Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

On Saturday November 10, the California Department of Transportation (“Caltrans”) and Los Angeles County Metropolitan Transportation Authority (“MTA”) converted the I-110 Harbor Transitway lanes (“ExpressLanes”) from High Occupancy Vehicle (“HOV”) or carpool lanes to High Occupancy Toll (“HOT”) lanes.  The ExpressLanes, extending from Harbor Gateway Transit Center to Adams Boulevard, are part of a one-year demonstration program that seeks to introduce congestion pricing to the I-110 freeway, and later the I-10 freeway.  This conversion follows a growing trend in California, as well as many other states such as Virginia, North Carolina, Texas, Florida and Colorado, in implementing HOT lanes to alleviate high congestion corridors.

The ExpressLanes are equipped with 14 entry and exit points to the general purpose lanes, allowing single-occupancy drivers to access carpool lanes by paying a toll that fluctuates based on current traffic levels.  Each driver intending to utilize the new HOT lanes must purchase a transponder that will charge tolls electronically. 

With expected tolls between $0.25 and $1.40 per mile, aggregate gross revenues from the I-110 and later I-10 are projected at approximately $20 million per year.  Per its application to the US Department of Transportation for its grant to develop through the Congestion-Reduction Demonstration Initiatives Program, MTA proposes to use excess toll revenues to subsidize transit service as an alternative to drive alone transportation. 

The demonstration program comes 18 years after Geoff Yarema, Nossaman LLP partner and former Infrastructure Practice Group Chair, proposed essentially this same innovation for the I-110 in a 1994 article entitled “Trying Out Congestion Pricing in Los Angeles: A Low-Risk Proposal for the Harbor Freeway Transitway.”  Citing authority from sources such as the Environmental Defense Fund, the Union of Concerned Scientists and the National Science Foundation, Mr. Yarema touted the benefits of pricing roadway capacity according to demand, drawing parallels with pricing models for electrical and telephone services.  This conversion will be the first example of roadway pricing in the County of Los Angeles.

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The Arizona Legislature sent to Gov. Jan Brewer on April 4, 2012 the landmark bill HB 2491, creating state-of-the-art toll collection and enforcement authority for the Arizona Department of Transportation (ADOT).

The bill follows on the heels of the state’s enactment of its public-private partnership (P3) law two years ago.  While that law authorizes tolling, it lacked the enforcement mechanisms needed for effective open road electronic tolling, essential to modern toll road financing and operations. 

HB 2491 includes a three-notice system, increasing charges for delayed payment, an administrative hearing process, and a panoply of means to enforce collection, including license suspension and denial, vehicle registration denial, and towing and impoundment.

The P3 law included the right of toll road users to obtain refunds of fuel taxes on fuel consumed using tolled facilities.  This unusual and administratively impractical provision, backed by the trucking industry, was repealed by HB 2491.  In exchange, the trucking industry accepted a provision limiting the toll enforcement law to new transportation facilities, which could include new tolled lanes.

Arizona does not yet have tolled transportation facilities.  ADOT is considering a potential P3 for a tolled bypass facility at the Nogales border crossing, and the Maricopa Association of Governments is actively studying a managed lanes system for the Phoenix metropolitan area, which could include conversion of HOV lanes to HOT lanes.

Nossaman assisted ADOT in drafting the legislation.

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On March 30, 2012, the North Carolina Department of Transportation (NCDOT)  shortlisted four teams for its I-77 HOT Lanes Project located in the Charlotte-Mecklenberg area.

The I-77 HOT Lanes Project is the first road transportation infrastructure project under a pubic-private partnership (P3) delivery model in North Carolina and will set the precedent for the use of P3s to implement HOT lanes projects in the state.  NCDOT anticipates that partnership with the private sector, and the innovative funding strategies that private sector funding brings, will more quickly and more efficiently bring this project to completion and introduce new approaches to managing a traffic corridor in a region of the state that has seen tremendous growth and with it heavy commuter congestion.  NCDOT invites the contemporary dynamic tolling technology within the HOT lanes approach, which it anticipates will improve corridor safety and reduce what has been an elevated number of secondary crashes during peak hour congestion.

The project consists of three sections: Central Section, South Section, and North Section.   The project will involve the conversion of existing high occupancy vehicle (HOV) lanes to high-occupancy toll ("HOT") lanes, and the addition of HOT lanes along the I-77 corridor.  The chosen team will develop, design, build, finance, operate, and maintain the Project through a toll concession agreement.

The shortlisted teams are:

• The Charlotte Access Mobility Group (ACS Infrastructure Development, Inc. and InfraRed Capital Partners Limited), partnering with Dragados U.S.A., Inc. and United Infrastructures Group, Inc., as the joint-venture builder with Florence & Hutcheson, Inc. as the designer.
• Cintra Infraestructuras, S.A., partnering with Ferrovial Agroman, S.A. and W.C. English, Inc., as the joint-venture builder with the Louis Berger Group, Inc. as the designer.
• Metrolina Development Partners (OHL Concessiones, S.A.), partnering with the Lane Construction Corporation and Obrascón Huarte Lain, S.A., as the joint-venture builder with HDR Engineering, Inc. as the designer.
• Char-Meck Development Partners (Vinci Concessions, S.A.S.), partnering with Archer Western Constructors, L.L.C. and Blythe Construction, Inc., as the joint-venture builder with Parsons Transportation Group as the designer.

The anticipated procurement schedule is for issuance of the final request for proposals in the second quarter of 2012 with award and execution of the comprehensive P3 agreement by year’s end.

Simon Santiago co-authored this entry.

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On Feb. 15, 2012, the North Carolina Department of Transportation advertised a Request for Qualifications (RFQ) for the I-77 HOT Lanes Project located in the Charlotte-Mecklunberg area.  The RFQ seeks interested teams to submit their Statement of Qualifications to develop, design, build, finance, operate, and maintain HOT lanes along the I-77 corridor through a public-private partnership.  The project will involve the conversion of existing HOV lanes to HOT lanes, and the extension of HOT lanes along the I-77 corridor.

An industry forum is scheduled for Feb. 23, 2012 in Charlotte, N.C., and responses to the RFQ will be due March 15, 2012.  Information on the project and how to request a copy of the RFQ can be obtained here.

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