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Expansion of I-270 and I-495 is proposed to be a Private-Public Partnership

EconWatch (11/03/20)

By Samantha Rodriguez

Governor Larry Hogan’s controversial highway expansion plan, which includes adding four toll lanes to Interstate Highways 270 and 495, is proposed by a Private-Public Partnership.

The project spans more than 70 miles––from south of George Washington Memorial Parkway on I-495 in Virginia, to west of Maryland’s Exit 5 on I-495, and north into Frederick County on I-270. First proposed by Hogan in September of 2017, the project has three phases that represent distinct sections of the interstate highways.

The current cost estimate for the entire project is $11 billion, with $484 million and $1 billion subsidized by taxpayers. The original proposal included no direct taxpayer subsidy.

Furthermore, this price tag does not consider the cost for sewer and pipe relocation, which the Washington Suburban Sanitary Commission (WSSC) estimated to be $2 billion. This translates to an estimated 277 percent increase in water bills per household. Bill increases are equivalent to an approximate $2,200 per year for a family of three in Montgomery and Prince George’s counties.

The expected $11 billion cost would be funded by a private company through a Public-Private Partnership (P3), a system in which private funds are used in exchange for toll revenues.

However, P3s often fail to provide these purported savings to taxpayers, as similar partnerships often fail. One example is the Purple Line, a new Metro spanning 16 miles, connecting Bethesda with New Carrollton. Currently, construction of the Purple Line is stalled and will not be completed without significant taxpayer funding because the private partner has backed out.

Furthermore, P3 system requires toll lanes to make a profit, which would create a tiered system on the highway that unfairly excludes and discriminates against poorer citizens. For example, the toll lanes on the Virginia portion of the Beltway are also a P3 program. Run by Transurban, the lanes often cost $30-$40 during rush hour, which is not only expensive, but also discriminatory against the lower class.

Four companies are competing to be the private partner of the I-270 and I-495 expansion. The Maryland Board of Public Works (BPW) is scheduled to announce the winning company for Phase 1 in May 2021. Transurban is projected to win as they built the toll lanes on the Virginia portion of the Beltway. Additionally, Hogan’s former Chief of Intergovernmental Relations now works for the company.

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