GDOT picks team to build I-285 toll lanes in record-setting bid

Toll lanes are coming to the top of I-285 under a record-setting public-private partnership between the Georgia Department of Transportation and the international consortium picked to build and maintain the express lanes.

The design and construction price tag alone is projected to run $8.9 billion, costs that will be paid by the Top End Mobility Group in exchange for 50 years of toll revenue from the roughly 20-mile project. Sweetening the deal is an offer by the group to pay Georgia a $23.6 billion concession fee and reimburse the state for $515 million in project costs to date.

The State Transportation Board approved the choice Thursday, moving forward phase 1 of a project that, in the short term, will mean years of construction disruptions for drivers but that in the long term will give drivers an option to avoid some of the Perimeter loop’s ever-present congestion and create a path for bus rapid transit routes along the corridor.

Emphasis on the long term: A child born this year will be old enough to get their driver’s license the same year the final phase of construction on the full 34 miles of toll lanes is expected to wrap up, in 2042. The first phase, two toll lanes along the outer rim, isn’t scheduled to open until 2034.

Still, it marks a major step toward fulfilling GDOT’s ultimate goal of a system of connected express lanes throughout metro Atlanta. These top-end toll lanes on the eastern rim of I-285 will join express lanes under construction on Ga. 400 and those already in place along I-85, I-75 and I-575. After that, the western top of I-285 will get the same toll lane treatment.

“We’ve got quite the journey ahead of us, but it’s going to be worth it,” Transportation Commissioner Russell McMurry said in an interview with The Atlanta Journal-Constitution.

The planned express lanes are in addition to the existing lanes, which will remain free for drivers who don’t want to pay tolls. Those tolls are currently capped at a maximum of about $2 per mile.

Record payment to state

The I-285 concession dwarfs the one paid in the Ga. 400 project, which previously set a record with a $4 billion payment to the state. The group behind that project, Peach Partners, was one of three finalists for the I-285 work but was ultimately not selected.

For the companies behind the Top End Mobility Group, this is the second major road project they’ve been awarded in recent months.

That group, which includes Spain-based Ferrovial and its subsidiary, Cintra Global, was also awarded a 26-mile toll project along I-24 in Tennessee in August, after offering a $24.8 billion concession.

Ferrovial’s bid in the Tennessee project has come under scrutiny by investors after it offered roughly $17 billion more in concession fees than competitors. There have been questions about the timeline of the concession payments and the company’s ability to take on an additional large project like I-285.

Officials from Top End Mobility Group declined to be interviewed Thursday. In a call with investors last week, Ignacio Fernandez, Ferrovial’s CEO and executive director, said the company can fund both projects with cash from its current operations and “to a lesser degree with additional corporate debt.”

The difference between Ferrovial’s concession in Georgia and concessions offered by the second- and third-place bidders, if any, is not known. GDOT spokesperson Natalie Dale said information can’t be shared until after the project’s contract has been finalized, which is expected in December.

Meg Pirkle, GDOT’s chief engineer, said Top End Mobility Group won the highest marks on both technical and financial grounds, earning 1,944 points out of a possible 2,500.

Georgia’s concession will be paid in six equal annual installments beginning after the financial close. The $515 million reimbursement will be paid at financial close.

Years of construction — then relief?

Construction is expected to start in 2028 and will be done in stages.

The first phase will add two lanes to the outer ring of the eastern top of I-285, about 20 miles in all. Phase 2 is a rough mirror of that, and will add two lanes to the inner ring.

Then, the plan is to take the express lanes down to the I-20 east interchange.

The contract guarantees only the phase 1 work to the Top End Mobility Group, but GDOT has the option to award future phases to the company without putting the project out for bid again. That decision would be made in the next couple of years, once the project is underway.

Public-private partnerships have become an increasingly popular way to build major infrastructure projects. GDOT first turned to the model for the Ga. 400 project after initial bids far exceeded the state’s budget.

In the case of I-285, private investment made the toll project possible, said Jannine Miller, the State Road & Tollway Authority’s executive director.

“We wouldn’t be able to do this,” she said in an interview with the AJC.

Doing nothing isn’t a responsible option on an interstate with some of the worst congestion in the country, McMurry said. Traffic on I-285 moves below 55 mph for eight hours of the day currently.

“So much for a rush hour,” he said. “It’s a rush day.”

Traffic volume is expected to grow by 25% over the next 15 years.

GDOT retains oversight of the project, and the contract will set limits on the toll rates the Top End Mobility Group can charge. Right now, that cap is set at $2.06 per mile, which is more than the highest rate the state has ever charged on the toll lanes it manages at $1.50.