Politically Motivated Environmental Permit Delays Put Public Private Partnerships at Risk

A quintessentially American policy drama is playing out in Northern Viriginia as politically motivated delays threaten to scuttle a multibillion project everyone recognizes is essential to improving the efficiency of the regional transportation network. The project is the $2 billion I-95/I-395 High Occupancy (HOT) Toll Lane intiative that will add three lanes to the current roadway. The HOT Lanes are being built and managed by two of the world’s leading experts and most experienced developers of tollroads: Fluor and Transurban.

The problem is that the project has been delayed, first by a lawsuit from Arlington, Virginia that, bowing to NIMBY pressure, who didn’t want the new road capacity. The second problem is the re-alignment is triggering revisions to the environmental review. The delays are making the private partners throw up their hands in dismay. According to the Washington Examiner (June 7, 2011):

“Long-simmering impatience over HOT lanes for a Virginia highway is boiling over. “The chief executive of the Australian company Transurban, one of two contractors charged with adding the high-occupancy toll lanes along Interstate 95, told an Australian newspaper Monday that his company would pull out if state officials took more than a year to complete an environmental review.

“We’ve been negotiating and we’re ready to move, but the [approval] process is largely out of our hands,” Transurban CEO Chris Lynch told the Australian newspaper. “If this continues for another 12 months or more, there come’s a point where I think we’d be ready to walk away.”

The project has already been delayed 18 months after Arlington County sued over an environmental study. The state eventually moved the project out of Arlington. The revised project would add HOT lanes along I-95 from Garrisonville Road in Stafford County to Edsall Road in Fairfax.

Back in 2008, the National Surface Transportation Polcy and Revenue Study Commission estimated that transportation infrastructure projects took an average of 13 years to go from “first thought” to completed project. The environmental review process increased delay from 2.2 years in the 1970s, to 4.4 years in the 1980s, to 5.0 years in the 1990s on average. A review of 250 highway projects between 1995 and 2001 found that the average delay was 5.1 years while the median delay was 4.7 years. A review of 37 transit projects between 1992 and 2002 found the average delay was 4.3 years and the median was 3.8 years.

In other words, environmental review alone can account for nearly 40 percent of the delay in implementing transportation projects. The costs of these delays range into the billions of dollars since each delay requires higher debt levels to cover current spending that can not be matched with revenues.