Deals

Virginia advances draft P3s to procurement

I-66 corridor improvements worth $2bn and air rights development will move into the procurement stage in 2013-2014.

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Improvements on Interstate 66 (I-66) and air rights development in Arlington County are two of the 10 candidate projects that will move into the procurement stage in 2013-2014, Virginia’s Office of Transportation Public-Private Partnerships (OTP3) announced on Monday, in a web presentation providing an overview of the state’s public-private partnership (P3) programme.

The I-66 project, with an estimated cost of about $2 billion, involves improvements on a 25-mile section of the highway aimed at reducing traffic congestion.

“We’ve posted a Request for Information (RFI) on June 28,”said OTP3 programme manager Jackie Cromwell. A Request for Qualifications may go out in early spring 2014, followed by a Request for Proposals, possibly in 2015, she added.

Earlier this month, an RFI was posted for the development of mixed use facilities above I-66 at the East Falls Church metro station and at the Rosslyn metro station in Arlington County. The revenues that would be generated through this air rights pilot project could go towards funding other transportation projects. While the concept is not new to the US, it is new to the state of Virginia.

“The idea with the RFI is going to the private sector to get feedback on areas of business, which, frankly, we don’t know a whole lot about,” Cromwell said. “Our backgrounds tend to be roadway-centric. This is a little different so we are seeking input from folks that do this on a daily basis.”

According to the detail-level screening report released in April, the potential financial return to Virginia’s Department of Transportation (VDOT) can range from a net present value of $12.5 million to more than $22 million, with anticipated annual revenue ranging between $500,000 to $1.5 million, depending on the transaction structure.

OTP3 has also been working closely with the VDOT, the department of the treasury, and the office of the attorney general (OAG), to explore whether availability payments are an option for future P3s.

“While we’re advancing and proving the concept, we’re also looking at some projects that may be good candidate projects for the application of availability payments if we get the ‘thumbs-up’ from treasury and the OAG that the concept is viable,” Cromwell explained.