State Proposes Spending $70M from Transportation Fund on P3

Tomorrow, Wednesday, April 18, the Board of Public Works considers granting an award of $68.5 million from the Transportation Trust Fund for the Maryland Department of Transportation (MDOT)’s Traffic Relief Plan, its massively-scaled public private partnership (P3). MDOT has selected a contractor team made up of Parsons, JMT, and HNTB to:

provide fully integrated support, guidance and oversight to the Maryland Department of Transportation State Highway Administration (MDOT SHA) Public-Private Partnership (P3) Office in delivering the I-495 and I-270 P3 “Traffic Relief Plan”.

Last September, Governor Hogan announced his Traffic Relief Plan to add four new lanes to I-270, the Capital Beltway (I-495), and the Baltimore-Washington Parkway (MD 295). The anticipated $9 billion plan for these three major state highways is touted to reduce congestion for millions of drivers.

At the time, MDOT indicated that it intended not to use the Transportation Trust Fund to pay for the ground-breaking public-private partnership (P3). In fact, the original Request for Information states:

The desire of MDOT would be that any private agreement not require a financial
contribution directly from the Maryland Transportation Trust Fund and that the
agreement would provide a concession payment to MDOT upon financial close.

However, the item on tomorrow’s Board agenda calls for 100 percent of the $68.5 million award to come from the Transportation Trust Fund. The Agenda Item suggests that the sum will, at some point, be paid back to the Trust Fund:

The scope of services will include developing and implementing a new and innovative P3 project delivery strategy driven by continuous market collaboration and feedback to ensure best value and that the I-495 and I-270 “Traffic Relief Plan” is delivered at a “net-zero” cost to the Transportation Trust Fund.

The winning team includes HNTB. Notably, MDOT Secretary Pete Rahn served as Senior Vice President of HNTB for five years before joining the Hogan Administration as Secretary of Transportation in 2015, according to The Daily Record (story behind firewall). According to that article, the Maryland State Ethics Commission has advised Secretary Rahn that no conflicts of interest exist with his active involvement in the P3 procurement and management.