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Governor Terry McAuliffe has announced that his administration has reached an agreement with U.S. 460 Mobility Partners, contracted to execute the Route 460 project in southeastern Virginia (USA), to get US$46 million back to taxpayers.
Under the terms of the agreement, US 460 Mobility Partners will return US$46 million in already-spent funds back to taxpayers and cancel an additional US$103 million claim which the company had filed under the contract. The total US$149 million swing is the result of months of negotiations between the McAuliffe administration and the company.
The contract was awarded in late 2012 under the previous administration to Ferrovial and American Infrastructure, US 460 Mobility Partners, to design and build a new 55-mile limited access highway that would parallel the existing Route 460 from Suffolk to Petersburg.
Later in January 2013, US 460 Mobility Partners achieved commercial and financial close of the US$1.393 billion contract. Finally in mid April 2014 McAuliffe's administration, through the Virginia Department of Transportation (VDOT), issued a notice to terminate its contract with US 460 Mobility Partners.
Governor McAuliffe stated:
"This settlement will bring millions in taxpayer dollars that were wasted on the U.S. Route 460 project back to taxpayers and prevent the Commonwealth from having to pay millions more. While this is a positive development, the fact remains that Virginians have already spent hundreds of millions of dollars on a project that will never be built because state officials negotiated a contract that left the Commonwealth holding the bag when the environmental risks were too great to move forward. I regret that that contract did not allow for greater steps to mitigate the impact of this failed project, but I am proud of the bipartisan reforms we worked with leaders like Delegate Chris Jones to make to prevent disasters like this from occurring in the future."
Governor McAuliffe announced the settlement at a ceremonial bill signing for new bipartisan legislation that reforms Virginia's approach to PPP transportation projects in the wake of the failed U.S. Route 460 project. House Bill 1886 reforms how Virginia finances transportation projects under the Public-Private Transportation Act, or P3 program.
House Bill 1886 requires three key characteristics: