VDOT releases 460 review

Published 10:53 pm Friday, June 27, 2014

Though statutory disclosure requirements were met, the public was in the dark on key aspects of the new Route 460, including the full extent of the risks.

That’s one finding in an internal state report the Virginia Department of Transportation released Friday on how the limited access highway project from Suffolk to Petersburg has been handled.

Disclosure requirements required by state law may have been met, but “we do not believe that key stakeholders, including the public, were aware of the nature and extent of risks,” the report says.

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The review was conducted by its assurance and compliance office and, at the request of Transportation Secretary Aubrey Layne, the state Inspector General’s Office, according to VDOT.

Layne earlier this year froze payments to private partner U.S. 460 Mobility Partners after $300 million was spent on the $1.4 billion project without the necessary U.S. Army Corps of Engineers environmental permits having been obtained.

Layne estimated the total cost could tip $500 million, without any construction to show for it.

Another key finding by the review team: A decade-long discussion between VDOT and the Corps over which of two alternatives would be the best location for the road “seems unusual to us, particularly since no resolution as to an accepted route was reached.”

The report states that project expenditures “appear reasonable,” and do not appear to have been for right-of-way acquisitions or construction work on any alignment that may not be approved.

But the comprehensive agreement lacked definitions for some work undertaken by Mobility Partners, which could give rise to disputes. The report also describes an “inherent risk” that the vendor could inflate the value of certain work performed to maximize revenue early on.

Development of the project “did not materially depart” from existing VDOT design-build procurement processes, the report continues, and Commonwealth Transportation Board members were “provided all statutorily required disclosures,” but not with “effective communication and/or notice of key events.”

The review found that the agreement with Mobility Partners contained “provisions such as performance bonds, guarantees and warranties” intended to protect taxpayers from being left on the hook, along with the capacity for the commonwealth “to terminate the contract for convenience.”

Project invoices generally complied with agreement provisions and payment controls, the report says.

The review team was asked to calculate a risk score for the project, arriving at 805, with 1,000 being the highest possible risk.

For comparison, widening Interstate 66 from Gainesville to Haymarket scored 360.

The report criticizes the administration of former Gov. Bob McDonnell for pushing to close the project and keeping the negotiation process confidential.

Among many recommendations is a 30-day cooling off period, within which contracts under the Public-Private Transportation Act could be terminated without penalty.

VDOT is preparing an updated environmental study of five design alternatives for the road and expects to announce a preferred option by the end of 2014.