Industry Trend Analysis - I-66 To Determine Direction Of PPPs In Virginia - AUG 2017
BMI View: The I-66 improvement project will be critical in indicating whether Virginia remains a leader in the growing US PPP market. Major problems with a nu mber of marquee PPP projects have caused several state legislator s to question the benefits of the model, specifically in regards to the proposed I-66 project.
The continued use of PPPs in Virginia is coming under threat, as recent failures have caused state politicians to speak out against the model. Virginia has been a leader among US states for two decades, after passing initial PPP legislation in 1995. However, recently the state has suffered setbacks in the planning and operation of PPPs as well as public opposition to the model. The backlash over the failed Route 460 project in particular led state lawmakers to introduce new legislation aiming to increase oversight and transparency in the PPP process. However, these new mandates may put the efficacy of the Virginia PPP system at risk, as regulations bog down the procurement process.
The I-66 corridor improvement project, the first PPP to move forward under the new regulations, will be critical in indicating the direction Virginia will take regarding the use of the model in the future. The Transportation Secretary, Aubrey Lane, has stated that Virginia would be better served if control of the I-66 project remained with the public sector. On the other side of the debate, a number of state legislators have voiced their support for the PPP model. As a result, the private sector option has remained on the table for the I-66 project, with the VDOT Commissioner, Charles Kilpatrick, likely to sign a Finding of Public Interest for a P3. Currently the Commonwealth Transportation Board is continuing to develop the public-sector financing option, while at the same time considering information provided by private sector teams. The state's newly formed Public-Private Advisory Committee will make the ultimate determination of whether the project is suitable for the PPP model, and is set to announce their conclusion in December, with approval from Secretary Lane also required.