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Wednesday, December 23, 2020
Peace on Earth, Good Will Towards All

Wow! Key 495/270 Luxury Lane Decision Due
In Weeks Says New MDOT Timeline

A new timeline shows MDOT selecting a private partner for its $11 billion I-495/I-270 Luxury Lane boondoggle before completing reviews under the National Environmental Policy Act and negotiations with agencies that are critical of the project and control land the State needs to expand the Beltway.

According to a
December 17 MDOT slide presentation to the Maryland Transportation Authority, MDOT expects to receive proposals from the four companies bidding on what is billed as the country's biggest P3 by December 31, about a month after they were told to send them in.

A company will be picked in February, then rushed through approval process by the MDTA and Board of Public Works so work on the first phase of the project can start. (Phase 1 envisions expanding the American Legion Bridge, I-495 to the western I-270 spur, and I-270 up to I-370 for Luxury Lanes.)

Missing from the timeline is any mention of when MDOT will respond to the nearly 3000 comments submitted on the Draft Environmental Impact Statement or good-faith discussions with other agencies.

The new timeline also omits a start date for the environmental impact study for toll lanes on I-270 between Shady Grove and Frederick, which had been scheduled to start this past fall, adds
Maryland Transit Opportunities Coalition chair Ben Ross. MDOT instead plans to issue a "pre-NEPA report" this coming spring and host a public comment period. Based on current MDOT data rush hour tolls on I-270 up to Frederick are expected to average $50 during rush hour.
The omissions are raising questions about the process at other agencies working on the expansion plan. "How do they come up with a preferred alternative without going through the NEPA process," asked one planning official. "How do they develop a mitigation plan before the homework is done? Are we wasting our time?"

Click here to see a video of the
MDOT I-495/I-270 Tollway Update to Maryland Transportation Authority (Presentation starts at 1:49:40).

February 1 Comment Deadline Set for
I-495/American Legion Bridge Transit Plan

Heads up. February 1, 2021 is the deadline for submitting your comments on the draft recommendations for public transportation on I-495 across the American Legion Bridge developed by the Department of Rail and Public Transportation (DRPT) and the Maryland Department of Transportation Maryland Transit Administration.

DRPT has also scheduled January 12 Virtual Public Meeting at 7 pm to brief the public, answer questions, and accept live public comment.
The transit plan, which predictably nixes trains in favor of giving buses access to the proposed tollways, is being called a “complement” to the I-495 NEXT project and Maryland’s Managed Lanes Study, both of which envision new multi-billion dollar public-private partnerships to widen the Beltway and I-270 with more for-profit tollways.

There are three reasons people see the transit study as a last-minute effort to shield the Luxury Lane proposals from even more litigation risk. The content offers nothing new, the analysis is superficial compared to pre-tollway transit studies, and the timing allows for a brief one month comment period during a public-participation-suppressing pandemic and a heated Maryland debate over P3 tollways on I-495/I-270.

All of which suggests the latest transit study is mainly an effort to fill in some gaps in the 495 NEXT and I-495/I-270 Luxury Lanes' environmental analysis, which failed to seriously consider alternatives to building more for-profit Luxury Lanes, like mass transit. (Considering such alternatives is required under the National Environmental Policy Act.)

So what's the next step? Comment. Consider focusing on the timing, the lack of substantive market analysis. Marylanders submitted nearly 3000 comments on the flawed Draft Environmental Impact Statement for the $11 billion I-495/I-270 boondoggle. Comments matter. 

To send your comments on the transit recommendations use this online form or mail them to DRPT Attn: Ciara Williams. 1725 Duke Street, Suite 675. Alexandria, VA 22314. Tel: (703) 253-3324

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Transurban Sale Shows How Luxury Lanes
Fill Company Coffers Without Easing Traffic

Let us repeat: the main point of public-private partnership (P3) toll roads is to generate princely profits for toll road companies and not deliver promised benefits (faster traffic at no-net taxpayer cost) to the public.

“It’s about filling our coffers,” Transurban’s North America operations president Jennifer Aument told the
The Washington Post after her company earned $2.8 billion by selling half its interest in existing and proposed tollways (including at least parts of the I-495/I-270 Luxury Lane boondoggle) to private investors.

And fill them they did, despite the fact that some of the roads haven't made a dime in years.

Let's do the numbers. The total cost of the I-95, I-395, and I-495 P3 high-occupancy toll (HOT) lanes in Northern Virginia was about $3.7 billion. Of that, $807.4 million (22.6 percent) was private equity. The rest of the funding came through public grants, loans and bond programs.

Now sell half of the estimated private stake ($403.7 million) for $2.8 billion and you've earned about $2.3 billion. Plug that into your calculator and-- voila -- a juicy 593% return on investment (ROI).

Some caveats: these estimates are based on public information and exclude the Virginia projects that are still under construction (Fredericksburg Extension) or review (495 Northern Extension) that are part of the sale. Depending on the size of Transurban's stake in those roads that could nudge the ROI up or down.

Nevertheless, $2.3 billion looks pretty good especially since rush hour is still a nightmare and the biggest of the three tollways, the $2.1 billion I-495 Luxury Lane in Northern Virginia, has lost a total of $419.5 million since opening in 2012. (The investors likely used an accounting formula weighted by earnings, costs, and the remaining lives of the concessions to come up with a fair price.)

One more point:
The Sydney Morning Herald reports the sale includes Transurban's interests in the Beltway Capital Accord. The BCA refers to the first phase of the American Legion Bridge/I-495/I-270 tollway expansion.

That's interesting because,
as noted above, MDOT does not plan to publicly name a preferred contractor until next year. The question is how could anyone sell a stake before MDOT announces who has a stake to sell? 

Facts and Figures: Private vs. Public Funding on Key NoVA Tollways



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