Virginia chooses toll concession for I-66

After considering three different delivery methods, the state has decided that the design, build, finance, operate and maintain model is best for the $2.1bn road project.

The Virginia Department of Transportation (VDOT) will release a draft Request for Proposals (RFP) this month now that it has determined that it is “in the public’s best interest” for the private sector to design, build, finance, operate and maintain (DBFOM) the Transform66 – Outside the Beltway project.

While VDOT had decided to procure the $2.1 billion project under the state’s Public Private Transportation Act (PPTA) in August, it was exploring two other delivery methods in addition to DBFOM. These were a design-build-operate-maintain (DBOM) model and a design-build-alternative technical concepts (DB-ATC) scheme that did not include private financing.

“My decision is based on the facts and what’s in the best interest of the public,” Charlie Kilpatrick, VDOT Commissioner, said in a statement. “The commonwealth put the new P3 law into action by closely evaluating risk and what would make the best business sense for the commonwealth. We developed business terms that would bring the greatest benefits to the public.”

According to VDOT, the three private sector teams expressing an interest in financing the project have indicated that they can meet or beat the commonwealth’s terms. These include a maximum public cost of $600 million, with the private sector covering the remainder of the construction costs, and $350 million in net present value provided for corridor improvements over the term of the deal. While the agency did not specify the concession term, it stated it will not exceed 40 years.

The three consortia interested in developing and financing the project are Express Partners, teaming Transurban with Skanska; I-66 Express Mobility Partners, with Cintra and Meridiam Infrastructure participating as equal equity partners; and Transformative Solution Partners, comprising InfraRed Capital Partners, Isolux and Fluor.

The project, which should not be confused with Transform66 – Inside the Beltway, entails improving 25 miles of the interstate corridor by adding two express lanes along three regular lanes in each direction, with space made available for transit options to be added in the future. It also involves building park and ride facilities as well as undertaking corridor-wide bike, trail and pedestrian improvements. 

VDOT plans to release a final RFP in May and select a preferred bidder in the fall of 2016. Financial close is expected in the spring of 2017.