DOT changes course on I-75/I-575 toll proposal

By Ariel Hart

The Atlanta Journal-Constitution

The state Department of Transportation is ditching its only active privately-funded toll road partnership, according to state and county officials.  That completes a 0-for-5 record for proposals in the program so far -- or, DOT officials say, lays the groundwork for its rebirth.

The concept for the project, to build toll lanes along Interstates 75 and 575 in Cobb and Cherokee counties, is still very much alive, officials said Monday. The project will be announced this week as one of the highest-priority plans to get under way with a new set of rules.

But DOT will drop its exclusive relationship with the companies that first proposed it under laws passed in 2003 and 2005.  Those companies, a consortium led by builders Bechtel Infrastructure Corp. and Peter Kiewit Sons’, Inc., will have to bid on the project against other companies.  Such competition will bring the state its only chance of closing a funding gap for the project, DOT assistant treasurer Earl Mahfuz said.  To build out the entire $16 billion metro-wide system of optional toll lanes planned by the department, the state would need to fill a $7 billion funding gap, according to preliminary estimates.

Officials with the I-75/I-575 consortium countered that the project in hand would have been the best one.

“I think we worked hand in hand with the state in trying to develop the best affordable project, and I think we accomplished that,” said Jim Dell, a vice president for development at Bechtel.

The state has lurched from one strategy to another in its six-year odyssey through planning toll roads with private investment funds, trying and dropping ideas like tolling all lanes of an existing road, or building truck-only toll lanes.

A 2003 law, for which contractors lobbied, left the power to propose projects in the hands of the companies, not the state.  In 2005, the law was changed to allow the state to propose projects, too.  But DOT officials  wearied of unsolicited proposals, and in 2007 the DOT board voted to ban them.  Projects that stalled or died along the way included corridors on Ga. 400, I-285, Ga. 316 and I-20.

This year, a law that broadly reorganized the state's transportation governance wiped out the old public-private toll road law completely, and started anew.

The state came to the conclusion that the new law meant that unsolicited projects had to go, but that's beside the point, said David Doss, who chairs the DOT board’s committee on public-private projects.  “There may be a legal decision there, but the main premise is it’s a business decision, on how to get the best value for the state,” he said.

The original proposal for I-75/I-575 was more expansive and would have cost $1.8 billion, but the companies only risked $5 million of their own money.  Mahfuz said when the state issues a new detailed proposal later this year, it will expect more "skin in the game," perhaps even inviting companies to propose leasing the road for 40 to 50 years, to be paid back by tolls.

Doss  strongly criticized previous Georgia decisions to change course on projects, saying it cost Georgia enormous credibility within the contractor and finance industry.  Monday, he said that would not be the case with I-75/I-575 since DOT had made so much demonstrable progress recently.

The scaled-down I-75/I-575 project would add two or three reversible lanes along the existing highway; costing about $400 million. Motorists willing to pay a toll could enter them to avoid congestion.  Toll prices would rise and fall with congestion.