delays, financingcosts, and potential permitting delaysor lawsuits. The connection from thebridge to Ingra and Gambell streets willcost an additional $200 million (Hopkins).(2) FINANCING - The US DOT has allocated$600 million of tax-exempt privateactivitybonds (Saskal). Private finacningwill be used for the majority of the costs(Public Works Financing). (3) CONCES-SION FEE - KABATA predicts that itwill receive an upfront fee of $37 millionand lease payments totalling $381 million(Public Works Financing). (4) CONCES-SION TERM - KABATA estimates theconcession will be for 60 years (PublicWorks Financing). (5) KABATA predictsa round trip toll rate of $8 to $12 (PublicWorks Financing)Status: The state and federal governmentare requiring a review of the bridge’s projectedcosts before moving forward withthe project. The Authority has already filedan environmental impact statement, butthe Federal Highway Administration willnot issue a record of decision until anothercost estimate is conducted. Once a recordof decision is released, the next step wouldbe to issue a detailed request for qualifications(Saskal).Controversy: There are numerous pointsof controversy surrounding this project:(1) Governor Palin has expressed concernover the maximum damages KABATAor the state would be forced to pay to theconcessionaire if government permits aredelayed or not issued, or if traffic fallsbelow a guaranteed floor (Public WorksFinancing). (2) The legislation authorizingKABATA to enter into privatizationagreements does not require public review,comments on the draft contract, orlegislative approval of the final contract.Additionally, affected communities are notrequired to sign off on the final contract oron scheduled toll increases, and concessiondeals can be signed for an unlimited numbersof years (Public Works Financing).(3) Congressman Don Young requestedthe initial earmark for the bridge. Thereis some worry about potential conflicts ofinterest, as his son-in-law owns land wherethe bridge will be built and will profit fromits construction (Burke). (4) Constructionof the bridge may threaten a population ofbeluga whales (Burke).Sources: (1) Garance Burke, “PalinSupports $600 Million ‘Other’ BridgeProject,” International Business Times, 16September 2008. (2) Kyle Hopkins, “KnikArm Bridge Hits Fork in the Road,” AnchorageDaily News, 9 June 2008. (3) “KnikArm Bridge Hits a Snag,” Public WorksFinancing, June 2008. (4) Rich Saskal,“Alaska’s Knik Arm Bridge Held Up AmidQuestions of Cost, Necessity,” The BondBuyer, 7 July 2008.State: ArkansasRoad: No road has been identifiedProject Details: Officials have passed enablinglegislation for concession deals andregional mobility authorities. However,no viable road for privatization has beenidentified because rural areas do not haveenough traffic to justify the investment.State: ArizonaRoad: Hassayampa Freeway NetworkConcessionaire: UndeterminedContract Type: Undetermined - Public,public-private, and private options areunder considerationProject Details: The Maricopa Associationof Governments and other stakeholdersdesigned a conceptual transportationframework for the Hassayampa Valley.Private toll roads are one option underconsideration for financing the plan.Appendix C 11


Cost/Financing: Estimated $22 billion(Leuck)Status: Funding for the highway networkis not included in the regional transportationplan.Sources: (1) Curtis Leuck and Associates,I-10 Hassayampa Valley Roadway FrameworkStudy, prepared for the Maricopa Associationof Governments, September 2007.State: ArizonaRoad: Val Vista FreewayConcessionaire: UndeterminedContract Type: Listed as a potential publicprivatepartnership by Arizona DOTProject Details: A 46-mile greenfield projectproposed primarily for Pinal County,Arizona.Sources: Harold Kitching, “Two MajorHighway Projects in the Casa Grande ValleyTied to a Proposed One-Cent Increasein the State’s Sales Tax Could End UpBeing Toll Roads,” Casa Grande Dispatch,5 June 2008.State: ArizonaRoad: North-South CorridorConcessionaire: UndeterminedContract Type: Listed as a potential publicprivatepartnership by Arizona DOTProject Details: A group of businesspeopleand developers in Pinal County financeda feasiblity study for construction ofhighway(s) in the North-South Corridoras toll roads.Sources: “$900+ Million Tollroad BeingStudied in Pinal County Arizona,” TollRoads News, 9 March 2007.State: CaliforniaRoad: High Desert CorridorConcessionaire: UndeterminedContract Type: Undetermined - Theproject may be built as a develop/managecontract instead of a concessionProject Details: The Counties of SanBernadino and Los Angeles, and the Citiesof Adelanto, Victorville, Apple Valley,Lancaster and Palmdale have formed aJoint Powers Authority to develop a newexpressway from SR 14 to I-15. The roadmay eventually reach I-5 (County). Thelocal governments are working togetherto build the corridor under some form of apublic-private partnership (Stanton).Cost/Financing: (1) COSTS - Estimated at$2.6 billion (County)Status: The City of Victorville has receivedfederal funds to develop a portionof the corridor from US 395 to I-15 andon through SR 18. The preliminary engineeringand environmental studies areunderway. The Joint Powers Authorityhas released a Request for Proposals seekingservices from engineering consultantfirms to develop and manage the effort(County).Sources: (1) County of San BernadinoDepartment of Public Works, High DesertCorridor, Joint Powers Authority, 2007. (2)Barb Stanton, “Public-Private Partnershipsin California,” The Barb Stanton Show, 20January 2008.State: CaliforniaRoad: Valley View Avenue in FeltonConcessionaire: UndeterminedContract Type: ConcessionProject Details: The Public Works Departmentin Santa Cruz has over $100 millionin necessary street maintenance projects.The Department suggested privatizing theroads to avoid the initial outlay, howeverpublic outcry led officials to shelve theplan for both Little Basin and Valley ViewRoads (Alexander).Status: Plans for privatizing Valley ViewAvenue have been tabled for now (Alexander).Sources: Kurtis Alexander, “County Planto Privatize Roads gets No Traction,” SantaCruz Sentinel, 24 September 2008.12 Private Roads, Public Costs


State: CaliforniaRoad: Little Basin Road off Highway 236Concessionaire: UndeterminedContract Type: ConcessionProject Details: See Valley View Avenue.Status: See Valley View Avenue.Sources: See Valley View AvenueState: CaliforniaRoad: Foothill South Toll RoadConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The Foothill South TollRoad is a proposed road that would begin atOso Parkway in Rancho Santa Margarita,pass though San Onofre State Beach, andconnect with I-5 at Baseline Road.Cost/Financing: (1) COSTS - $875 millionStatus: The California Coastal Commissionrejected plans for the toll road inFebruary 2008 over numerous concerns,such as environmental damage, low traffic,the need to promote mass transit, and littleresearch into alternatives. The US CommerceDepartment upheld the CoastalCommission’s decision in December 2008.(Rosenblatt)Sources: Susannah Rosenblatt, “O.C. TollRoad Hits Dead End in D.C.,” Los AngelesTimes, 19 December 2008.State: CaliforniaRoad: I-710 TunnelConcessionaire: UndeterminedContract Type: Undetermined. In August2008, a bill that granted the MetropolitanAuthority the authority to privatize roadsdied in committee. There is no indicationwhether officials will continue to pursueprivatization (Abendschein).Project Details: The I-710 Tunnel is a proposedalternative to a contentious surfaceroad that would cut through downtownSouth Pasadena and demolish many historicalhomes. The tunnel would serve as themissing link in the I-710 freeway betweenAlhambra and Pasadena (Poole).Cost/Financing: (1) COSTS - A preliminarystudy calculated the costs at between$2.28 and $4.89 billion for the basic tunnel.It would cost an additional $1.3 billionto build an intermediate interchangeunderground with four ramps (Toll RoadsNews). (2) FINANCING - Initial plansfor the tunnel envisioned the use of someprivate financing. Thus far the MTA hasallocated $780 million to the project withrevenue from a half-cent sales tax measure(Abendschein).Status: A preliminary study in 2006 foundthat constructing the tunnel would be feasible,but it would cost $3 billion and take9 to 11 years to complete. In March 2007,MTA board officials approved a study todetermine whether it would be possible totunnel under the city of South Pasadena;there is no indication that the study hasbeen completed (Associated Press). InAugust 2008, a bill authorizing the MTAto enter into an agreement with a privatecompany to complete the tunnel died incommittee, and there is no indication ofwhether transportation officials will continueto try to get legislative approval for aprivatization agreement (Abendschein).Controversy: The Metropolitan TransportationAuthority allocated $780 million tothe project with revenue from a proposedhalf-cent sales tax measure. In response,two localities, South Pasadena and LaCanada Flintridge, filed lawsuits to stop thefunding because an environmental impactstudy had not been conducted and therewas no specified route. South Pasadenaofficials say they do not oppose the road,only allocating money when no route hasbeen identified. La Canada Flintridge officialsare concerned about traffic impactsfrom the extension. Both cities maintainthat the MTA violated the CaliforniaEnvironmental Quality Act by proposingfunding without an environmental review(Abendschein).Sources: (1) Dan Abendschein, “LawsuitsFiled to Stop Tunnel: Two Local CitiesAppendix C 13


Oppose Extension That Would Link 210,710 Freeways,” Pasadena Star-News, 9September 2008. (2) “Study of $3 BillionFreeway Tunnel Under South PasadenaOk’d,” The Associated Press, 22 March 2007.(3) Jean Guccione, “Ask the BottleneckBlog: 710 Freeway Tunnel,” Los AngelesTimes, 15 March 2007. (4) Robert Pooleand Peter Samuel, “The Return of PrivateToll Roads,” Public Roads, US DOT FederalHighway Administration, March/April2006. (5) “Toll Tunnel for I-710 in SouthPasadena CA Found Feasible,” Toll RoadsNews, 2 July 2006.State: CaliforniaRoad: Tunnel linking the Foothill/EasternToll Road in Orange County to I-15 inRiverside CountyConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The tunnel would linkthe Foothill/Eastern Toll Road in OrangeCounty to I-15 in Riverside County,providing an alternate route to the SR 91Riverside Freeway and the SR 74 OrtegaHighway. The tunnel would go throughthe mountains of Cleveland NationalForest (Poole). The tunnel is one of threealternate proposals. The other two arebuilding a freeway parallel to or above SR91 and widening SR 74 (Begley).Cost/Financing: (1) COSTS - $6 billion.(2) FINANCING - Private financing willprobably be involved. The federal governmenthas given a $15.8 million grant toexamine congestion relief methods in theregion, and it is currently being used tofund the drilling and testing of the tunnel.Status: Geologists are drilling into theSanta Ana Mountains to collect rocksamples. The results will be used to determinewhether tunneling into the mountainsis feasible (Los Angeles Times). Thetests should be completed by late 2009.If the results indicate that the rock is toounstable to handle drilling, or that waterlevels would complicate keeping the roaddry, then the project will be abandoned(Begley).Sources: (1) Doug Begley, “Driling UnderWay to Study Building Traffic Tunnel toOrange County,” The Press Enterprise, 23April 2008. (2) “The Big Dig Continues,”Los Angeles Times, 23 March 2007. (3) RobertPoole and Peter Samuel, “The Returnof Private Toll Roads,” Public Roads, USDOT Federal Highway Administration,March/April 2006.State: CaliforniaRoad: Adding truck lane capacity to I-710eastbound along SR 60Concessionaire: UndeterminedContract Type: UndeterminedProject Details: The proposal is to addtruck lane capacity to the corridor followingthe I-710 freeway from the ports ofLA and Long Beach to intermodal yards,then eastbound along the SR 60 PomonaFreeway (Poole).Cost/Financing: (1) COSTS - Undetermined.(2) FINANCING - Undetermined.Tolls will be placed on the truck lanes toprovide revenue.Status: There has been no recent mentionof the proposal.Sources: (1) Robert Poole and Peter Samuel,“The Return of Private Toll Roads,”Public Roads, US DOT Federal HighwayAdministration, March/April 2006State: ColoradoRoad: I-70 Express LanesConcessionaire: UndeterminedContract Type: Undetermined - tolling isone option under considerationProject Details: The Colorado Dept. ofTransportation is engaged in a corridorstudy of the I-70 corridor east of I-25 inDenver. The creation of express toll lanesis one option under consideration. Privatecapital funding is a possibility.14 Private Roads, Public Costs


Cost/Financing: COSTS - undeterminedStatus: A Draft Environmental ImpactStatement for the corridor is in a publiccomment period.Sources: U.S. Department of Transportationand Colorado Department of Transportation,I-70 East Draft EnvironmentalImpact Statement and Section 4(f) Evaluation,November 2008State: ColoradoRoad: Jefferson Parkway Toll Road fromC-128 to C-93 near GoldenConcessionaire: Jefferson Parkway PublicHighway Authority (JPPHA) will soonbegin talking to private groups interestedin a long-term concession lease (Toll RoadsNews).Contract Type: Concession - design, build,operate, maintainProject Details: JPPHA plans to build atoll road from Colorado 128 near JeffersonCounty’s Airport to Colorado 93 (TollRoads News)Cost/Financing: (1) COSTS - Total costsfor the corridor are estimated at $1.176billion, though some of this is out of theJPPHA’s jurisdiction. The Jefferson Parkwayportion is exepcted to cost $835 million(Toll Roads News). (2) FINANCING- CDOT has spent $15 million developingthe project (Toll Roads News)Status: The JPPHA will soon issue a Requestfor Expressions of Interest for a tollconcession, followed by a formal Requestfor Proposals. The permitting processis complete except for getting air qualityconformity and acceptance from theDenver Regional MPO. They hoped tosubmit this application by February 2009(Toll Roads News).Controversy: (1) People are worried thatthis concession may contain a non-competeclause similar to the one in the NorthwestParkway agreement. (2) There is significantopposition from Golden residents, wherethe road is intended to go (Leib).Sources: (1) Colorado Department ofTransportation, CDOT Ends NorthwestCorridor Environmental Study Prior toCompletion (press release), 17 October2008. (2) Jeffrey Leib, “Toll Firm Objectsto Work on W. 160th,” Denver Post, 23 July2008. (3) “Concessionaire Sought Soon for13 Mile Pike Northwest of Denver - MissingLink in Beltway,” Toll Roads News, 11December 2008.State: ColoradoRoad: US 36Concessionaire: UndeterminedContract Type: Undetermined - the roadwill be tolled, but it is unclear whether itwill be privatizedProject Details: The project would be toexpand US-36 between I-25 and Boulderwith the addition of high occupancy vehiclelanes for the length of the corridor (Leib).The project may eventually include a busrapid transit service (States).Cost/Financing: (1) COSTS - undetermined.(2) FINANCING - The projectwill be built with some private financing.Status: The acting director of the ColoradoTolling Enterprise told legislators that theagency expects to solicit interest in a possibleprivatization agreement that wouldhelp fund and construct the road (Leib).The project has stalled, though. In 2007that state attempted to get a grant fromUS DOT for the road, but it was rejected.The Governor has begun lobbying again toreceive some of the money New York lostwhen it turned down a proposal to toll driversentering parts of Manhattan (Flynn).Sources: (1) Kevin Flynn, “US 36 ExpansionMay Get Second Shot,” Daily Camera,8 April 2008. (2) Jeffrey Leib, “Toll FirmObjects to Work on W 160th,” DenverPost, 23 July 2008. (3) “Members of CODelegation Urge Dept. of Transportationto Award Funding to Colorado for Improvementson US 36,” States News Service,9 April 2008.Appendix C 15


State: ColoradoRoad: Prairie Falcon ExpressConcessionaire: Front Range Toll Road,Ltd., LLP has acquired all assets and therights of and interest in the Front RangeToll Road Company, which is conductingbusiness under the name Prairie FalconParkway Express Company, PTR. RayWells is the face of the campaign.Contract Type: Develop, design, construct,finance, maintain and operateProject Details: The road wouuld begin 13-16 miles north of Fort Collins and end 7-10miles south of Pueblo (Forstenzer).Cost/Financing: (1) COSTS - Costs areestimated at $2-3 billion. (2) FINANC-ING - private financing will be used. (3)TOLLS - Tolls would likely be 5 to 6 centsper mile, or $10-12 to go the length of theroadway. The concessionaire would makeadditional money by granting concessionsin plaza areas and real estate developmentat interchanges (Forstenzer).Status: The formal process of getting approvalsunder state law began in August2006. Before the construction can begin,Colorado law requires that public reviewsmust take place and an environmentalanalsysis must be conducted, a processwhich could take years. After completionof the design and environmental studies,the project will be reviewed by regulatoryagencies. Upon approval, land acquisitionand construction will begin. The actualconstruction is expected to take 2.5 to 3years. Public outcry appears to have temporarilyhalted the project. (Sealover)Controversy: (1) In August 2006, Wellshired a Halliburton subsidiary called Kellogg,Brown & Root to work on the newproposal. Some property owners believethe company was hired to intimidateproperty owners because of the company’spolitical influence (Forstenzer). (2) Legislationin 2006 notified county clerks of theproposed roadway, which was then attachedto the housing deeds of homeowners in theproposed path. As a result, housing titlesnow carry the warning and property valueshave dropped 25 percent. The legislatureconsidered legislation to clear the propertytitles of this disclaimer (Sealover).Sources: (1) Martin Forstenzer, “DeveloperWants Toll Road, Colorado Makes it Difficult,”New York Times, 22 September 2006.(2) Ed Sealover, “Property Owners in Pathof Super Slab Likely to Get Titles Cleared,”The Gazette, 24 March 2008.State: DelawareRoad: Route 1, I-95, and a section of US301Concessionaire: UndeterminedContract Type: UndeterminedProject Details: In June 2004, the Governorestablished a Transportation DevelopmentFunding and Options Task Force to determineways to improve and increase capacityon roadways. In creation of the taskforce, the Governor specifically mentionedprivatization of US 301, Route 1, and I-95.However, the report barely mentioned thecreation of P3s, and two officials indicatedthat such agreements were off the table(Toll Roads News).Cost/Financing: (1) FEE - A concession ofI-95 could garner a $1.9 billion lump-sumpayment (Ackerman)Status: It appears that privatization hasbeen tabled in Delaware (Smith).Sources: (1) Andrew Ackerman, “Delaware’sGov. Minner Mum on Highway PrivatizationProposal,” The Bond Buyer, 23 January2006. (2) Nicole Smith, “Shortfall Strategy:Debt Boost, Fee Hikes,” The Bond Buyer, 28March 2007. (3) “Delaware Task Force ShiesAway From Investigating Privatization,” TollRoads News, 1 December 2005.State: FloridaRoad: Alligator AlleyConcessionaire: 6 Teams have submittedstatements of qualifications: A2 TransportationPartners, Everglades Parkway16 Private Roads, Public Costs


Partners, Atlantia SPA, Vinci Concessionsand Hubbard Construction Co., AlligatorAlley Development Partners, GVI-Lehman Alligator Alley Access Partners(Samuel).Contract Type: Lease, maintain, operateProject Details: Alligator Alley is a 78-milesection of I-75 in south Florida that connectsthe Atlantic and Gulf coasts, goingfrom near Fort Lauderdale to Naples (TollRoads News - Brisa Group).Cost/Financing: (1) FEE - FDOT estimatesit can receive an upfront fee of between$504 million to $1.332 billion for a 50 to 75year concession (Toll Roads News - MoreDetail). (2) TOLLS - With a concession feeof $1.3 billion, tolls would be appoximately$4 for cars, rising to $8 in year five, and$10 in year ten (Toll Roads News - MoreDetail). (3) PROCEEDS - the state will usethe concession payment for transportationprojects (Williams - Collier)Status: Many groups have been trying tostall the concession agreement, and thereis intense opposition from politicians andcitizens. Recently, FDOT postponed thedeadline for bids. This occured becauseproposers have said they need more timebecause of the financial crisis. The lack ofcredit is creating a burden for the proposingfirms (Williams - FDOT Postpones).Controversy: (1) The draft agreement containsa compensation clause requiring thestate to compensate the private operatorif transportation policies or other publicactions reduce the value of the toll road(Williams - Alley Draft). (2) A study byKPMG accounting firm found that thestate could raise $600 million to $1.6 billionthrough bonds (Mayo).Sources: (1) Michael Mayo, “Time toThrow the Brakes on Alligator AlleyLease Plan,” South Florida Sun-Sentinel,17 August 2008. (2) Chelsea J. Samuel,“Alligator Alley Lease Bids Get OK fromReview Panel,” The News-Press, 26 August2008. (3) “Brisa Group Scores Highest inQualifications for Concession of AlligatorAlley TR Florida,” Toll Roads News, 26 September2008. (4) “More Detail on ThreeFlorida Lease-Concession Prospects,”Toll Roads News, 3 October 2007. (5) LeslieWilliams, “Alley Draft Agreement Out ButTolls, Other Details Forthcoming,” NaplesDaily News, 26 August 2008. (6) Leslie Williams,“Collier Considers Suing State OverPossible Alley Lease,” Naples Daily News,23 September 2008. (7) Leslie Williams,“FDOT Postpones Deadline to Bid onAlligator Alley Lease,” Naples Daily News,24 December 2008.State: FloridaRoad: North Tampa’s East-West RoadProjectConcessionaire: Plenary was chosen as thepreferred partner in February 2007 (PublicWorks Financing).Contract Type: UndeterminedProject Details: The proposal is to builda 3-mile road in Tampa (Public WorksFinancing)Cost/Financing: (1) COSTS - $150 millionto construct the road. (2) FINANCING- private financing will be used to pay forconstruction in exchange for a 60 yearconcession term. (3) TOLLS - Plenary proposedan initial toll level of $1.50, rising to$2.75 in five years, and rising thereafter byeither 4% or the CPI, whichever is greater(Public Works Financing).Status: In June 2008, Tampa HillsboroExpressway Authority and the city ofTampa ended the PPP procurement andterminated negotiations. The proposedtolls were considered too high and theconcession term of 60 years was consideredtoo long. This decision was made when thefederal government requested a new trafficstudy. Plenary offered to pay $500,000 forthe study, but also sought changes to feederroads and an extension of the lease to 60years, from the initial 40-year term (PublicWorks Financing).Sources: (1) “Developer Plenary PuntsAppendix C 17


on Tampa Road,” Public Works Financing,June 2008State: FloridaRoad: Poinciana ParkwayConcessionaire: Avatar Holdings, a Floridareal estate developerContract Type: design, build, finance, operateand maintainProject Details: A 9.7-mile road, of which4.1 miles would be toll. The road will linkPoinciana, a master-planned communitybuilt by Avatar, to the Orlando-area transportationnetwork.Cost/Financing: COSTS - Approximately$200,000.Status: Avatar has the necessary state andfederal permits to begin construction. Itsagreements with Osceola and Polk countiesstate that construction is to begin by 2011and end by the end of 2011.Sources: Avatar Holdings, Inc., Form 10-Q Quarterly Report for the Period EndingSeptember 30, 2008.State: FloridaRoad: I-595 Reversible Express LanesConcessionaire: The contract was awardedto ACS Infrastructure DevelopmentContract Type: design, build, finance,operate and maintain. The private entitywill finance the construction, then it willreceive an upfront fee from the state andannual payments over 35 yearsProject Details: The proposal is to buildreversible express lanes in the I-595 medianbetween SR 7 and I-75, constructadditional lanes between exits and movesome entrance/exit ramps to relieve mergingproblems, and build the missing linkof SR 84 between Davis Road and SR 7(Turnbell). ACS Infrastructures will receive30 annual payments of $63.98 millionregardless of the tolls collected after theroad opens (Lebowitz)Cost/Financing: (1) COSTS - $1.5 billion.(2) FINANCING - the project will use privatefinancing. (3) TOLLS - variable tollswill be charged on the express lanes basedon congestion. The state will collect thetolls and set the rates, using the proceeds topay the contractor a lump sum and annualpayments over 35 years. (Turnbell).Status: Construction is supposed to beginin 2009 and be completed by 2014 (Turnbell).Sources: (1) Michael Turnbell, “FourTeams Win Right to Bid on Major I-595Project,” South Florida Sun-Sentinel, 4 December2007. (2) Larry Lebowitz, “SpanishConglomerate Will Run I-595 Toll Road,”Miami Herald, 25 October 2008State: FloridaRoad: I-75Concessionaire: ACCI/API - a joint ventureof Anderson Colombia Co. Inc. and AjaxContract Type: design-buildProject Details: The project entails wideningthe highway from two to three lanes(Udelhofen).Cost/Financing: (1) COSTS - the consortiumhas a $430 million contract. (2) FI-NANCING - the joint venture will financethe construction, and it will be repaid byFDOT over the next five years with somerepayments stretching out two years afterthe project is complete (Udelhofen).Sources: Greg Udelhofen, “Florida’sLargest Road Project Underway,” AsphaltContractor, 1 March 2008.State: FloridaRoad: BeachLine Expressway (SR 528)Concessionaire: UndeterminedContract Type: concessionProject Details: BeachLine East is theFDOT portion of a longer toll road calledthe BeachLine, designated FL 528, whichhas segments owned by the Orlando tollauthority and Florida Turnpike Enterprise.The state owns the stretch of road from SR520 near the Orange and Brevard County18 Private Roads, Public Costs


lines to the Bennett Causeway at US Highway1 (Toll Roads News).Cost/Financing: (1) FEE - Under a full markettoll rate, the concession could generatea fee of $321 million. At half market tollrates, the road would generate $140 million(Toll Roads News).Status: The state government is first focusingon Alligator Alley before consideringproposals for other roads.Sources: (1) Aaron Deslatte, “BeachLineJoines Rent-a-Road Mix,” Orlando Sentinel,22 September 2007. (2) “More Detail onThree Florida Lease-Concession Prospects,”Toll Roads News, 3 October 2007.State: FloridaRoad: First Coast Outer BeltwayContract Type: Design, build, finance,operate and maintainProject Details: The First Coast OuterBeltway is a consolidation of two earlierprojects, Brana Field Chaffee Road and St.Johns River Crossing. The 4-lane road willstart southward from I-10 in Duval Countywest of Jacksonville, go east across the St.Johns River, and meet up with I-95 southof Jacksonville (Toll Roads News)Cost/Financing: (1) COSTS - Constructionwill cost $2.2 billion. (2) TOLLS - arevenue maximizing toll would be 20 centsper mile in 2000, and 27 cents per mile in2015 (Toll Roads News)Status: A Request for Qualifications hasbeen postponed pending the resolution ofa number of issues. FDOT needs to first resolveissues associated with potential propertytaxes on the project and postponementwill allow the completion of environmentalstudies. The state is currently looking forfinancial advisers to assist in writing contracts(FDOT)Controversy: There is some debate overwhether the proposed roadway is toodistant from Jacksonville to generate thetraffic necessary to make it a viable tollproject (Toll Roads News).Sources: (1) Florida Department of Transportation,First Coast Outer Beltway Update(press release), 29 April 2008. (2) “JacksonvilleFlorida Outer Beltway $2 Billion+ Toll Concession on the Go,” Toll RoadsNews, 18 December 2007.State: FloridaRoad: State Road 9BContract Type: Design, build, finance,operate and maintainProject Details: SR 9B is a planned freewaysouth of Jacksonville. It will go from SR 9A,connect to SR 9 (I-95), and then go south,possibly extending west as a bridge over StJohns River where it will connect with SR23 (NationMaster).Cost/Financing: Duval County has retractedRequests for Qualifications onthe SR 9B project. Currently, FDOTis evaluating a series of projects underconsideration across the state, and thereis a Special Session on the state budgetdeficit, so county officials decided to retractthe RFQ and await further updates(FDOT).Sources: (1) Florida Department of Transportation,“State Road 9B For Qualifications- Retraction.” (2) “State Road 9B,”NationMaster, downloaded from www.nationmaster.com/encyclopedia/State-Road-9B-(Florida), 30 January 2009.State: FloridaRoad: Pinellas BaywayConcessionaire: ConcessionContract Type: UndeterminedProject Details: The Governor has mentionedprivatizing the Bayway, though it isnot a top priority because the bridges arein poor condition (Brassfield).Cost/Financing: UndeterminedStatus: The Bayway is not considered atop priority for privatization, no concreteaction has been taken (Brassfield).Sources: (1) Mike Brassfield, “WouldAppendix C 19


Bridge Leases Pay Off For Florida?” St.Petersburg Times, 25 November 2007State: FloridaRoad: Sunshine SkywayConcessionaire: UndeterminedContract Type: ConcessionProject Details: Sunshine Skyway, designatedI-275, spans the mouth of TampaBay and is considered the most direct routefor west Tampa area people to get to St.Petersburg.Cost/Financing: (1) FEES - Lease of theSkyway could generate a $477 millionto $1.315 billion concession payment. (2)TOLLS - Tolls are currently 75 cents. Ata full market toll rate, tolls would be $1.50in 2008, rising to $3 in 2012, and $5 in 2017(Toll Roads News)Status: No action has been taken - SunshineSkyway is in need of a lot of maintenancework, which would reduce theconcession fee (Brassfield).Sources: (1) Mike Brassfield, “WouldBridge Leases Pay Off for Florida,” St. PetersburgTimes, 25 November 2007. (2) LarryLebowitz, “Spanish Conglomerate WillRun I-595 Toll Road,” Miami Herald, 25October 2008. (3) “More Detail on ThreeFlorida Lease-Concession Prospects,” TollRoads News, 3 October 2007.State: FloridaRoad: Wekiva ParkwayConcessionaire: Undetermined - Projectis being planned by the Orlando-OrangeCounty Expressway AuthorityContract Type: UndeterminedProject Details: The Wekiva Parkwaywould be a 27-mile parkway, completingthe beltway around Orlando.Cost/Financing: COSTS - The estimatedcost of the project in 2004 was $970 million.(FDOT) FINANCING - Publicprivatepartnership is being considered forfinancing. (Wekiva) The road could also befinanced and built by existing public tollagencies. (FDOT)Status: A final alignment for the parkwayis scheduled to be determined in spring2009.Sources: (1) Florida Department of Transportation,Wekiva Parkway Funding Plan,27 October 2004; (2) Wekiva River BasinCommission, Wekiva River Basin CommissionMeeting Minutes, 11 July 2008; (3)Orlando-Orange County Expressway Authority,Wekiva Parkway Project Developmentand Environment Study, downloaded fromwww.expresswayauthority.com/Corporate/oursystem/SR429/WekivaParkway.aspx,28 January 2009State: GeorgiaRoad: Various ProposalsConcessionaire: UndeterminedContract Type: UndeterminedProject Details: Georgia is facing budgetshortfalls and transportation problems.Governor Perdue has already gone toTexas and Spain, leading many to thinkhe plans to privatize some roadways. In2003, the Georgia General Assemblypassed legislation allowing it to enter intoP3 agreements, which prompted financiersto propose adding toll lanes along I-75and I-575, though none of the plans havebeen acted upon. In 2004, the state fieldedproposals from three firms to convert GA316 between Lawrenceville and Athensinto a toll road that would charge drivers12 cents per mile, but public oppositionblocked the plan. DOT CommissionerGena Evans shelved the privatizationproposals when she took office saying thecontracts required a trained eye and carefuldeliberation (Wheatley).Status: DOT Commissioner Gena Evansshelved many proposals when she came tooffice. Governor Perdue however appearsto be considering P3s as a way to dealwith transportation and budget problems(Wheatley). He recently went to Spain and20 Private Roads, Public Costs


met with a private toll operator, and hehas indicated that he plans to unveil a newtransportation proposal.Sources: (1) Thomas Wheatley, “WillPerdue Privatize Georgia Highways?”Creative Loafing, 24 September 2008, (2)Dick Yarbrough, “DOT Provides All theComedy We Can Handle,” Gwinnett DailyPost, 21 January 2009.State: GeorgiaRoad: GA 400Concessionaire: The private entity isCrossroads 400, a consortium of contractingand engineering firms: APAC-Southeast;Granite Construction Company;Washington Group International; AR-CADIS; Post, Buckley, Schuh & Jernigan;URS Corporation; Washington GroupInternational (Crossroads 400 Group)Contract Type: Undetermined - Crossroads400 proposed a design-build arrangement,but has also mentioned an interest in operatingand maintaining the completed tollfacility. The consortium did not initiallypropose private financing. (USDOT)Project Details: In 2004, a consortium ofengineering and road-building companiesunder the name Crossroads 400 submitteda proposal to build HOT lanes on GA400. The lanes would be built along GA400 from I-85 at Brookwood or I-285 inSandy Springs north to GA 20 in Cumming(Hart).Cost/Financing: (1) COSTS - $1.6 billion(Hart). (2) FINANCING - the initial proposaldid not include private equity financing(USDOT). (3) TOLLS - there wouldbe variable toll rates based on congestionStatus: A state committee decided to tablethe proposal on the basis that it was notrevenue neutral. The proposal had beenrewritten and supporters say it is now revenueneutral. Recently, the Governor wentto Spain and met with a private toll roadcompany, and has indicated that he plansto release a new transportation plan. It ispossible that GA 400 will be revived in thisnew plan (Yarbrough).Sources: (1) Crossroads 400 Group, AGroup With Unparalled Expertise - and Experience,downloaded from crossroads400.com/about.shtml. (2) Ariel Hart, “StateKills GA 400 Toll Lane Proposal,” AtlanticJournal Constitution, 21 October 2008. (3)US Department of Transportation, InnovationWave: An Update on the BurgeoningPrivate Sector Role in US Highway andTransit Infrastructure, National Council onPublic Private Partnerships, 18 July 2008.(4) Dick Yarbrough, “DOT Provides Allthe Comedy We Can Handle,” GwinnettDaily Post, 21 January 2009State: GeorgiaRoad: I-285 Truck Toll LanesConcessionaire: Goldman Sachs submittedthe initial proposal (though has since withdrawnthe bid), and four others have beensubmitted since (USDOT). The otherteams are led by: Skaska USA Civil Inc.,Babcock & Brown LP, Cintra Concesionesde Infraestructuras de Transporte SA, andHorizon Mobility Group (a consortiumthat includes former GDOT commissionerTom Moreland) (Mahoney)Contract Type: UndeterminedProject Details: I-285 is a beltway aroundAtlanta. The proposal is to develop truckonlytoll lanes on I-285 from the I-75 interchangein Cobb County south to I-20,and from the I-20/I-285 interchange toThornton Road (Mahoney). The lanes areintended to complement the TOT lanesthat may be constructed as part of theNorthwest Corridor Project (USDOT).Cost/Financing: (1) COSTS - GoldmanSachs’ proposal estimated constructioncosts at $400 to $500 million (Toll RoadsNews). (2) FINANCING - the projectcould be built with public bonds, thoughit will most likely be privately financed(Hart - Debate). (3) TOLLS - there hasbeen some discussion of making the tolledAppendix C 21


TOT lanes mandatory for truck traffic, butthere has been significant opposition fromtrucking groups (Hart - Debate).Status: GDOT is currently studying theproposals.Controversy: A 2008 study by GDOT foundthat truck lane projects, such as I-285, maynot reduce traffic congestion enough tobe worth building. The study found thatadding truck lanes would speed up regulartraffic on adjacent interstates by only 10miles per hour in the next three decades.Given that a full truck-lane network wouldcost $13 billion, the study recommends thatthe state not pursue TOT lanes. After therelease of the study, DOT CommissionerGena Evans said all the proposals werestill on the table, but she would take thefindings into account when evaluating theprojects (Hart - Truck).Sources: (1) Ariel Hart, “Truck LanesMight Not Be Worth the Cost,” AtlantaJournal-Constitution, February 26, 2008.(2) U.S. Department of Transportation,Innovation Wave: An Update on the BurgeoningPrivate Sector Role in US Highway andTransit Infrastructure, National Councilon Public Private Partnerships, July 18,2008, (3) Ariel Hart, “Debate Gears UpOver Truck Lanes,” Cox News Service, May26, 2007, (4) Ryan Mahone, “Sachs GetCompetition for I-285 Toll Lane Project,”Atlanta Business Chronicle, July 28, 2006, (5)“Goldman Sachs Making Pitch for AtlantaToll Truckway on I-285,” Toll Roads News,May 11, 2006.State: GeorgiaRoad: I-20 Managed LanesConcessionaire: UndeterminedContract Type: design, build, finance, operateand maintainProject Details: The I-20 Managed LanesCorridor project would add two managedlanes along the I-20 corridor from east ofI-285 to Turner Hill Road (USDOT).Cost/Financing: (1) COSTS - undetermined.(2) FINANCING - private financingwould be used. (3) TOLLS - revenue wouldcome from variable toll rates. Toll rates areexpected to be a minimum of 20 cents permile in 2010, and would rise to $1.01 permile by 2050. Forecasts predict toll revenuesof $2-3 million in the first year, and $23million in 2030 (Toll Roads News)Status: GDOT issued a Notice of Intent toSolicit in July 2007. The next step would beto issue a request for proposals, but the datefor this has not been solidified (GDOT).When the DOT Commissioner, GenaEvans, came to office she decided to shelveprivatization proposals, so it is likely thatthis project is now on hold.Sources: (1) Georgia Department ofTransportation, Active PPI Proposals: I-20Managed Lanes Corridor, downloaded fromwww.dot.state.ga.us/informationcenter/programs/ppi/ProjectsandProposals/Pages/I-20ManagedLanesCorridor.aspx.(2) US Department of Transportation,Innovation Wave: An Update on the BurgeoningPrivate Sector Role in US Highway andTransit Infrastructure, National Council onPublic Private Partnerships, 18 July 2008.(3) “Georgia DOT Seeking Investors forToll Lanes on I-20 Southeast of Atlanta,”Toll Roads News, 7 August 2007.State: Illinios Tollway SystemRoad: Illinois Tollway SystemConcessionaire: UndeterminedContract Type: LeaseProject Details: The 274 miles of roadwaysis being considered for privatization (Bary).The Governor has so far rejected the ideaof leasing the tollway system (Shields).Cost/Financing: (1) FEE - Based on theconcession fee in the Indiana deal, theroad could generate a $20 billion up-frontpayment (Bary). A report commissionedby the bipartisan Illinois Commission onGovernment Forecasting and Accountabilityplaced the value of the road at $1-24billion, depending on the structure of the22 Private Roads, Public Costs


deal. Factors that will determine the valueof the road are: length of the concessionagreement, traffic projections, intial tollincreases, the cost of capital, and operatingefficiencies (Shields).Status: No visible action has occurredsince 2007.Sources: (1) Andrew Bary, “Paying Up,”Barrons, 8 May 2006. (2) Yvette Shields,“More Plans Afoot in the Land Where P3sBegan,” The Bond Buyer, 28 March 2007Evansville Courier & Press, 17 March 2007.(2) Carol Henrichs, “Big Illinois Pushfor Illiana Expressway, Decision NowRemains in Indiana Hands,” CHBlog,25 April 2007. (3) Yvette Shields, “AmidCriticism, Indiana Governor Scraps Plansto Privately Finance Toll Road,” The BondBuyer, 27 March 2007. (4) Vicki Urbanik,“Illiana Tollroad: Stop the Spin, Let’s HaveHonest Public Debate,” Chesterton Tribune,9 March 2007.State: Indiana/IllinoisRoad: Illiana ExpresswayConcessionaire: UndeterminedContract Type: build-leaseProject Details: The Illiana Expresswaywould connect I-57 in Illinois to I-94 inIndiana. (Shields)Cost/Financing: (1) COSTS - undetermined.(2) FINANCING - GovernorDaniels has proposed using private financing(Shields).Status: Due to public opposition, GovernorDaniels withdrew his initial proposal forthe Expressway in March 2007 and askedlawmakers to consider a proposal for ashorter version of the road (Shields). Thestate is currently conducting a two yearstudy of the project (Henrichs).Controversy: (1) There is concern over landseizures and farmland destruction (CourierPress). (2) Proponents of the road maintainthat it will relieve congestion on the BormanExpressway, but no studies or trafficprojections have been done. Some believethe real impetus of the Expressway is to addhighway capacity for new developments,such as LaPorte County’s proposed Intermodaltransportation facility, the proposedLake County Convention Center, andthe Peotone Airport (Urbanik). (3) Questionsremain about how the extra trafficwill affect Lake and Porter countiesand their ability to reduce air pollution(Urbanik).Sources: (1) “Tollway Draws Little Support,”State: MarylandRoad: Capital BeltwayConcessionaire: UndeterminedContract Type: Design, build, finance,operate and maintainProject Details: The project is to constructExpress Toll Lanes (ETLs) on the CapitalBeltway from the American Legion Bridgeto the Woodrow Wilson Bridge (Smith).Cost/Financing: (1) COSTS - UndeterminedStatus: There has been intense public oppositionto the project, and state governmentofficials have indicated they do notwant to challenge local governments on theissue (Brown). However, the project doesremain on the table (Dresser).Controversy: (1) Cultural sites will beaffected by an expansion of the Beltway.There are a number of known and potentialhistorical or archeological sites in the area.If the project were to proceed, an archeologicalinvestigation would be requiredwhereever it is likely that ground will bedisturbed (Brown). (2) Natural resourcesmay be threatened by the project, suchas flood plains and associated wetlandslike the Potomac River, Rock Creek, andsmall tributaries. There are also 44 typesof rare, threatened, or endangered speciesof plants and animals in the vicinity of theproposed project (Brown). (3) Citizens inthe two affected counties are opposed tothe project because it will lead to increasednoise, pollution and traffic congestion,Appendix C 23


disrupt nearby businesses, and pose dangersto schools and hospitals in the vicinity(Brown).Sources: (1) Matthew T. Brown, et al., TheCapital Beltway and Public Private Partnerships,The National Council for PublicPrivate Partnerships, December 2007. (2)Michael Dresser, “Driven Away?” BaltimoreSun, 7 September 2008. (3) Nicole M.Smith, “Seeking a ‘More Mobile Maryland,’”The Bond Buyer, 23 October 2006.State: MarylandRoad: Baltimore-Washington ParkwayConcessionaire: The toll road would be operatedeither by the Maryland Toll Authorityor a private company if the state choosesto pursue a privatization agreement.Contract Type: leaseProject Details: At the request of the FederalHighway Administration, Marylandofficials are studying the impact of placingtolls on the existing lanes of five capitalregionparkways, including the Baltimore-Washington Parkway. Such a proposal islikely to be unpopular (Dresser).Cost/Financing: (1) TOLLS - Preliminarystudies show that people would be willingto pay $10-$15 for congestion-freetravel along the length of the parkway(Dresser).Status: Maryland officials maintain theydo not intend to toll existing roadways(Dresser).Sources: (1) Michael Dresser, “DrivenAway?” The Baltimore Sun, 7 September2008State: MarylandRoad: Express toll lanes on the BaltimoreBeltwayConcessionaire: UndeterminedContract Type: If built as a private road, itwould be a design, build, finance, operateand maintain contractProject Details: The state is consideringconstructing express toll lanes on theBeltway. Former Governor Ehrlich saidthat the state is interested in private fundsto finance transportation megaprojects,and requested private companies to submitideas on a variety of projects. Express tolllanes on the Beltway may be one of theprojects to be privatized (Truck Flix).Cost/Financing: The Baltimore Beltway isslated for a $1 billion expansion, though theproject is being studied (Smith).Status: State Highway Administrator NeilJ. Pedersen said a study of tolls on the Beltwaynever got off the ground (Dresser).Sources: (1) Michael Dresser, “DrivenAway?” The Baltimore Sun, 7 September2008. (2) Nicole M. Smith, “Seeking a‘More Mobile Maryland,’ State Eyes Public-PrivatePartnerships,” The Bond Buyer,23 October 2006. (3) “Maryland MullsPublic-Private Partnerships for Roads,”Truck Flix, 15 October 2006State: MarylandRoad: I-270 CorridorConcessionaire: UndeterminedContract Type: If built as a private road, itwould be a design, build, finance, operateand maintain contract.Project Details: The I-270 project wouldconnect the Shady Grove Metro station inMontgomery County to an existing privateproject in Virginia (Smith). Former GovernorEhrlich said that the state is interestedin privatization to finance transportationprojects, and may pursue such a deal forthe Corridor (Truck Flix).Cost/Financing: UndeterminedStatus: Toll financing on I-270 betweenMontgomery and Federick remains a possibility,but the project is not a certainty(Dresser).Sources: (1) Michael Dresser, “DrivenAway?” The Baltimore Sun, 7 September2008. (2) Nicole M. Smith, “Seeking a‘More Mobile Maryland,’ State EyesPublic-Private Partnerships,” The Bond24 Private Roads, Public Costs


Buyer, 23 October 2006. (3) “MarylandMulls Public-Private Partnerships forRoads,” Truck Flix, 15 October 2006State: MassachusettsRoad: Mass TurnpikeConcessionaire: LeaseContract Type: LeaseProject Details: The Patrick Administrationpaid UBS as a consultant to exploretransportation funding options includingprivatizing the Mass Turnpike. Aides at theGovernor’s office say the issue is not goinganywhere, but they are using tax dollars tostudy the proposal. Governor Patrick hasalso directed the secretary of transportationto prepare legislation to dismantle theTurnpike Authority, merge the remainingtransportation agencies, and restructurethe Big Dig debt. This could be a first steptowards privatization.Cost/Financing: UndeterminedStatus: The proposal is being studied.Sources: (1) “Governor Orders Legislationto Dismantle the Massachusetts TurnpikeAuthority,” Toll Roads News, 2 October2008.State: MichiganRoad: No road has been identifiedConcessionaire: UndeterminedContract Type: UndeterminedProject Details: Some individuals havesuggested tolling roads in Michigan topay for transportation costs, however itappears that no legislative action has beentaken (The Bay City Times). Currently,legislators seem to be focusing on generatingrevenue through various tax proposals(Land Line). MDOT’s website says that tollroads are not economically feasible in thestate because it is off the nation’s heavilyused east/west corridors (MDOT).Cost/Financing: UndeterminedStatus: The idea is being considered.Sources: (1)”Toll Roads Could Help PayMichigan’s Hefty Highway Bill,” The BayCity Times, 27 July 2008. (2) “MichiganPursues Road Funding Solutions Via TaxProposals,” Land Line Magazine, 15 August2008. (3) Michigan Department ofTransportation, Frequently Asked Questions:Roads, downloaded from www.michigan.gov/mdot/0,1607,7-151-14013-28071--F,00.html.State: MississippiRoad: Jackson Airport ParkwayConcessionaire: MDOT has shortlistedthree teams that will proceed to the Requestfor Proposals stage: Jackson AccessMobility Group (ACS and Dragados),Airport Parkway P3 Group (Cintra andFerrovial), and Global Via (MDOT PressRelease).Contract Type: finance, design, build, operateand maintainProject Details: The Parkway would be ahigh-speed toll lane between downtownJackson and the airport with a bridge overthe Pearl River (Public Works Financing).Cost/Financing: (1) COSTS - constructioncosts are estimated at $320-$400 million(Toll Roads News). (2) FINANCING -private financing will be used. In exchange,the investors will manage the roadway for50 years (Public Works Financing).Status: MDOT has shortlisted three teamsthat will proceed to the RFP stage of theselection process. Selection of the winningteam is expected in March 2009 (MDOTPress Release). The road is expected toopen by the end of 2012 (MDOT - AirportParkway).Sources: (1) Mississippi Deparment ofTransportation, Airport Parkway Project,downloaded from www.theairportparkway.com/Home.aspx.(2) MississippiDepartment of Transportation, MDOTAnnounces Shortlisted Teams for the AirportParkway Project (press release), 20 August2008. (3) “Jackson, Miss. Airport ConnectorSOQ,” Public Works Financing, June 2008.Appendix C 25


(4) “Jackson Mississippi Airport Parkway- Call for Toll Concession Developer,” TollRoads News, 1 June 2008State: MissouriRoad: No specific proposal - truck tolllanes on I-44, I-70 and US 71 have beenmentionedConcessionaire: UndeterminedContract Type: UndeterminedProject Details: Currently state toll roadsare unconstitutional in Missouri, but othermethods of tolling are not, such as privatelyoperated but publicly owned toll roads,high occupancy toll lanes, truck only tollroads, and competitively contracted masstransit services (Stokes). The Show-MeInstitute, a think tank in Missouri, is touringthe state to promote the use of tolls.One of their proposals includes truck tolllanes on I-44 (ky3) They propose buildingtruck lanes as four-lane routes parallel toI-44 and I-70, and perhaps US 71 (JoplinGlobe).Cost/Financing: UndeterminedStatus: Currently it seems that the MDOThas only examined the feasibility of tollroads; promotion for P3s is mainly comingfrom outside sources. It does not appearthat any direct action has been taken.Sources: (1) “Truck-Lane Toll RoadsWorth Study,” The Joplin Globe, 12 March2008. (2) “For Whom the Road Tolls,” ky3Political Notebook, 29 February 2008. (3)David Stokes, et al, “Missouri’s ChangingTransportation Program,” Show-MeInstitute, 27 February 2008.State: NevadaRoad: Boulder City BypassConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The bypass has been proposedas an exception to the current banon toll roads. The road would start nearRailroad Pass on US-93 and would continuesouth around Boulder City Municipal Airportbefore connecting to US-93 west ofHoover Dam (Vogel).Cost/Financing: (1) COSTS - $500 million(Vogel).Status: The Bypass will need approval bythe 2009 Legislature. Some worry thatprivate investors will not be interested init. If the state approves the Bypass, it wouldneed one to two years to conduct additionalstudies and solicit bids. The road will notbe completed until 2012-2014 (Vogel).Controversy: (1) There are doubts aboutwhether investors will be interested dueto potentially low toll revenue. Proponentsargue the private investors will becomeinterested when toll roads are legalized. (2)Many legislators and Governor Gibbonsare on record opposing toll roads unlessmotorists have a free alternative to eachdestination. US 93 is supposed to serve thatpurpose (Vogel).Sources: (1) Ed Vogel, “Boulder City Bypass:Bridging Funding Gap,” Las VegasReview-Journal, 3 September 2008State: NevadaRoad: US Highway 95 to I-15; I-15 south toI-215; Summerlin Parkway to US 95Concessionaire: UndeterminedContract Type: Sorm form of privatization- possibly design, build, finance, operateand maintainProject Details: The Nevada TransportationBoard has endorsed a proposal to allowfor privatized toll lanes in Las Vegas.This will be the pilot project if it receivesapproval from the 2009 Legislature. Theproject would toll cars with 1 to 2 passengerson the express lanes.Cost/Financing: (1) COSTS - $1.4 billion(Riley). (2) FINANCING - 88% of the financingwill be covered by private entities,in exchange for a 50 year concession term(Riley). (3) TOLLS - tolls will be placedon cars with less than three passengers.Private investors will use the toll revenue26 Private Roads, Public Costs


to pay back their investment at a fair rateof return, which was judged to be 13%.Anything above that rate will be sharedwith the state (Riley).Status: The project is awaiting approvalby the 2009 Legislature, which convenesin February. Currently, state law prohibitstolling roads (Saskal).Sources: (1) Rich Saskal, “Nevada MovesForward with P3 Toll Road Plan,” The BondBuyer, 19 May 2008. (2) Brendan Riley,“Budget Fallout: Toll Road Plan Ok’d,” LasVegas Review-Journal, 16 May 2008“Latest Plan for Corzine to Consider: PrivateLanes on the Turnpike,” The New YorkTimes, 9 July 2008State: New JerseyRoad: Garden State ParkwayConcessionaire: UndeterminedContract Type: LeaseProject Details: See New Jersey TurnpikeCost/Financing: UndeterminedStatus: See New Jersey TurnpikeSources: See New Jersey TurnpikeState: New JerseyRoad: New Jersey TurnpikeConcessionaire: UndeterminedContract Type: LeaseProject Details: In 2005, Acting GovernorCodey proposed either selling or leasingthe rights to operate the state’s three tollroads to private investors in order to fill thebudget deficit (Eastern Roads). Some haveadvocated selling portions of the Turnpike,starting with its congested southern portion.State legislator Ray Lesniak has calledfor the sale of a 49% interest in the NJTurnpike Authority, which owns both theTurnpike and the Parkway (Bary).Cost/Financing: (1) FEE - The proposal tosell 49% of the Authority could raise over$20 billion (Bary).Status: Public outcry led New Jersey to endplans for leasing the toll roads. Other ideashave been proposed, such as increasingtolls, but they have all been rejected. Morerecently, Gov. Corzine proposed privatizingindividual lanes on the toll roads, eitheras HOT lanes or as lanes for trucks andbuses, as suggested by Sen. Lesniak. Largeopposition exists to the plan though, and itis unlikely to pass (Schweber).Sources: (1) Andrew Bary, “Paying Up,”Barrons, 8 May 2006. (2) “Atlantic CityExpressway: Historic Overview,” EasternRoads, downloaded from www.phillyroads.com/roads/atlantic-city/. (3) Nate Schweber,State: New JerseyRoad: Atlantic City ExpresswayConcessionaire: UndeterminedContract Type: LeaseProject Details: See New Jersey TurnpikeCost/Financing: (1) FEE - Senator Gormleyproposed a concession fee of $3.75 billion(Eastern Roads).Status: See New Jersey TurnpikeSources: (1) “Atlantic City Expressway:Historic Overview,” Eastern Roads, downloadedfrom www.phillyroads.com/roads/atlantic-city/. (2) Nate Schweber, “LatestPlan for Corzine to Consider: PrivateLanes on the Turnpike,” The New YorkTimes, 9 July 2008State: New YorkRoad: No specific proposal - the TappanZee Bridge is considered a possibilityConcessionaire: UndeterminedContract Type: UndeterminedProject Details: Governor Paterson has announcedthat he is creating a commissionto study privatization and to come up withspecific recommendations. One possibleconcession the commission will consideris the Tappan Zee Bridge, which spans theHudson River north of Manhattan and willsoon have to be replaced at a cost of $9.3billion (Gormley).Cost/Financing: (1) COSTS - It will costAppendix C 27


$9.3 billion to replace the bridge (Gormley)Status: The Commission will report itsfindings in the 2009 legislative session.Sources: Michael Gormley, “FollowingOther States, New York May Lease Assets,”WTOP News, 3 October 2008State: North CarolinaRoad: Gaston Garden ParkwayConcessionaire: UndeterminedContract Type: Undetermined - the projectmay be built under a P3 agreement, butthe state has recently supplied gap fundingwhich may decrease the need for privatefinancing.Project Details: The proposal is to constructa toll road going through GastonCounty from I-485 near Charlotte/DouglasInternational Airport west to I-85 nearSouth Carolina. There has also been a suggestionto build the road just as a truckway,which would be cheaper (Marshall). DavidJoyner, executive director of NCTA, hasstated that the executive committee hasasked them to consider public private partnershipsif the state is unable to allocateadequate financing (WRAL).Cost/Financing: (1) COSTS - Constructioncosts will be between $410-750million (Toll Roads News, Marshall). (2)FINANCING - The state is able to financeonly part of the road with traditional financing,leaving a $188 million gap (TollRoads News). In 2008, the General Assemblyagreed to provide $35 million a year(beginning in 2010-11) in “gap funding”which will allow the first leg to be built.No funding for the second section of theroad has been secured (Barrett).Status: Construction will probably beginin 2010. North Carolina is still seekingfunding for the second section of theroad.Sources: (1) Michael Barret, “ResidentsHoping to Build Opposition to GardenParkway Route,” Gaston Gazette, 20 October2008. (2) Alex Marshall, “WhereShould North Carolina Go With Highways;And Should the Garden ParkwayBecome a Truckway,” Gaston Gazette, 10October 2008. (3) “North Carolina TurnpikeSeeks Subordinate Debt to Fill FundingGap for Triangle Expressway,” TollRoads News, 11 September 2007. (4) “PrivateMoney May Prove to be Best Route to TollRoads,” WRAL, 6 August 2007.State: North CarolinaRoad: Mid-Currituck BridgeConcessionaire: UndeterminedContract Type: design, build, finance, operateand maintainProject Details: The proposed bridge willgo over the Currituck Sound betweenthe mainland and the Outer Banks or thepeninsula on the ocean (Toll Roads News- Subordinate Debt). Three proposals forthe project are being considered (Preyss).NCTA is more open to a concession of theBridge than other roads because a majorityof the users will be tourists and other visitors(TRN - Subordinate Debt).Cost/Financing: (1) COSTS - Dependingon which route is chosen, the project willcost between $315-635 million (Preyss).(2) FINANCING - Preliminary studiessuggest traffic will only support $200million in traditional revenue bonds (TollRoads News - Subordinate Debt). In 2008,the Legislature agreed to proivde somegap funding for the project (Siceloff). (3)TOLLS - The agency projected that overa 39-year period, motorists would pay asmuch as $12 for a two-way trip across thebridge (Preyss)Status: North Carolina’s Turnpike boardhas decided to begin a toll concessionprocurement for the bridge (Toll RoadsNews). NCTA expects to choose a predevelopmentpartner in November 2008and award the project contract by early2010 (NCTA).Controversy: Some have expressed concernover the bridge’s effects on natural28 Private Roads, Public Costs


esources and residents of the Aydlett area(Preyss).Sources: (1) North Carolina Turnpike Authority,Mid-Currituck Bridge Project, October2008, downloaded from www.ncturnpike.org/pdf/NCTA%20Newsletter%209-30-08%20FINAL.pdf. (2) Jennifer Preyss,“Mid-Currituck Study Includes No-BridgeOption,” Daily Advance, 20 October 2008.(3) “North Carolina Turnpike Seeks SubordinateDebt to Fill Funding Gap forTriangle Expressway,” Toll Roads News, 11September 2007. (4) “North Carolina toRFP $850m Triangle Exwy DB, P3 forCurrituck Sound Bridge,” Toll Roads News,15 November 2007State: North CarolinaRoad: Monroe ConnectorConcessionaire: UndeterminedContract Type: Undetermined - the projectwas initially considered for privatization,but the state provided some gap fundingwhich may decrease the need for a concesson(Siceloff).Project Details: The project would involveconstructing a 22-mile road that wouldrun parallel to US 74 (Marshall). DavidJoyner, executive director of the NorthCarolina Turnpike Authority, stated thatthe executive committee has asked themto consider public private partnershipsif the state is unable to allocate adequatefunding (WRAL).Cost/Financing: (1) COSTS - constructionwill cost $553 million (Toll Roads News- Subordinate debt). (2) FINANCING- NCTA is only able to cover part of theconstruction costs, leaving a $151 millionfunding gap (Toll Roads News - SubordinateDebt). In 2008, however, the stateapproved gap funding of $24 million peryear to finance construction of the road(Siceloff).Status: The Legislature has provided gapfunding for the road starting in fiscal year2010-11 (Siceloff). Thus, the project maybe built without private financing.Controversy: There is concern that the roadwould bring more subdivisions to UnionCounty, which is already having difficultyproviding sewer services to new homes(Marshall).Sources: (1) Alex Marshall, “Where ShouldNorth Carolina Go With Highways, AndShould the Garden Parkway Become aTruckway,” Gaston Gazette, 10 October2008. (2) Bruce Siceloff, “State Puts CashBehind Toll Roads,” News Observer, 10 July2008. (3) “North Carolina Turnpike SeeksSubordinate Debt to Fill Funding Gap forTriangle Expressway,” Toll Roads News, 11September 2007. (4) “Private Money MayProve to be Best Route to Toll Roads,”WRAL, 6 August 2007.State: OhioRoad: Ohio TurnpikeConcessionaire: UndeterminedContract Type: UndeterminedProject Details: Privatization of the Turnpikewas first advocated by gubernatorialcandidate Ken Blackwell (Bary). GovernorStrickland opposes the privatization of theTurnpike, though has indicated that hewould still be willing to listen to argumentsin favor of privatization (Miller, ToledoBusiness Journal). A legislative task forcemade many suggestions for raising money,which included constructing private HighOccupancy Toll lanes on various roads,which may include the Turnpike (Miller).Cost/Financing: (1) FEE - Estimates placethe concession fee for the Turnpike between$1-6 billion (Ellis). (2) TOLLS - Ithas been estimated that annual cash flowfrom tolls would be $109.4 million (Ellis).Status: Strickland has created a 21st CenturyTransportation Priorities Task Forceto explore new ways to generate revenuefor highway and other transportationprojects (Miller). Most likely, no actionwill be taken until the task force releasesits final report.Appendix C 29


Controversy: 1) A study using data fromthe State of Ohio, the Federal HighwayAdministration, and the Ohio Turnpikepredicted the amount of diverted trucktraffic due to higher tolls. The researchersfound that privatization of roadways, whichusually involves increased tolls, has numerousexternalities: higher rates of accidentsas trucks are diverted to less-safe/smallerroadways, reduced quality of life for communitiesalong alternate routes, highermaintenance costs for alternate routes,higher cost of goods as drivers pass on theincreased costs, and less efficient commerceas trucks use less-desirable alternate routes(Science Daily).Sources: (1) Andrew Bary, “Paying Up,”Barrons, 8 May 2006. (2) David A. Ellis andEdward W. Hill, An Analysis of the ProposedLease of the Ohio Turnpike, Cleveland StateUniversity, 25 June 2006. (3) Jay Miller,“Ohio Facing Huge Deficit for TransportationSystem,” Crain’s Cleveland Business, 15January 2008. (4) “Toll Road PrivatizationMay Result in More Crashes on OtherRoads,” Science Daily, 15 January 2008.(5) “Indiana Luring Ohio and MI Firms,”Toledo Business Journal, 1 January 2007.State: OregonRoad: I-205 WideningConcessionaire: UndeterminedContract Type: UndeterminedProject Details: In late 2005, Oregon DOTselected Macquarie Infrastructure Groupto study toll-road options for three projects(Sunrise Corridor, Newberg-Dundee bypass,and I-205 widening). I-205 wideningwas found to be a feasbile option, howeverbecause less research has been done on it,ODOT decided to focus on the Bypass fornow (Saskal). The I-205 widening projectwould expand the road from four to sixlanes in the south corridor (I-205).Cost/Financing: UndeterminedStatus: Officials said that more details needto be finalized for the I-205 widening, andthat the agency needs to coordinate withlocal stakeholders before it can return to aserious study of the plan (Saskal).Sources: (1) Oregon Department of Transportation,I-205: The East Portland Freeway,4 February 2007, downloaded from www.oregon.gov/ODOT/HWY/REGION1/I205/generalinfo.shtml. (2) Rich Saskal,“Toll-Free State Begins Studying Its Options,”The Bond Buyer, 28 March 2007State: PennsylvaniaRoad: I-95Concessionaire: UndeterminedContract Type: Undetermined - probablya design, build, operate and maintaincontractProject Details: In June 2008, the stateSenate unanimously passed a bill thatwould allow state agencies to obtain bids forexpress toll lanes and high occupancy tolllanes. The House is still holding hearings.Construction of ETLs or HOT lanes onI-95 and the Schuylkill Expressway are thetop projects under consideration (Spett).Cost/Financing: UndeterminedStatus: The Senate has approved the solicitationof bids for the construction ofHOT lanes. The House must still passthe measure before the project can moveforward (Spett).Sources: David Spett, “Toll Lanes Consideredfor I-95, Schuylkill,” PhiladelphiaInquirer, 8 September 2008.State: PennsylvaniaRoad: Schuylkill ExpresswayConcessionaire: UndeterminedContract Type: UndeterminedProject Details: See I-95.Cost/Financing: UndeterminedStatus: See I-95.Controversy: See I-95Sources: David Spett, “Toll Lanes Consideredfor I-95, Schuylkill,” Philadelphia Inquirer,8 September 2008.30 Private Roads, Public Costs


State: PennsylvaniaRoad: Pennsylvania TurnpikeConcessionaire: A consortium of AbertisInfraestructuras, Citi Infrastructure Investors,and Criteria Caixa Corp won thelease bid (Bumsted).Contract Type: leaseProject Details: Governor Rendell proposedleasing the Turnpike to generate money fortransportation projects (Bumsted).Cost/Financing: (1) FEE - The consortiumoffered $12.8 billion for a 75 year lease.(2) COSTS - the proposal includes a planfor $5.5 billion in capital improvments onthe Turnpike (Bumsted). (3) TOLLS - theconsortium’s proposal would allow theoperator to raise tolls 25% on January 1st.Tolls would then increase 2.5% annuallyor match the rise in the CPI, whichever ishigher (Cataldo).Status: The legislature stalled in approvingthe deal and Abertis withdrew its bid.However, the consortium indicated that itplans to bid again in 2009 (Whiteman).Sources: (1) Brad Bumsted, Jim Ritchie,and Karl Andren, “$12.8 Billion High Bidto Lease Turnpike,” Pittsburgh Tribune-Review,20 May 2008. (2) Adam L. Cataldo,“Pennsylvania Offered $12.8 Billion byCiti, Abertis,” Bloomberg, 19 May 2008.(3) Lou Whiteman, “Penn Turnpike LeaseDeal Fizzles,” Daily Deal, 2 October 2008State: PennsylvaniaRoad: Mon Fayette ExpresswayConcessionaire: Three firms have beenshortlisted: Mon Valley Public PrivatePartners; Global Via Infraestructuras andURS Corp; ACS Infrastructure Developmentand Dragados USA (Tanner)Contract Type: finance, design, construct,operate and maintainProject Details: The proposal is to builda road from Pennsylvania Route 51 inJefferson Hills to I-376 in Pittsburgh andMonroeville (Tanner).Cost/Financing: (1) COSTS - it will cost$5.5 billion to complete both the MonFayette Expressway and the SouthernBeltway (Buckley)Status: Requests for proposals were issuedin September 2008. The deadline is January15th, after which turnpike officials willanalyze the submissions (Tanner).Sources: (1) Chris Buckley, “Expressway,Beltway Concepts Needed,” The ValleyIndependent, 18 September 2008. (2) DavidTanner, “Pennsylvania Turnpike ExtensionDraws Three Bidders,” Land Line, 19January 2009State: PennsylvaniaRoad: Southern BeltwayConcessionaire: See Mon Fayette ExpresswayContract Type: finance, design, construct,operate and maintainProject Details: See Mon Fayette Expressway.Cost/Financing: See Mon Fayette ExpresswayStatus: See Mon Fayette ExpresswaySources: See Mon Fayette ExpresswayState: South CarolinaRoad: I-73Concessionaire: UndeterminedContract Type: Undetermined - may be afinance/build/operate contract, or possiblyanother agreement involving the right toinstall commercial outletsProject Details: A study committee hasbeen asked to release a report on its workin February to explain what partnershipswould be allowed under exisitng law. Noroad has been named specifically, but a 105-mile new construction project on I-73 inHorry, Dillon and Marlboro counties hasbeen mentioned (Chourey). The southernportion of the road would run from I-95 toSC Route 22, while the northern portionwould go from I-95 to Hamlet (Ward).Cost/Financing: (1) COSTS - $2.4 billion.Appendix C 31


(2) FINANCING - the project will probablyrequire private financing. A 2005Federal Transportation act earmarked $81million for I-73 in South Carolina, and anadditional $3 million was allocated laterin the year. The funds are being spent onenvironmental studies and right of waypurchases (Ward).Status: The study committee will releasea report in February detailing what partnershipsare allowed under existing law(Chourey). Federal environmental permitshave already been issued for the southernportion, and permits for the northern portionare expected in the spring (Ward)Sources: (1) Sarita Chourey, “Public-PrivatePacts on Roads Considered,” AugustaChronicle, 2 October 2008. (2) Terry Ward,“I-73 Backers Seek Sources of PrivateFunding,” SCNow, 29 April 2008State: TexasRoad: Highway 130 segments 5 & 6Concessionaire: A consortium of Cintraand Zachry ConstructionContract Type: finance, build, operate andmaintainProject Details: Segments 5 & 6 will beginin Mustang Ridge and connect to I-10 inSeguin (TxDOT)Cost/Financing: (1) COSTS - $1.36 billion.(2) FEE - Cintra paid $25.8 million upfrontto construct and operate the road for 50years. (3) FINANCING - the consortiumwill supply the majority of the financing(Williamson).Status: The agreement was signed inMarch 2007. Construction will begin inthe summer of 2009, and the road shouldopen in 2012 (Wear)Sources: (1) Texas Department of Transportation,“Frequently Asked Questions,” SH130. (2) Ben Wear, “Kickoff Close for First(and only?) Private Tollway,” The Statesman,3 January 2009. (3) Richard Williamson,“Cintra Closes on $1.36B Texas Toll Project,”The Bond Buyer, 11 March 2008State: TexasRoad: TTC 35Concessionaire: Cintra-ZachryContract Type: finance, build, operate andmaintainProject Details: The proposal is to relievecongestion on I-35 by building a toll roadfrom east of San Antonio to the Dallas-FortWorth area (TxDOT)Cost/Financing: (1) COSTS - $6 billion(TxDOT). (2) FINANCING - Cintra-Zachry will finance the majority of theroad in exchange for a lease on the roadway.(3) FEE - Cintra-Zachry is payingthe state $1.2 billion for the contract(TxDOT).Status: Texas is currently negotiating amaster development plan with Cintra-Zachry (TxDOT).Sources: Texas Department of Transportation,“TTC-35 News,” Keep Texas Moving,14 May 2007State: TexasRoad: I-10 from El Paso to Orange on theLouisiana BorderConcessionaire: UndeterminedContract Type: design, build, finance, operateand maintainProject Details: The project was initiallypart of the now-defunct Trans Texas Corridor.Though Texas is no longer pursuingthe TTC, it is likely that individualsegments of the project will go forward.Texas is eligible to split federal moneywith 7 other states to reduce congestionon I-10.Cost/Financing: UndeterminedStatus: Outcry folowing the contract forTTC-35 led the government to place amoratorium on P3 contracts until 2009(Blumenthal).Sources: Ralph Blumenthal, “Proposal inTexas for Public-Private Toll Road SystemRaises an Outcry,” The New York Times, 10February 200832 Private Roads, Public Costs


State: TexasRoad: I-635 Managed Lanes ProjectConcessionaire: The state prequalified twoconsortia for the project.Contract Type: develop, design, construct,finance, maintain and operateProject Details: The proposal is to reconstructthe LBJ Freeway between I-35 E andNorth Central Expressway (Carona)Cost/Financing: (1) COSTS - in 2006,the costs were calculated at $3.5 billion(Perez).Status: A request for proposals has beenissued, and the submission deadline wasSeptember 15, 2008. Texas will reviewthese proposals, as this project has beenexempted from the two-year moratoriumon privatization deals.Sources: (1) John Carona, “More Room onthe Road: Managed Lanes Project on I-635is Critical to North Texas,” TTC News Archives,25 February 2008. (2) Benjamin G.Perez and James W. March, Public PrivatePartnerships and the Development of TransportationInfrastructure: Trends on Both Sidesof the Atlantic, Report for First InternationalConference on Funding TransportationInfrastructure, 2-3 August 2006State: TexasRoad: North Tarrant ExpressConcessionaire: Possible concessionairesinclude: NTE Mobility partners (composedof Cintra and Meridiam Infrastructure);Itinere Infrastructure LLC (SacyrSAU and Itinere Infrastructure); OHLInfrastructure Inc (OHL Concesiones,OHL Infrastructure)Contract Type: design, build, finance, operateand maintainProject Details: The project includes improvementson six segments along I-820,SH 121/183, and I-35W, with accelerateddevelopment of Segment 1. The projectwill add tolled managed express lanesand additional general purpose lanes (Tx-DOT).Cost/Financing: (1) COSTS - constructioncosts are estimated at $2 billionStatus: The Request for Proposals hasbeen issued. The environmental permittingprocess is ongoing. The project wasexempt from the moratorium placed onconcessions (TxDOT).Sources: Texas Deparment of Transportation,North Tarrant Express (Fact sheet)State: TexasRoad: Montgomery County ParkwayConcessionaire: UndeterminedContract Type: UndeterminedProject Details: The Parkway will be builteast of I-45 to serve as an alternate route(Lee).Status: It appears that the state is studyingthe project before deciding how to fundthe road, either through private financingor bonds (Lee).Sources: Renee C. Lee, “MontgomeryCounty Leaders Being Driven to CreateToll Road,” TTC News Archive, 4 December2007State: TexasRoad: Grand ParkwayConcessionaire: Grand Parkway Constructorshas made an unsolicited offer; the principalsare Williams Brothers Constructionand Dannenbaum Engineering. The proposalenvisions a joint venture with HarrisCounty Toll Road Authority serving as themanaging partner. TxDOT will solicit bidsafter the market value is calculated.Contract Type: UndeterminedProject Details: The Parkway will encirclethe Houston metropolitan area outsideHighway 6 (The Grand Parkway).Cost/Financing: (1) COSTS - the projectwill cost $5.3 billion.Status: TxDOT needs to calculate a marketvalue for the Parkway, after which it will solicitbids. The toll road authority has rightof first refusal - it has said it is interestedAppendix C 33


in operating part of the roadway, but notthe entire project (Murphy).Controversy: The road will be built inmany undeveloped areas, leading to fearsthat it will contribute to urban sprawl.Sources: (1) The Grand Parkway Association,The Grand Parkway, downloaded fromwww.grandpky.com/about%20us/default.aspState: TexasRoad: Formerly known as TTC-69Concessionaire: Zachry and ACS willdevelop a master plan for I-69 which maypave the way for the team to finance andbuild projects over the next 50 years (PublicWorks Financing).Contract Type: The Zachry team is beingpaid to create a development and financialplan for the corridor, which will give themthe right of first negotiation on certainprojects (Public Works Financing).Project Details: I-69 is a planned nationalhighway connecting Mexico, the UnitedStates, and Canada (McGuire). In Texas,I-69 will start from three border crossings(Laredo, McAllen, and Brownsville),along US 59/281/77 to Victoria. Whenthe branches converge, the roadway willcontinue along US 59 and turn towardsLouisiana. A planned branch continuesnorth on US 59 to Texarkana. The highestpriority will be to upgrade US 77 (PublicWorks Financing).Cost/Financing: (1) COSTS - total costswill be $8 billion (Public Works Financing).(2) FINANCING - private equityand some federal loans will be used (PublicWorks Financing). (3) TOLLS - I-69 willremain toll free where it overlaps with existinghighways; bypasses of cities may betolled (Public Works Financing)Status: The proposed timeline anticipatesfinancial close on the entire US 77 system in2011, and then building all the projects andupgrading US 77 within seven years. Themoratorium on concessions does not applyto this project (Public Works Financing).Controversy: I-69 was originally going tobe built over new terrain paralleling US-59, US-77 and US-281. Due to widespreadopposition from environmental groupsand property rights activists, TxDOTannounced in June 2008 that it wouldcomplete the roadway by upgrading US-59,US-77 and US-281 to interstate standardsthrough rural areas, with bypasses aroundurban centers along the route (PublicWorks Financing).Sources: (1) Lee McGuire, “TxDOT toScale Back Trans-Texas Corridor,” KVUE.com, 10 June 2008. (2) “Zachry-ACS WinsTexas 69 Road Plan,” Public Works Financing,June 2008State: VirginiaRoad: 460 Corridor ImprovementsConcessionaire: Three proposals have beensubmitted by Virginia Corridor Partners,Itinere, and Cintra.Contract Type: Design, build, finance,operate and maintainProject Details: Route 460 will be constructedbetween I-295 in Petersburg andRoute 58 bypass in Suffolk. In 2006, VDOTissued a Solicitation for Proposals to developand/or operate the road (VDOT)Status: Detailed proposals are to be submittedby Spring 2009 and an agreement shouldbe completed by Fall 2009 (VDOT).Sources: Virginia Department of Transportation,“Public Private TransportationAct Info,” US Route 460 Corridor Improvements,22 January 2009State: VirginiaRoad: I-81 CorridorConcessionaire: STAR SolutionsContract Type: Some form of privatizationProject Details: VDOT is negotiating withSTAR Solutions for improvements to theI-81 corridor. The main proposal is to buildseparate lanes for trucks along the lengthof the road (VDOT).34 Private Roads, Public Costs


Cost/Financing: UndeterminedStatus: Negotiations are continuing withSTAR Solutions (VDOT).Sources: Virginia Department of Transportation,Frequently Asked Questions aboutInterstate 81 in Virginia (fact sheet), June2007, downloaded from www.virginiadot.org/PROJECTS/constSTAN-I81-overview.aspState: VirginiaRoad: Hampton Roads-area highwaysConcessionaire: undeterminedContract Type: ConcessionProject Details: In April 2007, the legislatureauthorized Northern Virginia andthe Hampton Roads region to do concessions.Hampton Roads is proposing theimplementation of six toll road projects. InNorthern Virginia, corridor investmentsare estimated at $15.4 billion over 25 years(Toll Roads News)Cost/Financing: (1) COSTS The NorthernVirginia investments are estimated to be$15.4 billion over 25 years (Toll RoadsNews).Status: UnknownSources: “Virginia Bill Gives TollingPower to Two Regions,” Toll Roads News,9 April 2007State: VirginiaRoad: Southeastern ParkwayConcessionaire: undeterminedContract Type: UndeterminedProject Details: The Southeastern Parkwayand Greenbelt would travel 21 miles fromChesapeake to Virginia Beach. VDOTdocuments suggest that public privatepartnerships are an option. (VDOT)Cost/Financing: COSTS - The project isestimated to cost approximately $1.4 billion.Tolls are expected to cover 30 to 40percent of the costs. (Holden)Sources: (1) Virginia Department of Transportation,Southeastern Parkway and GreenbeltLocation Study, downloaded from www.virginiadot.org/projects/hamptonroads/southeastern_parkway_and_greenbelt.asp,28 January 2009; (2) Tom Holden, “SoutheasternParkway: Long Way to Go for ShortCut,” Virginian-Pilot, 18 December 2006State: VirginiaRoad: Capital BeltwayConcessionaire: Capital Beltway ExpressLLC - a joint venutre of Transurban andFluor (Toll Roads News)Contract Type: design, build, leaseProject Details: The Concessionaire willconstruct four toll lanes and direct connectorramps on 14 miles of the Capital Beltwaybetween the Springfield interchangeand a point near the Maryland border (TollRoads News).Cost/Financing: (1) COSTS - $1.93 billion.(2) FINANCING - mostly private equityand bonds backed by the consortium willbe used (VDOT). In exchange, the concessionairewill operate the road for 75 years(Toll Roads News). (3) TOLLS - Tolls willbe charged on vehicles with fewer thanthree occupants without restrictions on therates charged. The consortium predicts aninternal rate of return of 13% (Toll RoadsNews).Status: The road is scheduled for completionby spring 2014 (Toll Roads News).Controversy: 1) No limits have been placedon toll rates. (2) The state is required tocompensate the concessionaire for lost tollrevenue if the number of HOVs encroachesupon tollable capacity beyond a certainthreshold (Toll Roads News).Sources: (1) “Private Activity Bonds Issuedfor I-495,” Public Works Financing, June2008. (2) “Financial Close on 80 Year Concessionfor $1.52b Toll Lanes on CapitalBeltway N Virginia,” Toll Roads News, 20December 2007. (3) Virginia Departmentof Transportation, “Virginia HOT Lanes:Some Things Can’t Wait for Traffic,”Virginia HOT Lanes, July 2008Appendix C 35


State: VirginiaRoad: I-95 and I-395 HOT LanesConcessionaire: Fluor-Transurban; Transurbanwill hold the major equity in theproject and manage operations. Fluorwill have smaller equity and will do thedesign and construction work (Toll RoadsNews).Contract Type: design, build, operate andmanageProject Details: The project will expandthe HOV lanes and extend them south.The consortium is also expected to helpfinance public transit alternatives (VirginiaHOT Lanes).Cost/Financing: (1) COSTS - total costs areestimated at $882 million. (2) FINANC-ING - Transurban will contribute themajority of the equity in exchange for a 70year lease (Myers). (3) TOLLS - vehicleswith 3 or more passengers will travel forfree. There is no cap on the level of tolls(Weiss - HOT Lane).Status: Construction is expected to beginin 2009 and be completed in 2012 (VAMegaprojects)Controversy: (1) Tolls may be extremelyhigh. Regional transportation plannersestimate that tolls may reach $1.60 permile in crowded segments (Weiss - SteepPrices). (2) Representatives in Prince WilliamCounty worry that the roads may ruina successful carpool facility and overchargedrivers (Weiss - HOT Lane).Sources: (1) Phone conversation with MaryMyers, Public Relations Contact for theI-95/395 Project, October 14, 2008. (2)“Transurban-Fluor Beats Clark-Shirley forVA I-95/395 Concession,” Toll Roads News,1 November 2005. (3) Virginia Departmentof Transportation, “I-95/I-395 HOTLanes,” Virginia Megaprojects, 2008. (4)Virginia Department of Transportation,“Bringing Congestion Relief to I-95/395,”Virginia HOT Lanes. (5) Eric M Weiss,“HOT Lane Plan Comes with Promises:Companies Vow to Keep Traffic Flowing,Finance, Public Transit Upgrades,” TheWashington Post, 18 April 2007. (6) Eric MWeiss, “Steep Prices Projected for HOTLanes,” The Washington Post, 3 March 2007State: VirginiaRoad: Jordan Bridge ReplacementConcessionaire: Figg Bridge and BrittonHill Partners (Toll Roads News)Contract Type: demolition of previousbridge plus rights to build new toll bridgeProject Details: The private partnerspurchased the 80-year-old bridge (whichhad been closed for safety reasons) fromthe city of Chesapeake, Virginia, for anominal fee. The partners will demolishthe existing span and build and operate areplacement two-lane span. There will beno regulation of toll rates on the bridge.(Toll Roads News)Cost/Financing: COSTS - total costs areestimated at $90 million to $100 million;FINANCING - Project will be privatelyfinanced and owned by the private entitiesin perpetuity. (Toll Roads News) TOLLS- tolls are likely to be $2 each way, comparedto 75 cents on the former bridge(Forster).Status: Legislation to approve the deal ispending signature by the governor. Thenew bridge is scheduled for completion inJuly 2010.Sources: “Privately Built New JordanBridge in Chesapeake, VA Getting LegislativeApproval,” Toll Roads News, 24February 2009; Dave Forster, “LegislatorsBless Chesapeake’s Plans to Replace JordanBridge,” Virginian-Pilot, 24 February2009.36 Private Roads, Public Costs


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