Implementing public private partnerships during challenging economic times: Case study of the 495 Express Lanes on the Virginia portion of the Washington Capital Beltway Project (USA)

Abstract

• 495 Express Lanes concession agreement signed December 2007 on eve of the 2008 Economic Crisis and completed on schedule and within budget. • Budget of US$2 billion secured through combination of private equity, TIFIA loan, private activity bonds, and state contribution. • Project employed over 31,000 workers and generated US$8.5 billion (est.) for metro Washington, DC economy. • 495 Express Lanes opened to traffic November 17, 2012. • Average volume of traffic for three months ending June 2013 was 35,000 vehicles – 40% of original projections. • Virginia second in the world behind the UK in the value of P3 projects closed by a government jurisdiction in 2012. This case study examines the implementation of the 495 Express Lanes – a major public–private partnership (P3) project in the Commonwealth of Virginia outside of Washington, DC. The project was approved by the Virginia legislature in December 2007 and construction was begun in the shadow of the 2008 Economic Crisis. This paper examines the enactment of P3 legislation in Virginia; the role that it played in the design, financing, and construction of this highway project under harsh economic conditions; and its impact on the evolution of P3 policy in the United States.