Regions Hampton Roads

VDOT plans to build a second Midtown Tunnel in Hampton Roads

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The Virginia Department of Transportation (VDOT) has announced a $2.1 billion public/private partnership project, which would include the creation of a second Midtown Tunnel in Hampton Roads.

Under the deal, Elizabeth River Crossings (ERC), a joint venture between Skanska Infrastructure Development and Macquarie Group, will build a new Midtown Tunnel, rehabilitate the existing Midtown Tunnel and Downtown Tunnels, and extend the Martin Luther King Freeway.

The agreement has been under negotiation for almost five months between VDOT, ERC and the new Office of Transportation Public-Private Partnerships. Construction will begin in 2012.

“Virginia is recognized as a national leader in leveraging limited public dollars to attract significant private-sector investment and innovation, making complex transportation projects possible,” Gov. Bob McDonnell said in a statement. “By partnering with the private sector, Virginia can advance construction of a second Midtown Tunnel and make other improvements that are critical to the mobility, safety and the economy of the Hampton Roads region.”

State Transportation Secretary Sean T. Connaughton said the use of public-private partnership structure will enable VDOT to attract approximately $1.7 billion in private investment.

Under the agreement, VDOT will maintain ownership of the infrastructure and will oversee ERC’s operations. The company will finance, build, operate and maintain the facilities for a 58-year period. ERC will be paid for finishing the project on a performance-based, fixed-price, fixed-date contract.

The total value of the deal is $2.1 billion. That figure includes financing, designing, building, maintaining and operating the tunnels and the MLK extension.

The project will be financed through tolls, initially ranging from $1.59 to $1.84 per car for the tunnels and 50 cents for the Martin Luther King Freeway extension for tunnel users and $1 for non-tunnel users.
Tolls will be collected electronically using E-ZPass.

VDOT will contribute $362 million to lower the tolls. ERC will provide financing through a $422 million federal TIFIA (Transportation Infrastructure Finance and Innovation Act) loan, and approximately $1.3 billion through equity, debt and revenue from operations.

The project includes:
• Doubling the capacity of the Midtown Tunnel by building an additional two-lane tunnel near the existing one under the Elizabeth River
• Increasing transit service between Portsmouth and Norfolk
• Rehabilitating the existing Midtown Tunnel and both of the Downtown Tunnels
• Extending the Martin Luther King Freeway from London Boulevard to I-264, with an interchange at High Street
• Modifying the interchange at Brambleton Avenue/Hampton Boulevard in Norfolk



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