4.2.2  Synthesis of Real Toll Crossing Experience

There have only been two real toll crossing projects in the U.S.:

  Teodoro Moscoso Bridge in San Juan, Puerto Rico

  Elizabeth River Tunnels (Downtown Tunnel/Midtown Tunnel/Martin Luther King (MLK) Expressway Extension) in Portsmouth and Norfolk, Virginia

With just two projects in this cohort of real toll P3 projects, it is difficult to draw conclusions on trends for crossing projects. The Teodoro Moscoso Bridge was the first P3 project to open in the U.S. and is financially stable. The bridge was completed in a timely fashion and with its relatively low construction costs and higher toll rates it earns a good return for the private partner and provides opportunities for profit sharing with the sponsor. Even so, the concession period was extended by 17 years in 2010 to help the concession company recoup losses experienced earlier in the term. The Teodoro Moscoso Bridge project is unique in that the Puerto Rico Highways & Transportation Authority (PRHTA) used its own bonding capacity to raise the necessary funding for the project and then passed the repayment obligation on to the private partner.

The Elizabeth River Tunnels project opened in stages in 2016, with only the rehabilitation of the existing Midtown Tunnel remaining to complete in 2018. The project illustrates the public acceptance risks associated with tolling-especially the introduction of tolls on existing facilities that were not tolled. In this case, the opposition included a lawsuit and anti-P3 legislation introduced by state legislators. The Commonwealth Transportation Board helped to mitigate the project's significant public acceptance risk by providing an additional $100 million in public funding in order to delay the implementation of tolling on the existing Elizabeth River tunnel crossing.

With a cost of nearly $2.1 billion, the Elizabeth River Tunnels project also provides evidence of the severe challenges of financing a project of this scale without a meaningful public sector subsidy. In this case, public sector funding has attracted a much larger investment of at-risk private sector capital and credit. Traffic risk in the case of the Elizabeth River Tunnels is mitigated to some extent by the fact that historic traffic levels are well documented in each of the crossing corridors. Although the project involves the construction of a new tunnel, it adds needed capacity in a heavily traveled existing corridor. In this way, the risk levels associated with the Elizabeth River Tunnels project are similar to those of a brownfield project.