- Associated Press - Tuesday, May 19, 2015

VIENNA, Va. (AP) - Virginia may rely less on private financing as it embarks on its next massive transportation project: adding express toll lanes on Interstate 66 outside the Capital Beltway, Secretary of Transportation Aubrey Layne said Tuesday.

Layne told the Commonwealth Transportation Board that Virginia might save as much as $1 billion on the $2.1 billion project over the next 40 years by keeping the project under state control rather than doing a public-private partnership.

The savings would come by reducing some of the upfront costs and by capturing toll revenue that would otherwise be lost if the state entered a public-private partnership.

Such partnerships have become the default method for Virginia to undertake major road projects, like adding express lanes to the Capital Beltway and I-95. On those projects, the private sector paid for much of the construction and gets to keep the toll revenue in return.

Express lane projects typically have variable tolls, with rates going up when traffic is bad. Carpools of three or more are exempt from the tolls.

Layne said the state needs to make sure any future public-private partnerships are a good deal for taxpayers.

Layne was careful to emphasize that he is still open to public-private partnerships, but wants to enter them only when they make financial sense.

In the past, he said, he believes that an ideological or philosophical preference for turning work over to the private sector may have obscured whether the partnerships were truly a good deal. He said that while the partnerships are designed to reduce financial risk to the state, that hasn’t always happened. A public-private partnership in southeast Virginia to expand U.S. 460 left the state on the hook for hundreds of millions of dollars in upfront costs when environmental permits couldn’t be obtained.

Layne said he does not believe that would have happened if the state had done the project on its own.

He said each project should be evaluated on a case-by-case basis, and acknowledged it can be hard to know what’s a good deal because it’s difficult to project how much toll revenue a project will generate.

Layne also said the state can do a better job of ensuring that expansion projects accommodate mass transit if the work is kept in house and not farmed out to the private sector.

The plans for I-66 call for adding two express lanes in each direction on a 25-mile stretch from U.S. 15 in Haymarket to the Capital Beltway, with construction to begin in 2017. There are also plans to convert lanes inside the Capital Beltway to express lanes, but that project faces challenges from Arlington County, which has long opposed any expansion of the highway inside the Beltway.

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