Gov. Bob McDonnell announced Thursday that the state has reached a commercial and financial close with U.S 460 Mobility Partners (a partnership of Ferrovial Agroman S.A. and American Infrastructure) and the Route 460 Funding Corp. of Virginia to finance, design and build a new 55-mile section of U.S. Route 460 in southeastern Virginia.
Project development will begin immediately for the $1.4 billion roadway, the governor said, with the bulk of the money for construction ―$1.1 billion ― coming from public sources. Some opponents of the project are questioning the amount of public funding spent on a road that is expected to have between 5,000 and 6,000 vehicles per day.
In 2003, the General Assembly passed a law requiring the Virginia Department of Transportation (VDOT) to build a new stretch of U.S. 460 under the Public-Private Transportation Act of 1995. “Legislative leaders supported the project because it would improve safety for motorists and connectivity for freight and military traffic among other benefits,” McDonnell said in a statement. “Today, the commonwealth is finally delivering on that need and building a project that will not only make transportation better for the southeastern region and the state, it will also generate jobs and economic development opportunities, bringing extensive long-term benefits in so many ways.”
The project is expected to generate about 4,000 jobs during construction and 14,000 jobs over the long-term, according to Chmura Economics and Analytics. Other expected benefits:
• Attract new business opportunities, boost tourism and accommodate greater freight traffic from the growth in demand at the Port of Virginia
• Provide a reliable alternative to I-64 between Richmond and Norfolk, saving 20 minutes compared to taking the existing U.S. 460
• Chmura Economics and Analytics estimates that the new highway will have an annual economic impact of $7.3 billion by 2020
The new U.S. 460 will be a four-lane divided highway from Prince George County to Suffolk. Tolls are expected to be $3.69 for cars and $11.72 for trucks. The toll road will run parallel to the existing U.S. 460, which will remain a free alternative.
VDOT will work with the Route 460 Funding Corp. of Virginia to lead the project and oversee work performed by U.S. 460 Mobility Partners. “The private-sector team will design and build the project at a fixed cost by a fixed date and will take significant risks associated with delivering the project,” said VDOT Commissioner Whirley.
VDOT will retain ownership of the new road and all potential excess revenues. The Route 460 Funding Corp. of Virginia is a non-profit corporation that has sold tax-exempt bonds to finance part of the project. It will collect the tolls, adjust toll rates and manage the toll collection system over the course of 40 years.
Funding will come from the following sources:
• Public funding from VDOT – $903 million, lower than originally forecasted due to reduced interest rates in the bond market. A lower amount is anticipated should the commonwealth secure a low-interest federal loan from the Transportation Infrastructure Finance and Innovation Act (TIFIA) program.
• Public funding from the Virginia Port Authority – $250 million, with a lower amount possible if a TIFIA loan is secured.
• Private sector tax-exempt bonds ― $243 million (net amount).
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