Image from Virginia HOT lanes.

Beware of Australians bearing gifts, at least if those gifts are massive highway widening projects.

Whether by negligence or malice, the Northern Virginia Beltway HOT Lanes project has become an increasingly expensive boondoggle. Fluor-Transurban, the private company working on the project, originally promised to build HOT lanes construction for “free” to the state, with overhead costs paid for by the company and recouped through congestion-priced tolls. With Northern Virginians desperate for road expansion and the rest of Virginia hoarding Fairfax County’s tax dollars, a mere lending of public land in return for the good graces of benevolent corporate efficiency seemed like an unbeatable harnessing of the free market.

Proposed for $1.1 billion as a creative way to use free market demand to expand road capacity at no taxpayer expense, the result has been a $1.9 billion heavily subsidized profit hog, taxing citizens up front, on the back end through penalties, and regressively through user fees. While cost re-estimates should have been alarming, what should have come as even more shocking was the heavy demand for taxpayer money. Virginia provided $409 million in direct grant funding, along with $1.7 $1.17 billion in federally subsidized loans and bonds. The few media stories on the project focused on the relative novelty of how pricey the tolls the new “private” road would be, when the more substantive story was that it had almost ceased to be a privately-funded road at all. 

A major argument in favor of a public-private partnership is risk. A private entity assumes the loan and bond repayment risk, and this takes the burden of repayment off the public. But the glossy advertisements on virginiahotlanes.com don’t account for the risk involved in dismantling NOVA’s transportation spine. The risk is not so much if the private contractor drowns, but that if he drowns he takes us with him.

If the contractor goes broke, the central community artery will be in shambles. This creates the worst of scenarios, in which the state and citizenry assume great mobility risk and ultimately financial risk if the contractor defaults. With the road ripped to bits, taxpayers will be forced to finish the job or be paralyzed.  In this sense, the criticism is similar to the argument against student loan giant Sallie Mae, in that Sallie Mae makes loans and the federal government is obligated to pick up defaulted student loans. Just as the private entity in that partnership does not assume adequate risk; neither does the private entity in the case of the Beltway HOT lanes.

Next: The contractual block against carpooling.

Steve Kattula is an architecture graduate student at Virginia Tech in Old Town Alexandria, and lives and works in Fairfax City.