In September 2017, Governor Larry Hogan proposed adding toll lanes to the Maryland side of the Capital Beltway and to I-270, which would be built and operated by private companies through a public-private-partnership (P3). The Maryland Board of Public Works (BPW) officially designated the project as a P3 in June 2019, allowing the Maryland Department of Transportation (MDOT) to move forward with the contract procurement process.
MDOT has begun the process by seeking proposals from the private sector to add four new toll lanes to lower I-270 and the American Legion Bridge (ALB). The Agency issued a Request for Qualifications (RFQ) for the P3, received Statement of Qualifications (SOQ) responses from four potential bidders, and on July 17, 2020, notified all four proposers that they are on the short list of qualified proposers. Requests for Proposals (RFPs) will only be accepted from vendors on MDOT’s shortlist.
You’ll find detailed information on each of the four finalists below. But here’s a preview: One of them is responsible for the outrageous tolls in Northern Virginia and has ties to Governor Hogan; another may be connected to the disastrous Purple Line and multiple highway bankruptcies in the U.S.
How It Works
MDOT will choose the contractor. The selected proposer will become the Phase 1 Developer and will be responsible for designing, building, financing, operating, and maintaining managed lanes for a series of sections that make up the entirety of Phase 1. Phase 1 includes the ALB to the I-270 western spur, and then up I-270 to I-370. MDOT plans to submit the P3 Agreement to the BPW in late spring or early summer 2021.
Action Item
Write Delegate Kumar Barve, Comptroller Peter Franchot, and MDOT Secretary Greg Slater and tell them there must be a delay in the I-495 & I-270 P3 toll lane project. The Managed Lanes decision will affect the region and the State of Maryland for decades. There is no need to complete the project within the previous timeframe since it is unclear what the long-term effects of the pandemic will be on the regional economy and commuting behavior.
MDOT needs to acknowledge the current covid-19 situation and examine whether the plan to widen I-495 and I-270 reflects future needs. After governments imposed community lockdowns to manage the spread of the virus, traffic levels on toll roads were reported to have fallen by 40% -80% in large metropolitan areas in North America. Fewer cars can lead to revenue shortfalls, a significant concern for the I-495 & I-270 P3 project.
Privatizing state highways can lead to the State’s inability to negotiate any changes should future situations affect the project design or other features of the contract. There must be public and legislative scrutiny of all I-495 & I-270 P3 agreements before the projects are awarded.
The Purple Line P3 Stalemate is a Warning about the I-495 & I-270 P3
The Purple Line P3 is at an impasse because of long-standing disagreements between the private sector and the State over significant delays and cost overruns on the project. Contractors have threatened to quit the project, leaving construction only partially completed. Delays and lawsuits could add years to the project and cost billions of dollars.
On June 22, 2020, the chairs of four transportation and appropriations committees and subcommittees of the Maryland House of Delegates sent a letter to Secretary Slater about the dispute between the State and contractors on the P3 Purple Line project. The letter said the Purple Line P3 situation should serve as a warning of what can happen when critical details and agreements are not worked out.
Furthermore, the Delegates expressed concern that the I-495 and I-270 P3 procurement process is being pushed forward too fast. The letter listed specific information that MDOT needs to obtain from the firms, including a detailed history of the companies, their track record on big-ticket projects worldwide, and how they would handle disputes with the State or their contractors.
Procurement Process
An RFQ is a solicitation that invites bidders to submit a written statement of their interest and expertise for a competitive project. An RFQ issued on February 7, 2020 initiated the procurement process for the toll lane project.
An SOQ is a vendor’s response to the RFQ, outlining their expertise and qualifications and how well they can align their experience to the criteria outlined in the RFQ. MDOT selected all four teams of private companies that submitted SOQs as qualified to apply for the RFP.
An RFP is a document that solicits bids from potential contractors and provides details about the project. The RFP will request pertinent information such as prior experience, company processes, and team members. A draft RFP is scheduled to be released to the shortlisted proposers for discussion of technical and commercial aspects.
MDOT’s Short List of Proposers
The four teams of private companies consist of 19 private firms with experience in infrastructure, highways, transportation, engineering, investment and/or asset management. The majority are international firms with headquarters in Australia, Italy, Spain, Canada, France, or the U.K.; however, most have a global network of offices and projects in multiple countries. Many companies have tens of thousands of employees worldwide.
One of the applicants will be selected and win the contract. MDOT will reimburse the three unsuccessful proposers for their work applying for the RFP. The contracting process is already costing Maryland taxpayers tens of millions of dollars.
The consortia include project developers, equity members, contractors, and designers. The teams and their lead project developers are:
Accelerate Maryland Partners LLC
Lead project developer: Transurban (USA) Operations, Inc.
Transurban is an Australian-owned firm, founded in 1996 and headquartered in Melbourne, Australia. The company builds and operates toll roads and currently has an interest in 16 urban highways in Australia, the United States, and Canada, including a 50-mile network of managed lanes in Northern Virginia.
It is widely felt that Governor Hogan favors Transurban to receive the contract for the Maryland toll lanes. Transurban donated $25,000 to Governor Hogan’s inaugural committee and spent $162,000 on Maryland lobbyists in a 6 month period in 2019-2020. Governor Hogan even traveled to Australia in September 2019 and met with company leaders and toured a Transurban project.
Moreover, Amanda N. Allen, a former Hogan administration official left her state government position as Director of International Affairs in January to join Transurban. She is now Government and Community Affairs manager at Transurban North America, based in Tysons, Virginia. According to state records, she registered as a lobbyist within days of joining the company.
Accelerate Maryland Express Partners
Lead project developer: Itinera Infrastructure & Concessions
Itinera, affiliated with Gavio Group, was established in 1938. At the beginning of the 1960s, Itinera became part of the Gavio Group, which is currently one of the largest tolling concessionaires in the world, predominantly in Italy, Brazil, and the United Kingdom. The firm is also active in large-scale infrastructure transportation P3 projects in North America, providing design, construction, finance, and operation and maintenance. Today, Itinera is one of the world’s top infrastructure firms in terms of size and revenues. The Gavio Group is active world-wide with about 10,000 employees.
Capital Express Mobility Partners
Lead project developers: Cintra Global SE and Meridiam Capital Express
Cintra is a private sector transportation infrastructure company headquartered in Spain. It began in 1968 when Ferrovial, its parent company, entered the roadway sector with a toll road concession in Spain. Thirty years later, Cintra was established to develop and focus on international highway promotion. In 2004, the firm entered the U.S. market by establishing a U.S. headquarters in Austin, Texas. Cintra has developed and managed 918 miles of highways and other transportation infrastructure in four continents around the world, including 92 miles of managed highways and $10.1 billion investment in the United States.
Cintra Global has had problems with toll road contracts in the U.S. The firm arranged a 99-year deal to operate an eight-mile roadway linking Chicago arteries but sold the lease as fears of default escalated. Subsequently, in 2016, the company filed for bankruptcy after running up $1.6 billion in debts on a toll road in Texas. Cintra also sold its 75-year lease to run the Indiana Toll Road after declaring bankruptcy. A toll road project in North Carolina is currently past the deadline for completion.
Meridiam is a global investor and asset manager based in Paris, France specializing in developing, financing, and managing long-term public infrastructure projects. Founded in 2005, Meridiam invests in public infrastructure in Europe, North America and Africa. The company manages 6.2 billion Euro of assets and has invested in over 62 transport, building, and public services projects.
A firm with the name Meridiam leads the $2 billion P3 on Maryland’s light rail Purple Line, but an MDOT spokesperson would not confirm whether it is the same company. The Purple Line private consortium, of which Meridiam is a partner, has threatened to walk away from the partially built project in a dispute with MDOT about cost overruns.
Potomac Mobility Group
Lead project developer: ACS Infrastructure Group
ACS, Actividades de Construcción y Servicios, S.A., is a worldwide transportation developer in construction and services activities headquartered in Madrid, Spain. The company was founded in 1997 through the merger of OCP Construcciones, S.A. and Ginés Navarro Construcciones, S.A. As a result of numerous mergers and takeovers, the ACS Group has over 162,000 employees, a presence in over 50 countries and annual net sales in 2012 of approximately $50 billion. The ACS Group, ACS Infrastructure Development, Inc., is the North American subsidiary. Its current infrastructure portfolio includes 28 highway projects.
Update on I-495/I-270 Toll-Lane Plan
A July presentation to a local civic association described how Governor Hogan is forging ahead with the first part of his plan to add high-priced toll lanes to I-495 and I-270. The talk described new developments and ways that activism by our communities, organizations, and government officials can help pause or stop this costly and destructive plan.