WASHINGTON — Toll lanes on Interstate 395 are set to take another step forward next week, when a state transportation panel is expected to approve a $45 million loan for the project.
The Virginia Transportation Infrastructure Bank Advisory Panel will recommend Tuesday that the Commonwealth Transportation Board approve the loan to Transurban, the operator of the existing 95 and 495 Express Lanes.
The loan would be repaid within 30 years of the end of construction through toll payments, beginning with interest payments in June 2020 and principal payments in December 2024.
The northern extension will convert the eight miles of 395 HOV lanes to 24/7 HOV or toll lanes. A 2.2-mile southern extension of the 95 Express Lanes just beyond Garrisonville Road is already under construction and is due to open next year. A longer extension to the south is in the planning stages.
The Commonwealth Transportation Board is separately set next week to give Virginia Department of Transportation Commissioner Charlie Kilpatrick authority to enter into federal agreements needed to begin similar tolling on Interstate 66, starting with rush-hour only tolls inside the Capital Beltway later this year.
In addition to converting the existing HOV lanes to toll lanes, the I-395 work also will include construction at the Duke Street and Edsall Road interchanges and some additional space in the regular traffic lanes between Duke Street and Edsall Road.
Full construction on the conversion is expected to start this summer, with the lanes switching over to tolls around 2020. Like the other HOV or toll lanes in the region, the lanes will be free for drivers with three or more people in the car total and an E-ZPass Flex switched to HOV mode.
The total cost of the I-395 project is projected to be $342 million, with additional funding beyond the state loan coming through private activity bonds and $161 million in private equity.
The loan terms do require an independent audit of Transurban’s financial models.
The state advisory panel found Transurban could likely “sustain a substantial decrease in total system revenues and still pay total annual debt service,” which reduces the revenue risk for the state.
If, as expected, the Commonwealth Transportation Board formally approves the loan Wednesday, the Virginia Transportation Infrastructure Bank would only have about $3 million available for other projects.
The bank is intended to help finance road, port, rail and airport projects in a way that draws both public and private funds.
The largest loan, $151 million, closed with the City of Chesapeake in 2012. The bank’s three other loans have gone to extend Pacific Boulevard in Loudoun County ($36 million in 2013), to help finance a tunnel project for the Chesapeake Bay Bridge Tunnel District ($50 million in 2016) and to help construct the new Potomac Yard Metro Station that will be built on the Blue and Yellow lines in Alexandria ($50 million in 2016).
Metro is currently reviewing the combined design and construction bids submitted last month for the Potomac Yard stop. A contract is due to be awarded in June. The station will be between the Reagan National Airport and Braddock Road stations.