Home' Future Building: The Australian Infrastructure Review : Volume 5 Number 1 Contents 94 futurebuilding Volume 5 Number 1
We have a US$5 billion (A$5.71 billion) budget
in transportation, of which US$2.5 billion (A$2.85
billion) is for new construction and US$2.5 billion
(A$2.85 billion) is for maintenance of the current
system. Of the total US$5 billion, around US$3.8
billion (A$4.34 billion) is raised by the Commonwealth
of Virginia, and we depend on our federal partners
for US$1.2 billion (A$1.37 billion). The latter is the
most signi cant threat to our programme.
One of the impressive things about Australia is
that, regardless of party, it appears that there is the
political will for infrastructure investment. That is not
what I nd currently in the United States, particularly
at the federal level. With our budgetary issues and
our ideological issues, it seems that the need to invest
in infrastructure has taken a back seat.
Since 2008, the federal gas tax -- the tax raised per
gallon -- has not been suf cient. There have been general
fund appropriations that have been put in several times,
six to eight months at a time, which makes it very
dif cult to fund long-term construction projects.
Complicating this, Virginia is also lagging behind
the nation in economic vitality. In the United States,
we are the state most dependent on federal spending.
Our Department of Defense spending makes up
almost 40 per cent of Virginia's economy, and that
is particularly debilitating as we go through the
drawdown from the wars in Iraq and Afghanistan,
and the budget crisis.
Virginia is focused on changing its economy, and,
quite frankly, we have to. Transportation has to play a
big role in that, not only in how it supports industry
and the livelihood of our citizens, but also in the
sheer number of jobs that it generates.
The importance of P3s
Public Private Partnerships (P3s) have been a big part
of our economy. Virginia has been a leader in P3s
over the years, and our goal is to build a strategic
programme to attract private investment.
We have learnt signi cantly from the Australian
experience, and Australia is our most signi cant
investor in terms of foreign dollars.
Many of the large Australian rms have invested
not only in our country, but also in our state, and we
are very grateful to be able to share the experiences
that we have had with our Australian friends.
We realise, though, that the delivery of projects is
changing and that global competition is increasing, so
that's why we're focusing on revising and enhancing
our P3 transactions.
I'd like to talk about two P3 projects in particular --
not in terms of how they were delivered, but in terms
of the public policy discussion that surrounded them.
The rst is the I-95 Express Lanes project in
Northern Virginia. This project saw the introduction
in the Commonwealth of Virginia of the managed
lanes and dynamic pricing concept. This is a concept
in which tolling is used to deliver new capacity, but
if a motorist is driving and does not want to pay the
toll, they always have a free alternative.
The traf c ow on the managed lanes is
managed by pricing, and the partner (Transurban) is
encouraged, and mandated by contract to maintain a
certain ow of traf c.
As that traf c ow degrades, the pricing for the
road goes up. Our citizens have found this to be a
great bargain for their toll dollar, because they have
a free alternative should they choose not to use the
managed lanes, but if they want the ef ciency of
moving faster, they are able to do so.
This has been a revenue generation and a traf c
management model that you will see Virginia
continue to encourage as we go forward in delivering
The next project I'd like to highlight is the
Elizabeth River Tunnels project. This project is in
the Hampton Roads region, and those familiar with
Norfolk or Virginia Beach on the eastern seaboard
95 Express Lanes
will open for traf c
in late 2014.
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