PPTA Project Pipeline

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1 PPTA Project Pipeline Commonwealth of Virginia May 2012

2 Opening Remarks The Commonwealth of Virginia was developed in the 17 th century as a risky, but ultimately highly successful business venture between the private and public sectors. Today, Virginia continues to focus on creating an inviting business environment that promotes competition, encourages private investment and invites the private sector to identify and develop innovative solutions to enhance its infrastructure. As with any successful business venture, Virginia must remain focused and diligent about creating an attractive business environment. Virginia must be reflective of its past and keep looking to the future to continue searching for solutions to attract private investment. Maintaining a transportation network that allows for efficient freight movement, access to its ports and seamless interstate movement of goods and services is essential to positioning Virginia for success in the highly competitive environment of attracting private investment. Since Virginia s enabling legislation for public-private partnerships (P3) was enacted by the General Assembly in 1995, Virginia has advanced nearly $5.0 billion worth of public-private partnerships for transportation infrastructure either constructed, under construction or under agreement. In 2011, Virginia achieved commercial close on the Downtown Tunnel/Midtown Tunnel/MLK Project ($2.1B) and negotiated two extensions to the Route 58 (Tri-county/Laurel Fork $120M) and Coalfields Expressway (Doe Branch/Pound $3.8M) projects. In addition, Virginia negotiated the major commercial and business points for the nearly $1 billion I-95 Express Lanes project in Northern Virginia, which is expected to achieve commercial and financial close in Reinvigorated P3 focus In 2010, Governor McDonnell initiated a full assessment of Virginia s P3 Program in an effort to reinvigorate the development and completion of P3 Projects. The results of the assessment found that the program was limited in focus to development of highways, ownership of the program rested with multiple staff; the program was reactive and was constrained by a lack of funding for project development. In response to the assessment results, Virginia Secretary of Transportation Sean T. Connaughton, in December 2010, introduced the Public-Private Transportation Act Implementation Manual and Guidelines. The Manual provides a project delivery framework for the development and implementation of both solicited and unsolicited P3 projects that proactively identifies, develops and delivers the Commonwealth s priority transportation projects in a consistent, transparent, timely, and cost effective manner. The result of this action means Virginia s P3 program is now a proactive program-based approach rather than a project-by-project response. 1

3 In addition to the process reviews and improvements in the Implementation Manual, Secretary Connaughton created the Office of Transportation Public Private Partnerships (OTP3) to focus specific financial and business resources on the identification, development, and delivery of P3 projects across all modes of transportation in Virginia, including rail, transit, marine, aviation, space, and roadway projects. In 2011, Tony Kinn was appointed by Governor McDonnell as Director of the OTP3 and has been charged with creating an environment that encourages private investment and proactively identifies, assesses and delivers the Commonwealth's priority transportation projects. Identifying Candidate P3 Projects The result of program efforts in 2010 and 2011 has been the effective alignment of program, financial, and business resources to support efficient delivery of P3 projects in the Commonwealth. The critical next step in 2012 will be identifying, selecting, and prioritizing candidate P3 projects across all modes of transportation. This will create the first pipeline of potential P3 projects that will be assessed from a financial and business standpoint to evaluate suitability and feasibility for procurement under the PPTA. The Implementation Manual identifies several high-level screening criteria that assist in assessing whether a project is a potential candidate for procurement via the PPTA delivery method. The high-level screening criteria include whether a project is of sufficient complexity, has the potential to accelerate project development, will advance overall transportation priorities, can foster efficiencies, has the potential to transfer risk and future responsibilities to private sector, the ability to generate revenue or otherwise meet funding requirements, and the ability to raise capital. Conversely, projects that may not be suitable for PPTA procurement include projects with inconsistent support from local/state elected officials or regulatory challenges. Candidate P3 projects that meet the high-level screening criteria for advancement via the PPTA delivery method may be advanced to the detailed-level screening. For projects that demonstrate feasibility and desirability will be prioritized into short-term (less than 2 years to implement), medium-term (more than 2 and less than 4 years to implement), and long-term priorities (more than 4 and less than 6 years to implement). Next Steps Forward The P3 pipeline documentation that follows contains eight potential projects identified as candidates for P3 procurement (see page 6). These candidate P3 projects will advance through detailed-level screening so that an informed procurement decision based on business and financial analyses can be made. 2

4 Additionally, fourteen conceptual projects have been identified by the Secretary of Transportation, various Virginia transportation agencies, as well as Metropolitan Planning Organizations and other stakeholders (see page 7). In the coming months, the scope of these conceptual projects will be developed and evaluations of business and financial feasibility made. Once the high-level and detailed-level screening recommendations have been completed, the OTP3 will make recommendations to the sponsoring agency for project development and prioritization by the PPTA Steering Committee. While we consider these potential P3 projects, we must be cognizant that there are not sufficient state or federal revenues at the Commonwealth of Virginia s disposal to construct these projects. There is a misconception that developing a transportation project under the PPTA allows access to a new source of revenue. Strictly speaking it does not. However, what the PPTA does do is allow the Commonwealth to make limited state funds go further by brining private investment into the mix. The $2.1 billion dollar Midtown Tunnel project successfully did this with a mix of approximately $308 million in state funds, a $422 million federal loan obtained by the private sector, and $1.3 billion in private equity, debt, and user fees. In short, the Commonwealth paid $308 million to build the Hampton Roads region a $2.1 billion transportation improvement. Attracting continued private investments and interest in our infrastructure will be a key element to advancing these projects. Likely, user fees or tolls will be a part of the formulation needed to pay for these needed improvements. Several projects will cost in excess of a billion dollars a price tag that will require state, federal, and local funds as well as user fees to make these large new projects possible. This document should not be considered static or final. Instead it represents the first iteration of a fluid and dynamic planning tool for the Commonwealth to move forward delivering much needed infrastructure improvements across all transportation modes in a safe, efficient, and cost effective manner. We anticipate this document will be updated on a yearly basis as projects are screened and advanced, as well as new potential P3 concepts are developed. The OTP3 will continue to work with Virginia transportation agencies, local and state elected officials, our planning partners, and other transportation stakeholders to refine the P3 pipeline document. Whether these projects ultimately move forward via the PPTA, or as Design-Build or through traditional procurement methods, the Commonwealth will be better placed to make sound transportation decisions. Sean T. Connaughton Secretary of Transportation 3

5 Presentation to the Secretary of Transportation PPTA Project Pipeline May

6 PPTA Project Pipeline: Executive Summary Current PPTA projects under construction: Coalfields Expressway Route 58 Capital Beltway (I-495) HOT Lanes Route 28 Midtown Tunnel / Downtown Tunnel / MLK Extension OTP3 has 3 PPTA projects under procurement: I-95 HOT Lanes Route 460 Corridor Improvement Hampton Roads Bridge Tunnel 5

7 PPTA Project Pipeline: Executive Summary PPTA Pipeline The OTP3 has identified 8 candidate projects & 14 conceptual projects to advance in the pipeline as potentially suitable P3 transportation projects: Candidate Projects* I-95 Corridor Improvements: procurement underway in 2012 Regional Traffic Operations Centers: procurement underway in 2012 Port of Virginia: procurement underway in 2012 I-64 HOV to HOT Conversion: project development in 2012 I-64 Peninsula Improvements: project development in 2012 Hampton Roads Crossing Improvements: project development in 2012 I-66 Corridor Improvements: project development in 2013 NOVA North-South Corridor: project development in 2013 * see Appendix A for additional detail on candidate projects 6

8 PPTA Project Pipeline: Conceptual Projects Conceptual projects for further scope identification: I-495 Express Lanes additions (VDOT): extension of Capital Beltway Express Lanes along I-495. GoldStar Truck Validation System (DMV): smart technology for pre-screening truck weight/credentials at Port and toll facilities. Advertising / Sponsorship Opportunities (VDOT): opportunities for non-traditional revenues from wrapping Safety Service Patrols, 511 motorist information services, etc. Dulles Metro Rail Station Air rights opportunities (VDRPT/VDOT): to be determined Route 460 / 58 Connector (VDOT): improvements to existing 460 / 58 at intersection of 460 & Suffolk Bypass to I-664; includes widening portions of facility from 4-6 lanes & creating limited access facility. Parking Facilities Privatization (VDOT): opportunities statewide (Stafford, Spotsylvania, Petersburg) I-81 Managed Travel Lanes System (VDOT): Roanoke area managed lanes opportunities to manage peak traffic demand more efficiently Wallops Island Visitor Facilities (VCSFA): visitor center & support facilities Rest Area Enhancements (VDOT): electric car charging stations at rest areas Rest Area Enhancements (VDOT): truck parking facilities at high-priority locations at rest areas on Corridors of Statewide Significance. Cell Towers / Fiber Optic within ROW (VDOT): opportunities statewide Route 460 Business Corridor improvements (VDOT): roadway access enhancements associated with long term business development on new US 460 roadway. Route 460 / I-85 Connector (VDOT): new location corridor south of Petersburg to enhance east/west movement; would connect with 460 Business Corridor via I-85. Innovation Drive Bristol (VDOT): opportunities for collaboration with coal / energy companies. 7

9 PPTA Project Pipeline: Summary Candidate and Conceptual PPTA Projects Map 8

10 PPTA Project Pipeline: Next Steps OTP3 to advance 4 near term potential PPTA projects in 2012 I-95 Tolling Traffic Operations Centers Port of Virginia I-64 HOV / HOT OTP3 to proceed building business / financial cases, project development on 4 long term potential PPTA projects in Hampton Roads Crossing Improvements I-64 Peninsula I-66 Corridor NOVA North-South Corridor OTP3 to work with transportation agencies on scope development for 14 conceptual projects in 2012 Pipeline Webinar hosted by OTP3 for industry feedback early June 2012; see Comments on Pipeline welcome through July 2, 2012 see More information regarding the PPTA and Virginia s Office of Transportation Public- Private Partnerships is available at 9

11 Office of Transportation Public-Private Partnerships POTENTIAL PPTA PROJECTS: I-95 Corridor Improvement Project APPENDIX A The mile long I-95 corridor is identified in the Virginia Surface Transportation Plan 2035 as a corridor of statewide significance. The Virginia Department of Transportation submitted a Tolling and Pricing Opportunities Expression of Interest for the Interstate System Reconstruction and Rehabilitation Pilot Program in January In September 2011, the Federal Highway Administration granted conditional provisional approval for tolling of I-95 to allow the Commonwealth to implement an improvement program that includes capacity expansion, rehabilitation and maintenance of the pavement, bridges, and structures, and operational technology to address congestion in the corridor and improve the overall conditions of the facility. This project complements current plans for High- Occupancy Toll lanes on the northern portion of the I-95 corridor to better manage capacity. As the tolling program is developed, the estimated toll revenues and all other available funds will be considered in developing a balanced approach to maintaining and improving the I-95 corridor. The OTP3 recommends advancing the I-95 Corridor Improvement project through the high-level screening phase of the PPTA process. Subsequent detailed-level screening will consider elements of a business case for the project, including sketch level traffic and revenue analysis, risk analysis, cost benefit analysis, and preliminary cost analyses (construction, operations, and maintenance). Once the detailed-level review is complete, the OTP3 will provide a recommendation to the PPTA Steering Committee as to whether the project remains a good candidate PPTA project and the level of priority for the Commonwealth to advance into the procurement phase. Regional Traffic Operations Centers The Commonwealth of Virginia currently operates 5 regional Traffic Operations Centers in Hampton Roads, Salem, Staunton, Northern Virginia, and Richmond. The Centers use advanced technology to monitor traffic conditions, keeping motorists informed of real-time weather and road conditions. The technology helps tourists, shippers, and local commuters navigate the highways, bridges, and tunnels throughout the Commonwealth via advanced electronic information and communication technologies. Exploration of a more centralized and consistent ITS platform will enhance the overall traffic management operations throughout the Commonwealth. The procurement process is currently underway and additional information is available at Hampton Roads I-64 HOV to Express Lanes Conversion Approximately 40 miles of High Occupancy Vehicle lanes (HOV-2) exist on I-64/ I-264 / I-564 in the cities of Norfolk, Virginia Beach, Chesapeake, Newport News and Hampton. I-64 in Norfolk has an 8-mile-long 2-lane barrier-separated reversible roadway for peak period HOV-2 traffic, and another 7 miles of left diamond HOV-2 lanes. I-564 in Norfolk has 3 miles of left diamond HOV-2 lanes. I-264 Norfolk-Virginia Beach Expressway has 10 miles of left diamond HOV-2 lanes. I-264 in Norfolk has 5 miles of left diamond 10

12 Office of Transportation Public-Private Partnerships HOV-2 lanes. I-64 in Newport News and Hampton has 7 miles of left diamond HOV-2 lanes, with another 2.5 miles of left diamond HOV-2 lanes. Approximately 400 cars per lane per hour use the I-64 carpool lanes, and the usage trend is downward, with fewer and fewer carpoolers using the HOV facility. The general criterion of 700 cars/lane/hour represents the minimum usage threshold for HOV facilities. With underutilized capacity in HOV lanes, converting it to Express Lanes (high occupancy toll lanes) makes use of this excess capacity. This offers the traveling public a choice between continuing to use general-purpose lanes at no charge and paying a toll to use the Express Lanes. This would reduce congestion overall in the general purpose lanes, generate revenue for corridor improvements, and provide additional travel options for the public. The OTP3 recommends communication with VDOT to advance through the high-level screening phase of the PPTA process. This will allow potential opportunities for private sector innovation to be optimized and the project scope more fully developed. Subsequent detailed-level screening would consider elements of business and financial cases for the project as well as making a recommendation to the PPTA Steering Committee on the feasibility/desirability of the candidate project. Hampton Roads Crossing Improvement Project The Hampton Roads Crossing Improvement Project consists of improvements associated with the Third Crossing project, Patriot s Crossing, as well as the Hampton Roads Bridge Tunnel project. This project provides the best overall regional improvement to total mobility, moving goods and people efficiently within the Hampton Roads area. The Third Crossing / Patriot s Crossing project improvements include: New bridge tunnel and roadway from existing I-664 Bridge Tunnel to I-564 in Norfolk. New bridge tunnel parallel to existing I-664 MMMBT with 2 tubes of tunnel carrying 4 conventional travel lanes and 1 tube carrying 2 multimodal use lanes. 4-lane connection from new facility, east of Craney Island, running south to VA 164 in Portsmouth. 4-lane Craney Island Connector to Rt Widen I-664 on the Peninsula to 8 conventional travel lanes and 2 additional lanes for multimodal use. Widen I-664 on Southside to 6 conventional travel lanes. The Hampton Roads Bridge Tunnel project includes bridge / tunnel / roadway improvements from I- 64/I-664 to I-64/I-564 interchange. VDOT is currently reevaluating the Hampton Roads Third Crossing EIS, including the improvements associated with Patriot s Crossing. VDOT is also completing an EIS for the Hampton Roads Bridge Tunnel improvements, anticipated in spring The OTP3 recommends advancing the Hampton Roads Crossing Improvement project through the highlevel screening phase of the PPTA process. Subsequent detailed-level screening will consider elements of a business case for the project, including sketch level traffic and revenue analysis, risk analysis, cost benefit analysis, and preliminary cost analyses (construction, operations, and maintenance). Once the 11

13 Office of Transportation Public-Private Partnerships detailed-level review is complete, the OTP3 will provide a recommendation to the PPTA Steering Committee as to whether the project remains a good candidate PPTA project and the level of priority for the Commonwealth to advance into the procurement phase. Port of Virginia The Port of Virginia is a leading ocean container terminal complex on the US East Coast and owns the Norfolk International Terminal, the Portsmouth Marine Terminal, the Newport News Marine Terminal, and the Virginia Inland Port. Additionally, the Virginia Port Authority (VPA) currently leases the APM Terminal facility in Portsmouth and the Port of Richmond. The Commonwealth accepted an unsolicited proposal from APM Terminals, Inc. (APMT) in April On May 23, 2012, the OTP3 and VPA issued a Request for Alternative Proposals to allow private entities to submit alternative proposals by July 12, Once the alternative proposals, if any, are received the Commonwealth will determine whether or not to advance one or more or none of the proposals. Through potential public-private partnerships, the VPA and OTP3 look to maximize the tremendous economic impact of the port, minimize state oversight of port facilities, and encourage port facility expansion and operational efficiencies through the private sector. Additional information is available at I-64 Peninsula Improvements Project The approximately 75 mile long I-64 corridor from I-95 in City of Richmond to I-664 in City of Hampton is part of the East-West Corridor designated in the Virginia Surface Transportation Plan 2035 as a corridor of statewide significance. The roadway serves as a vital link between two major metropolitan areas for transport of people and goods, military accessibility, tourism, and hurricane evacuation. Specifically transportation improvements within the corridor will consider capacity, roadway deficiencies, safety, freight traffic, economic development/tourism, emergency preparedness, and military connectivity. The OTP3 recommends the I-64 Peninsula project be advanced to the detail-level screening phase of the PPTA process. The detailed-level screening will consider elements of a business case for the project, including sketch level traffic and revenue analysis, risk analysis, cost benefit analysis, and preliminary cost analyses (construction, operations, and maintenance). Additionally, tolling options such as Express Lanes will be considered as congestion management for the corridor. Once the detailed-level review is complete, the OTP3 will provide a recommendation to the PPTA Steering Committee as to whether the project remains a good candidate PPTA project and the level of priority for the Commonwealth to advance into the procurement phase. I-66 Corridor Multimodal Improvement Project The I-66 Multimodal Improvements project is currently under study by the Virginia Department of Transportation and the Virginia Department of Rail and Public Transportation to identify potential multimodal improvements between I-495 Capital Beltway, Fairfax County and Route 15, Prince William County (approximately 25 miles). The study will consider possible improvements to I-66, Metrorail, Virginia Railway Express, and express bus service. 12

14 Office of Transportation Public-Private Partnerships The Tier 1 Environmental Impact Statement will focus on broad transportation issues within the I-66 corridor including purpose and need, travel modes (bus, carpool, rail transit, car, etc.), technology choices, and the general location and type of proposed improvements. Tolling will be considered as a corridor wide concept. Tier 2 environmental analyses would then focus on site-specific improvements (impacts, costs, mitigation) identified within the corridor. The OTP3 recommends I-66 Multimodal Improvements project be advanced through the high-level screening into the detail-level screening phase of the PPTA process. The detailed-level screening will consider elements of a business case for the project, including sketch level traffic and revenue analysis, risk analysis, cost benefit analysis, and preliminary cost analyses (construction, operations, and maintenance). Once the detailed-level review is complete, the OTP3 will provide a recommendation to the PPTA Steering Committee as to whether the project remains a good candidate PPTA project and the level of priority for the Commonwealth to advance into the procurement phase. NOVA North-South Corridor The Commonwealth Transportation Board (CTB) passed a resolution October 19, 2011 to begin studies for improvements north of the northern terminus of the preferred Tri-County Parkway alternative to address connectivity to Dulles International Airport, as well as address other multimodal aspects of Prince William, Loudoun, and Fairfax Counties comprehensive plans. This project is referred to as the Northern Virginia North-South Corridor of Statewide Significance in the VTrans 2035 plan. The corridor master plan is currently being developed. The OTP3 recommends advancing the NOVA North-South Corridor through the high-level screening phase of the PPTA process. Subsequent detailed-level screening will consider elements of a business case for the project, including sketch level traffic and revenue analysis, risk analysis, cost benefit analysis, and preliminary cost analyses (construction, operations, and maintenance). Once the detailedlevel review is complete, the OTP3 will provide a recommendation to the PPTA Steering Committee as to whether the project remains a good candidate PPTA project and the level of priority for the Commonwealth to advance into the procurement phase. 13

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