In a dramatic blow to the state's transportation plan for metro Atlanta, the Georgia Department of Transportation on Wednesday pulled the plug on its most significant project, a historic $1 billion effort to add optional toll lanes alongside I-75 and I-575 in Cobb and Cherokee counties with private investment.
Board member Brandon Beach said the department would look at other methods for building the project besides private funding. But a spokesman for Gov. Nathan Deal would not confirm that the project as currently drawn should ever be built, saying only that “congestion in the corridor" remained a top priority.
"We just have to be sure to do it in a way that protects taxpayers," said the spokesman, Brian Robinson. More than 200,000 people a day drive that corridor, which is one of the region's most congested. Even with private funding, a public subsidy of up to $300 million would have been required.
The abrupt decision raised questions about the viability of DOT's program to draw private financing into public toll roads, a key initiative in the state since 2003, and to spread optional toll lanes along every major highway in the metro area.
The network of toll lanes became DOT's only plan for major congestion relief along metro Atlanta's interstates after officials realized it was unlikely there would ever be enough money to sufficiently widen the highways traditionally. "We don't have a massive freeway expansion program," Todd Long, the state's transportation planning director, said of the network, before the announcement. "This is it."
Beach insisted the I-75 project was still in the works and the program would go forward.
"We think it’s a good project," said Beach, who chairs the DOT committee that oversees toll roads, "but we think there are some questions that have been brought up and we need to re-examine and refocus." He stressed, for example, that the department would continue to seek private investment in the passenger terminal it is developing downtown as a real estate project. In addition, the DOT is continuing work on an optional toll lane along I-75 in Henry and Clayton counties with state money.
The state has been trying to build some variant of the I-75/I-575 project since at least 2005, and has spent more than $54 million on it so far. The latest version of the project was already out to bid, with three teams of international road builders likely spending millions of dollars to put together proposals, due Feb. 17. It was to be the state’s maiden venture into private financing for public toll roads.
The project would have built two reversible toll lanes alongside I-75 from I-285 to I-575, and one reversible toll lane each along I-75 up to Hickory Grove Road and along I-575 up to Sixes Road. The toll price was to rise and fall with congestion in the main lanes in order to keep the toll lane free-flowing. Unlike the HOT lane on I-85, it was to be financed and built by private companies trying to make a profit. They would lease the road and be repaid by toll revenues.
"Holy smokes," said Bob Poole, a founder of the Reason Foundation credited with inventing the idea of optional toll lanes. "That’s a big setback and very unfortunate for congestion relief in Atlanta."
It represents at least the second time Georgia has canceled and restarted the project, after a variant to add eight lanes was found to be too expensive.
"I’m mystified by why they would do that at this point," Poole said, noting that it would cement Georgia's "checkered history" into an unfortunate reputation.
"They obviously had three world-class qualified teams that were willing to do a lot of work to come up with financeable proposals. ... It’s hard to see that happening easily again," Poole said. "This kind of an action will create an impression that Georgia’s a place with political risk."
Problems in Georgia's public-private road program have arisen with projects such as this one and one on Ga. 400 when a plan developed after months or years of intense work at DOT arrived on the desk of a governor, who took a different view.
"It’s been five, six, seven years that Georgia’s been every year, here’s Georgia, a big newcomer state that might be a big market," Poole said. "It never seems to materialize."
Deal had raised concerns about the I-75/I-575 project following reporting by The Atlanta Journal-Constitution. Primary control of the project rests with DOT, but Deal heads the state agencies that control part of its financing. Both DOT and the governor agreed it was DOT's decision.
In September, Deal delayed putting the project out to bid by a couple of days over questions about whether the contract would prevent government from building roads in the corridor. But he approved it in the end, and it went out to bid.
Then last month, the AJC reported that traffic predictions showed the project was expected to make commutes slightly worse for some drivers, and would not provide major congestion relief for most in the main lanes -- although it would dramatically help those who chose to pay the toll.
DOT responded that the goal of the project was not to ease traffic for all drivers, but to provide an option for all drivers in times of need. Should they choose the toll lane, a state study showed, their commutes would be more than twice as fast.
Beach said that in addition to the news stories, there were concerns about the $300 million public subsidy that could be required for the project -- which the bidders said should be higher, perhaps $450 million. The project may qualify for federal loans.
"There gets a point where if you’re going to do that much public participation, you may want to look at doing the project yourself," Beach said. But where that cash would come from was not clear. "That’s what we’re going to look at in the next few months," Beach said, though he said he did not currently have any ideas.
The whole project is estimated to cost about $1 billion. Toll revenues could pay part of the cost of building it, but not all. That cost would far exceed DOT's entire statewide annual road-widening budget. If the state did attempt to front the investment to be repaid by tolls, there's no telling how much traffic and toll revenue would materialize, Poole noted. That financial risk "would be entirely on the state’s back," he said.
Residents of the area were absorbing the news.
"I would hope that the project is not completely dead because I think the project does have merit," said Cobb County homeowner activist Ron Sifen.
Others were glad to see it go, saying there hadn't been enough publicity about the project, although DOT has held public meetings.
"That was a lot of the problem with the toll lanes in Gwinnett," said Brett Bittner, vice president of the Cobb Taxpayers Association. "The people who would be affected by it in this area haven't been given the full explanation of what would happen. Overall the idea is a good one, but the implementation has been poor."
The three bidding teams did not respond to requests for comment.
Staff writer Janel Davis contributed to this article.
Story so far
2003: State law first allows private investment in public toll roads. The legislation is rewritten, then later replaced.
2005: The Georgia Department of Transportation signs its first partnership to develop toll lanes along I-75 and I-575. The original plan is to add eight lanes, but the estimates skyrocket from about $2 billion to $4 billion.
2009: DOT abandons partnership on the project, scales it back.
September 2011: The latest I-75/I-575 project -- with 29 miles of reversible toll lanes on I-75 and I-575 -- goes out to bid. The $1 billion project is the largest transportation contract in state history. Tolls and private investors would pay the majority of the cost, but the project also is expected to require a public subsidy of up to $300 million.
Oct. 1, 2011: An HOV lane on 16 miles of I-85 in Gwinnett and DeKalb counties becomes a toll lane, leading to an outcry from drivers facing longer wait times in the regular lanes.
Dec. 14, 2011: The state DOT pulls the plug on the current project but says it will look at other ways to build it.
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