DALLAS -- A $4 billion project to widen a Virginia interstate and add three lanes to an existing subsea highway tunnel beneath Hampton Roads may be financed as a public-private partnership, state officials told more than 300 investors and construction executives from at least nine nations eying bids on the project.
The Virginia Department sent out a request for information in mid-March to help it determine whether the project should be a conventional state project or a P3.
VDOT expects to issue a request for qualifications for partners in the fall if the P3 approach is selected, with a short list of partners determined by spring 2018. The tentative schedule calls for the awarding of a construction contract in spring 2019 with completion in 2024.
The project involves widening a 12-mile stretch of Interstate 64 between Hampton and Norfolk, and expanding the Hampton Roads Bridge-Tunnel from four lanes to seven. The work is expected to cost between $3.5 billion and $4 billion.
When the expansion is complete, four of the tunnel lanes will be free and three will be high occupancy tolled lanes. Tolls will be not be levied on vehicles with two or more occupants. The rate will vary based on time of day and traffic patterns.
The tunnel project has been on discussed for years but it now will go forward, state Transportation Secretary Aubrey Layne assured the crowd.
"We're not wasting your time, guys," Layne said at the information session on Monday. "This project is going to get built. We're taking some time to figure it out, but it's going to get done. We're not here talking about something that may or may not happen."
The Hampton Roads highway-tunnel project is one of the largest infrastructure projects on the horizon in the U.S. and has widespread support in the state, Layne said.
"This has been a long time coming, but our elected leaders came together and selected this," he said. "That's so important. I'd rather have an engineering issue than a political issue because I know an engineering issue will get solved. The political ones don't always get solved."
The state has the resources to build the tunnel project if the decision is for conventional delivery, said VDOT commissioner Charlie Kirkpatrick.
"We will be very deliberate and very methodical but we want to make clear that we do have the funding," he said.
The funding could include revenue bonds supported by a regional gasoline tax, junior lien bonds supported by toll revenue, a low-cost loan through federal Transportation Infrastructure Financing and Innovation Act, and money from the state.
VDOT chief engineer Garrett Moore said the state is looking for new ideas on how to build the highway-tunnel project.
"If someone has innovative ideas, we're ready to listen," he said. "We will consider innovation over marginal cost savings. This is going to be underwater for a long, long time, and we want to get it right in the long term."
The Hampton Roads Transportation Accountability Commission, which is responsible for funding projects in the eastern Virginia area, approved an $8.3 billion financing plan in October through 2040 that includes the tunnel expansion and eight other regional projects.
The long-range plan includes: $4.9 billion of senior-lien bonds supported by the region's dedicated state gasoline sales tax, $347 million of junior-lien bonds supported by toll revenues from the new tunnel lanes, and $3 billion of pay-as-you-go funding from the gasoline tax and state contributions.
The Hampton Roads Transportation Accountability Commission has legal authority from the state to issue tax-exempt revenue bonds supported by the regional gas tax, but has never done so.