If you look at a map and try to find a toll road between Petersburg, Va., and Suffolk, Va., you won’t find it. It’s a major reason why the Commonwealth of Virginia is reconsidering its use of public-private partnerships.
The commonwealth also wants to recoup as much of the $256 million dollars it shelled out for that particular road deal as it can.
A firm called 460 Mobility Partners was selected to work with the commonwealth to build a 55-mile long toll road from the Richmond area to Hampton Roads to help facilitate access to the Port of Virginia. The project, though, hit several road blocks, according to a report by The Washington Post. The big one was that the federal government would not provide the permits needed to move the project forward.
Nevertheless, under the agreement, 460 Mobility Partners was getting automatic monthly payments from the Commonwealth of Virginia, even though the firm didn’t start any work on the project.
The deal underscores the serious flaws in the way these deals are negotiated, often leaving the government with the short end of the stick.
The Washington Post reports that private negotiators were doing a better job at getting a good deal than state negotiators. Transportation Secretary Aubrey Layne told the paper that the private firms had more entrepreneurial and negotiating experience when working out these deals and that state officials had more “process oriented” backgrounds, leading to weaker deals for the commonwealth.
This has the McAuliffe administration reconsidering how it goes about financing major road projects, especially the plan to add tolls on I-66.
A recent state analysis found that keeping the entire construction and financing process under state control could net Virginia anywhere between $200- to $500 million dollars in profits over 40 years. Those funds could be used for other road projects. It would also cost the commonwealth half as much up front as it would doing a public-private partnership.
As for the U.S. 460 project in southern Virginia, the McAuliffe administration canceled its contract with the firm in April and is now working on a 17-mile long project in that area instead.
The commonwealth is now negotiating with the firm to come up with a financial agreement to end their contract. The two parties have until mid-June and if they don’t come to a deal, the matter could be decided in court.
Layne told the paper that the company negotiated in good faith with the state, however it is the commonwealth’s responsibility to protect its interests. The state is looking for the firm to prove that the money given to them was actually earned, since it received millions of state dollars but did not do much work.
WTOP’s Dennis Foley contributed to this report
