Virginia Gov. Bob McDonnell announced final agreement has been reached on a $1.4 billion public-private partnership to finance, design, and build a new 55-mile section of U.S. Route 460 in the southeastern part of the commonwealth.

The agreement with Route 460 Partners, the nonprofit P3 entity headed by Spanish company Ferrovial Agroman, includes $243 million of tax-exempt bonds, $903 million from the Virginia Department of Transportation, and $250 million from the Virginia Port Authority. State officials remain hopeful that the U.S. Department of Transportation will grant the project $422 million of Transportation Infrastructure Finance and Innovation Act loans they applied for earlier this year.

Any TIFIA assistance the project receives will reduce the amount of public money needed for the project.

"VDOT will work with the Route 460 Funding Corporation of Virginia to lead this project and oversee the work performed by US 460 Mobility Partners during construction," said VDOT Commissioner Greg Whirley. "The private-sector team will design and build the project at a fixed cost by a fixed date and will take significant risks associated with delivering the project. The commonwealth will continue to involve the community and public, seeking their input and addressing their concerns throughout project development and construction."

There has been opposition to the project, which the commonwealth has been seeking to develop for nearly a decade. The Southern Environmental Law Center is concerned the project would destroy wetland habitats and be unnecessarily costly. Property owners in the project's path have also publicly voiced opposition.

Virginia is actively pursuing development of more than a dozen major P3s, and has attempted to position itself as a leader in innovative finance delivery.

When the road opens in 2018, tolls will begin at approximately seven cents per mile for cars and 21 cents per mile for trucks, VDOT said. This equates to $3.69 for cars and $11.72 for trucks for the entire 55 miles. The existing U.S. 460 will have no tolls. Design and right of way work is expected to begin in 2013, which will include public meetings. Construction is anticipated to start in 2014.

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