The Public-Private Partnership (P3) Program
Governor Larry Hogan announced his I-495 & I-270 P3 Program over three years ago. This review outlines the project’s current direction and includes a chronology of key activities as a reference for tracking future events.
We all have a lot on our minds these days. And it's hard to follow every twist and turn of the State's I-270 plans. Do we know yet what will happen to 270 and when? No, but MDOT is moving forward with this convoluted, ever-changing process. It’s important to keep our eye on the ball. Dontwiden270.org will keep you informed of happenings throughout the coming year and tell you how you can help prevent this project from irreparably harming our communities.
The Beginning
Sept. 21, 2017: Governor Hogan announced a public-private partnership (P3) that would add toll lanes to the existing general purpose lanes on I-495 and I-270. Private companies would design, build, and operate the new lanes and collect toll revenues through a 50-year contract with the State.
June 6, 2019: The Maryland Board of Public Works (BPW) designated Hogan’s plan eligible for P3 status, allowing his administration to move forward with soliciting and evaluating private investment. Seven months later, the BPW amended the P3 to use a phased approach, termed “progressive P3 approach.”
Progressive P3 Approach
The entire P3 consists of more than 70 miles and encompasses all of I-270 and I-495 in Maryland, as well as the American Legion Bridge (ALB). The “progressive P3 approach” divided the P3 into phases. The BPW will review and approve each Phase Agreement separately.
As per the map below, the 37 miles of Phase 1 will be broken into smaller sections. Section 1 South will be further divided into two segments: A and B, both of which will be included in the first Section Agreement. Each Section Agreement will be reviewed and approved separately by the BPW.
Phase 1
Phase 1 of the P3 program includes I-495 from the George Washington (GW) Parkway in Virginia, across and including the ALB to I-270, and I-270 from I-495 to I-70 in Frederick.
Section 1 South will begin first. Segment A (the ALB and I-495 from the GW Parkway in Virginia to the I-270 west spur) will start before segment B (I-270 to I-370).
Section 1 North has been delayed and will undergo a separate environmental study.
Working with the Maryland Department of Transportation (MDOT) and the Maryland Transportation Authority (MDTA), a Phase Developer will plan and design each section of Phase 1 sequentially. If they find that a section is sufficiently profitable, they will design that section and submit a proposal to the State. When the BPW has approved a section proposal, the Section Developer will sign a contract and begin construction.
As of this writing, a Phase Developer is currently being selected. On July 24, 2020, MDOT had sent a Draft Request for Proposal (RFP) for review to four proposers they considered eligible to be the Phase 1 Developer. Then, based on discussion with the bidders, MDOT issued the final 1,100 page RFP on Dec. 18, 2020 with technical proposals due just five days after issuance. However, the bidders had previously reviewed and commented on draft versions. Three of the four teams submitted proposals in response to the final RFP.
What’s Ahead?
Timeline
At the Dec. 17, 2020 MDTA Board Meeting, MDOT presented the latest timeline for the Phase 1 program. The slide presentation can be found here; the timeline shown below is on slide 29. Some projected dates will undoubtedly change.
There is no schedule yet for Phase 1 North (I-270 from I-370 to Frederick) or for Phase 2 (the proposed expansion of the Capital Beltway).
NEPA and the Environmental Impact Statement (EIS)
The National Environmental Policy Act (NEPA) requires federal agencies to assess the environmental effects of proposed projects. The law requires consideration of a range of project alternatives and documentation of their potential impacts.
July 10, 2020: MDOT released an 18,000 page draft environmental impact statement (DEIS) for Phase 1 South and the Beltway.
July 10, 2020 - Nov 9, 2020: Three thousand written public comments on the DEIS were submitted to MDOT.
Fall, 2021: MDOT expects to release a final environmental impact statement (FEIS) for I-270 south of I-370 and the Beltway from the ALB to Branch Ave.
Toll Rates
All of the five build alternatives include “dynamic” tolling. That means the tolls will vary and prices will be adjusted in response to travel speed and traffic density. This is a form of monetizing congestion (i.e., making revenue from it) also known as Dynamic Pricing or Congestion Pricing. In a P3 project, the revenues go to private companies, not taxpayers.
Maryland law says that tolls cannot exceed a cap, which must be set by a public vote of the MDTA after public hearings.
The Maryland Transit Opportunities Coalition reported that MDOT has secretly guaranteed high tolls to Transurban, the Australian company that wants to add toll lanes to the ALB. The existence of a letter that makes this commitment -- but not the letter's text -- is revealed in the RFP for the first phase of the toll lanes. The RFP says that it will owe Transurban millions of dollars if the MDTA doesn't rubber-stamp the toll cap promised to Transurban in MDOT's secret letter.
Spring 2021: A toll rate proposal will be submitted to the MDTA Board.
Spring – summer 2021: MDTA to hold open public hearings on the toll range proposal.
Summer, 2021: Approval by MDTA of toll cap/range of tolls after public hearing.
Recent Events
MDOT Releases RFP for Phase I Developer
MDOT publically released the RFP for a Phase 1 Developer on Dec. 23, 2020. The RFP is 1,100 pages including instructions, a proposed agreement, and technical exhibits.
Many organizations and public officials have protested that the RFP is premature because MDOT has not reviewed public comments on the DEIS and selected which alternative they want to go forward. Moreover, in a footnote of the Phase P3 Agreement, the RFP states that the Phase Developer will receive up to $50 million to reimburse their predevelopment costs if the toll lane plan is not approved through the NEPA process.
Director of I-495 & I-270 P3 Office Resigns
Lisa Choplin, Director of the MDOT State Highway Transportation’s I-495 & I-270 P3 Office, retired from state government on Dec. 31, 2020. Ms. Choplin had taken over the State Highway Administration design-build program in 1999. She became director of the I-495 & I-270 P3 Office at its inception in 2017.
There was no information provided about why she suddenly resigned in the middle of the project. Her LinkedIn page states simply that she has retired and gives no indication that she is seeking a new job.
MDOT Secretary Greg Slater was quoted as saying, “I’m going to sit down with the team and create some new and different ways that we can try and engage with the community.” Whether MDOT becomes more transparent with its P3 activities remains to be seen.
Three Bids Submitted to RFP for Phase 1 Developer
On Jan. 8, 2021, MDOT announced receipt of three proposals in response to the RFP for Phase 1 Developer for the I-495 & I-270 P3 project. One of the four consortia of private sector teams that MDOT had considered qualified to compete chose not to submit a proposal. A second consortium, headed by Transurban, dropped its lead construction contractor from its team and did not replace it with another construction company.
MDOT expects to announce the selected Phase Developer in February and then seek BPW approval to enter into agreement for Phase 1 predevelopment design work as early as March. Contracts to finalize the design and to finance and build individual sections will be submitted to the BPW in 2022 following a final EIS and an official Record of Decision.
For additional recent and archived news, refer to the Dontwiden270.org website tab “Media Archives.”