FAQs

• a new two-lane tunnel under the Elizabeth River parallel to the existing Midtown Tunnel;
• maintenance and safety improvements to the existing Midtown Tunnel;
• modifications to the interchange at Brambleton Avenue/Hampton Boulevard in Norfolk;
• maintenance and safety improvements to the existing Downtown Tunnel;
• And, extending the MLK from London Boulevard to Interstate 264 (I-264), with an interchange at High Street.

The Project brings a number of direct benefits to the citizens, communities and businesses of the Hampton Roads region including:

• Increased capacity and reduced congestion;
• Improved reliability and reduced travel times;
• Reduced auto emissions;
• Additional evacuation capacity in the event of an emergency; and,
• The project will create hundreds of jobs and spur much needed economic development.

The Downtown Tunnel, Midtown Tunnel, MLK Extension Project is central to addressing the region's transportation needs. The Project has been at the top of the region's priorities for many years, but due to funding constraints, the Commonwealth has not been able to undertake or fully fund and support the initiative. The Project has received all the necessary environmental permits and ERC is ready to move forward with its construction.

ERC's lead firms, Skanska Infrastructure Development and Macquarie Group, are two of the most experienced PPP developers and infrastructure investors and operators in the world. Each is a leader in infrastructure design, creation and management and both have existing operations in Virginia. As a result of their vast experience, ERC members are at the leading edge of infrastructure technology and would bring that technology as well as bring unrivalled design and construction expertise to the Project. ERC's financial strength and global PPP experience, combined with technical expertise and operational excellence, make it the ideal partner to bring VDOT's vision to life.

In its simplest form a PPP is a performance-based contractual arrangement between a government agency and a private sector entity. The skills and assets of each sector are shared to deliver a benefit to the public.

The Commonwealth of Virginia will sign an agreement with ERC in which ERC will build and operate the project in exchange for toll revenue over the life of the contract. The Commonwealth will always own and have oversight of the assets, and remain in control of the toll rate.

In May 2008 in accordance with its Public-Private Transportation Act of 1995, VDOT initiated a procurement process for the Project. It is a multi-layer public process that involves extensive reviews by multiple parties, including the public, an Independent Review Panel and the Commonwealth Transportation Board. ERC has achieved financial and technical endorsement and is currently in negotiations with VDOT.

A detailed concession agreement/contract will give the Commonwealth clear powers and responsibilities of public oversight including setting the toll rate setting performance standards for ERC. The contract will requirements to ensure that the road is developed in accordance with all state and federal safety standards and that it is well maintained throughout the term of the contract. In the event of non-performance, the state can take the project back from the private sector. Further, ownership is not transferred and stays with the state.

VDOT will continue to own the Project "infrastructure" (i.e. roadways, extensions, tunnels), all of the right of way, and will have complete oversight of ERC. As part of the process, VDOT will decide upon strict guidelines that must be met by ERC throughout the life of the contract.

Public private partnerships have been used successfully all over the world to procure needed infrastructure, including schools, hospitals, roads and bridges. In the US more than half of the states currently utilize PPPs for infrastructure. Virginia has a strong and successful track record with using PPP contracts for state and local infrastructure projects.

Funding constraints have prevented this project from being traditionally procured. Those constraints remain and, unfortunately, this project will not be possible without a PPP.

There are a number of benefits of PPPs including:

• Expedited completion compared to conventional project delivery methods, which in turn, reduces project costs;
• Transfer of construction and management risk to the private sector partner;
• Guaranteed fixed price and cost of operations over the life of the contract;
• Improved quality and system performance from the use of innovative materials and management techniques; and,
• Access to new sources of private capital.

The Commonwealth will retain ownership and enter into a detailed concession agreement (contract) with ERC. The contract will outline rights and responsibilities of each party including detailed performance measures and requirements. Because the Project requires a large amount of funding, loans to secure that capital must be extended over a long-term period to keep the toll range affordable. It is anticipated that the concession will last for 58 years, during which VDOT has ultimate control of services provided and the toll rate.

In its September 2008 Conceptual Proposal, ERC envisaged a toll range of $2.00 to $3.00 ($2008) without any upfront public contribution. Since then, a number of development activities have been conducted with input from VDOT which have allowed a reduction of the required off-peak toll to $2.17 ($2012) and a peak toll of $2.89 ($2012)². ERC further believes that the Project can be financed without an upfront public contribution, using only private capital raised from investors, capital markets and/or banks. This presentation to the Commonwealth Transportation Board details initial toll rates and timing.

²Toll represents off-peak toll for users of the Downtown and Midtown Tunnels. Toll does not include video surcharge applied to non-transponder us.

The toll rate will be set by VDOT at a level sufficient to raise the necessary revenue to fully fund the project and cover costs. If costs increase, the toll rate will need to increase with it.

ERC is committed to keeping costs as low as possible and has already made progress (see above). For more on how ERC is working toward an affordable toll rate, read the Feasibility Summary.

Making the Project smaller or phasing it would significantly reduce the benefits provided. Most of the benefits stem from a operating the Downtown tunnel, the Midtown tunnel and the MLK Extension as a single inter-connected system to enhance mobility.

Likewise, increasing project scope will significantly alter the affordability of the project and require higher toll rates.

Tolls will be collected with overhead electronic gantries instead of toll booths to allow for free-flow of traffic. Vehicles may pass through the toll point at the posted speeds with no need to slow down, stop or find correct change. Each vehicle is identified either by E-ZPass or the license plate, and a wide variety of options for payment will be offered.

E-ZPass is a toll payment system whereby a transponder is mounted inside a car and when passing through a toll gantry, fees are electronically collected. It is used on virtually all toll facilities in the East and Midwest, including other roads in Virginia, West Virginia, Maryland, Delaware, Pennsylvania, New Jersey, New York, New Hampshire, Maine, Massachusetts, Indiana and Illinois.

Virginia residents can create an E-ZPass account at VDOT's website: https://www.ezpassva.com/CreateAccount/CreateAccountHome.aspx

The website also includes links for residents of other states.

The electronic system will capture your license plate data and an invoice for the toll due will be mailed to you. Payment options will include in person at an office, via mail and over the internet. ERC anticipates setting up accounts for frequent users who do not wish to obtain an E-ZPass in order to simplify billing and payment.

Yes, as established in Virginia Code 46.2819.1 and 46.2819.3

Tolls will be collected at each end of Midtown and Downtown tunnels and on the new MLK Extension that will be constructed with this project. Existing portions of the MLK in Portsmouth will not be tolled.

Yes. Alternate routes include the Military Highway and I-64. Riders on public transportation, such as buses and the ferry service will not be charged a toll.

In the event of a hurricane, or other emergency events, tolls will be waived at the direction of VDOT in accordance with state law.

Construction will take 3-4 years once a final agreement is reached with the Commonwealth.

For commuters, there will be little impact during construction because construction will be isolated from current travel lanes, and improvements to existing tunnels will be made at night.

Impacts to the Elizabeth River will be minimal, and all impacts will be mitigated in accordance with strict state and federal law. Plum Point Park will be maintained throughout construction, as will the Elizabeth River Trail. Since we anticipate receiving the bulk of our equipment by barge, the impact of truck traffic on Hampton Boulevard, which is already limited by City regulations, will be minimal. Current plans call for minor changes to the Norfolk approach, and virtually no impact on the Portsmouth approach. Further during pre-construction, operations and throughout its responsibility for the facilities, ERC will be working closely with VDOT and local governments to minimize any impact to local streets.

ERC takes environmental concerns very seriously. The project will follow strict regulations for the Environmental Protection Agency and the Commonwealth of Virginia and will be developed under ISO 14001 environmentally sustainable business standards. Additionally, Skanska will employ its rigorous Environmental Management System; which helped it be named the #1 Green Contractor in the US by the leading construction magazine Engineering News-Record.

Further, reduced congestion will reduce auto emissions and should help improve regional air quality.

There will not be any impact, including Mount Calvary and Potter's Field.

ERC recognizes that on-going operations and maintenance of the Project requires continuous use of local employees. There is a wealth of experience with current employees that ERC would be happy to build on.

Information about the project and ERC can be obtained at www.erc-info.com and www.midtowntunnel.org

Interested subcontractors can email southeast.procurement@skanska.com or call the Skanska Virginia Beach office at 757-420-4140.