The numbers, although impressive – Virginia currently has 22 public-private partnership (PPP; P3) projects in the pipeline, more than all other states combined – are not the only testament to success. Industry experts everywhere often refer to Virginia as a role model when it comes to P3s.
“We’re lucky,” Tony Kinn, director of Virginia’s Office of Transportation of Public-Private Partnerships (OTP3) said, explaining the state’s achievements, at a forum organised by the Washington DC-based Brookings Institution titled “Can-Do States: A New Era in Infrastructure Investment” in July.
“We have a state law in place since 1995; we have strong support in the legislature; we have a strong secretary of transportation; we have a strong governor,” he said. “And they believe – they believe totally – that infrastructure is the key component of Virginia’s growth.”
In the case of Virginia Governor Bob McDonnell, that belief has translated into specific actions which have generated momentum for infrastructure P3 projects. The first was an executive order issued in May 2012 with which McDonnell delegated his powers and duties to Secretary of Transportation Sean T. Connaughton, giving him the authority to receive, review and act on solicited and unsolicited proposals involving the Public-Private Transportation Act of 1995 and the Virginia Port Authority’s transportation facilities.
In June, the Governor announced the opening of OTP3, which is responsible for the development of P3s across all modes of transportation. The office works in coordination with the Virginia Department of Transportation (VDOT) and the state’s six transportation agencies.
“The creation of this office is another step forward in implementing Gov. Bob McDonnell’s vision to involve and partner with the private sector in order to address Virginia’s transportation needs,” Connaughton had said at the time.
While Virginia has had enabling legislation in place since 1995, the creation of a dedicated agency has certainly boosted the number of transportation P3 projects moving through the pipeline.
In the past five years, Virginia closed $8.1 billion worth of P3 deals – $6 billion closed in 2012 alone.
“There was no pipeline,” Kinn told Infrastructure Investor in a recent interview. “So we created the pipeline.”
The four key projects – the Interstate 495 (I-495) Express Lanes, the I-95 Express Lanes, the US Route 460 Corridor and the Midtown Tunnel – which either reached financial close or entered the construction phase in 2012 – generated roughly $11.4 billion in economic activity and supported 58,700 jobs, according to OTP3 data.
That has certainly been a contributing factor to the budget surplus the state reported for fiscal year 2013 – the fourth consecutive budget surplus of the current administration.
This latest surplus – Virginia’s largest since 2005 – puts the cumulative surplus total during McDonnell’s administration at nearly $2 billion, according to the governor’s office.
McDonnell will present the next biennial budget in December right before his four-year term expires. He will not run for a second term at this time, since state law prohibits him, as it does all incumbent governors, from serving two consecutive terms. He can however, run for office in the future if he wishes to do so.
McDonnell is the fifth winner of our award, following in the footsteps of India’s Roads Minister Kamal Nath in 2009; Mexico’s President Felipe Calderon in 2010; Canada’s Finance Minister James Flaherty in 2011; and Australia’s Minister for Infrastructure and Transport Anthony Albanese last year.
Previously referred to as a “Minister of the Year” award, we decided to introduce the “Public Official” tag in order to include those markets – such as the US – where “Minister” is not widely recognised.