Nearly $1.2 billion from the Department of Transportation in the form of a direct loan and tax-exempt private-activity bonds will jump-start the construction of high-technology express lanes on the Capital Beltway in Virginia.
“By embracing the powerful mix of technology and private-sector resources and expertise, thousands of drivers currently stuck in traffic every day will enjoy the freedom of free-flowing lanes on one of the nation’s most congested highways,” U.S. Secretary of Transportation Mary Peters said Thursday, Dec. 20.
The 14-mile project, estimated to cost $1.9 billion, includes two new variably priced high-occupancy-toll (HOT) lanes added to the Capital Beltway between Georgetown Pike and the Springfield Interchange. Two private companies, Transurban and Fluor Enterprises, will finance and operate the facility. The Commonwealth of Virginia also is providing resources to the public-private partnership.
When construction is finished, with two additional lanes on each side of the Beltway, the two existing middle lanes will be converted to HOT lanes with prices that fluctuate according to traffic volume. The price fluctuations are designed to ensure the facility never becomes congested. The companies will maintain and operate the express lanes, using facility revenues to repay the $588 million loan and the $600 million in private-activity bonds.
The loan was made possible through DOT’s Transportation Infrastructure Finance and Innovation Act loan program that encourages private-sector participation in the financing of highway projects with flexible repayment terms.
As part of the surface transportation legislation signed in August 2005, private companies building and operating public-use facilities are authorized to borrow up to $15 billion nationwide on a tax-exempt basis to build highways and certain freight facilities. So far, DOT has authorized the issuance of $3 billion in these private-activity bonds and expects to issue billions more in the upcoming months.