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Heating up the highway

The most technologically advanced highway in the world is taking shape in Washington DC. Mark Hansford reports from the Capital Beltway.

Something pioneering is happening in Washington DC; something bold; something brave; something never seen anywhere before. And it’s not Barack Obama. This is a road - a 20km section of America’s version of the M25 to be precise - and it’s the second most congested highway in the US.

This road, the Capital Beltway. is being widened - nothing unusual there - but with extra technology never used before. The four lanes being added will be tolled - again nothing new - but with systems in place that will see the toll charged varying in real-time to ensure average speeds never drop and that journey times can be guaranteed.

“There is a huge level of international interest, and that’s only going to heighten. They’re all coming to look at what we’re doing”

Ken Daley, Transurban


Tolls are expected to range from as low as 10 cents a mile in light traffic conditions to around a $1 a mile in some high-demand sections of the Beltway at peak times. The average trip cost is estimated to be between $5 and $6. If you have three or more people in your car - or bus - then you pay nothing at all.

The new lanes are called High Occupancy Toll (Hot) Lanes. Seven US states already use them - California, Colorado, Florida, Minnesota, Texas, Utah and Washington - but not on this scale and with this level of technology. The team in Washington DC thinks they are going to be big.

“This is a landmark P3 [or public private partnership]. It’s a $1.9bn (£1.23bn) project and the first involving Hot Lanes,” enthuses Ken Daley, international development president for Australian concessionaire Transurban.


Adding the new lanes is challenging. “We’re building 20km of interurban highway, with 58 bridges, alongside a road that takes up to 200,000 vehicles a day,” explains Daley. “On each carriageway we have to push four general purpose lanes over to let the two Hot Lanes down the middle.”

The project is now halfway through construction, but the Virginia Department of Transportation (VxDOT) originally started looking at the route in the early 1990s.

North Virginia is a rapidly growing employment centre, with the local economy driven by the Beltway and by Dulles International Airport. With that come some major transportation challenges. VxDOT had proposed a very traditional highway expansion by adding anything up to 10 lanes. But that would have meant knocking down more than 300 homes along with the brand new HQ of a large multi-national company - an unpalatable prospect.
Transurban and its partner Fluor saw a better way, and put in an unsolicited proposal to use Hot Lanes. The Transurban way means adding four lanes - not 10 - and as a result taking just eight homes on compulsory purchase.

Virginia, like 25 other US states, has legislation in place to allow the use of private finance in infrastructure projects. As in the other states this legislation, permits unsolicited proposals from potential investors who can see a way to make money from widening roads.

Enabling legislation

“VxDOT has legislation in place, so it wasn’t completely out of left-field. We were simply saying you can’t build your way out of congestion,” says Daley. “The project appealed to VxDOT. It was the right time; Fluor had the credibility; and VxDOT had the right people. In those people we had a strong advocate.”
In accordance with Virginia law Transurban’s unsolicited proposal was put out to tender, but no other bids were received. Financial close happened in 2007 for the 80-year concession - five years of construction followed by a 75-year operating term.

“You need community support, bi-party support, and it must be solving a real problem - so many projects just don’t do that”

Ken Daley, Transurban


VxDOT is also bought into the project financially. The current cost estimate is £1.23bn, with the Commonwealth of Virginia contributing £265M alongside £226M in private equity from Transurban and Fluor in private equity and £778M in loans and bonds.

“It was very difficult and we worked very hard to make it stack up. People looked at it and thought: ‘there’s an easier way to go’.” Easier yes, but far, far more disruptive. “It is a 20km long construction project but it does enjoy enormous support. It is a very good indication that we do outreach work. You need community support, bi-party support, and it must be solving a real problem - so many projects don’t do that,” Daley says.

“Citizens here prioritise transport. Washingtonians rate transport concerns over the economy, security and healthcare because they see so many of those things depend on transport. It affects quality of life, and fundamentally, their house prices!”

Unpopular PPPs

But Washingtonians are still Americans, and public private partnerships are not universally popular in the US. Controversial projects in Chicago and Indiana saw to that, where two states desperate for a short-term cash injection in their roads are paying a high long-term price to a concession company which is making big profits from tolls.

This project is different. “Look at the partnership agreement,” says Daley. “This is a revenue sharing agreement and there is a high level of transparency. Key business terms were put out to consultation. We have long-term performance requirements. We’ve got to maintain this highway in terms of maintaining average speeds and physical maintenance over the long-term. VxDOT has got a long-term operator here, because we run toll roads for a living.

Technology keeps things on the move

The Capital Beltway Hot lanes will use the latest technology to monitor and manage the number of vehicles entering the lanes and the timing of their entry.

It will also vary tolls according to the traffic conditions as a way of managing traffic flow.

More than 80 traffic sensors along the roadway will continuously monitor traffic levels. Toll prices will be dynamic, adjusted, continuously based on real-time traffic volumes, to keep the lanes free-flowing, even during peak travel times. A network of 76 variable message signs will inform drivers of toll rates as they approach the Hot Lanes so they can make informed decisions on whether to enter them.

The Hot Lanes will feature electronic gantries at nine points along their length to detect vehicle entry and exit points, and measure total trip distances, via radio frequency identification technology.

Fully electronic tolling means that motorists will not have to stop at toll booths. Instead they will receive a bill. This allows more than four times the number of vehicles per hour to use the Hot Lanes system than would be possible if toll booths were used.

To ensure the speed and accuracy of tolling and traffic management, all vehicles travelling on the Hot Lanes will be required to have an E-ZPass in-car transponder.

For carpools, toll gantries will have the ability to distinguish between high occupancy vehicles (HOVs) and toll-paying customers. Plans are underway to provide a new transponder to offer travellers a convenient way to switch between HOV and toll-paying modes.

Up to 84 closed-circuit and automatic incident-detection cameras will detect incidents and tell the Hot Operations Center operators to notify incident-response crews assigned to the Hot Lanes. The automatic incident-detection cameras alert operators within 30 seconds of an incident.

“We’re an investor-operator,” explains Daley. “We bring a different set of views. We’re not feeding a construction company, and we’re not being fed by a construction company.

“While the construction phase is a great challenge, it is a five-year challenge. We’re focused on the operations phase - the 75 years after construction. That’s the real challenge; that’s where we bring value and skills. And as a result we’ve got a lot more focus on that phase. This is not a project - it’s a service.

Clearly, Daley and his people still have more than an eye on the construction phase. They need to as revenue streams will only kick in when the Hot Lanes come into operation.

“As we sit here today there is not a single claim against the concessionaire. The issues list can fit on a single piece of paper”

Ken Daley, Transurban

Work includes the £174M cost of replacing ageing infrastructure including 58 bridges and overpasses. Every Beltway interchange bridge and overpass is being demolished and rebuilt to accommodate the wider road. In addition, the project includes the construction of the dedicated Hot Lanes slip roads to provide convenient access to major employment and retail destinations.

Construction is expected to be completed in late 2012 and so far work is going well.

“We are 43% through in a cost sense,” Daley says, “and as we sit here today there’s not a claim against the concessionaire. The issues list fits on a single piece of paper.”

The reason, Daley says, is the focus. “What we have to do as concessionaire is establish a common vision.

The risks of it not happening on time are so large that we adopt a, ‘just get it done’ philosophy. All the parties have a financial incentive to make the project a success.”

Inside the Beltway

Interstate 495 (I-495) is a 103km long highway that surrounds Washington DC and its suburbs in the states of Maryland and Virginia.

More widely known as the Capital Beltway, its name lends itself to the phrase “inside the Beltway”, which refers to issues involving the workings of the US government and politics. Interstate 95 uses
the southern and eastern half of the Capital Beltway to circumnavigate Washington DC and is cosigned with I-495 along that route. The Capital Beltway Hot Lanes will run around the south western corner of the Beltway, from the Dulles airport access road to the intersection with the I-395.

For Daley, even during construction the public comes first. “It’s a five-year project and in that time it’s all about maintaining confidence and building trust that [after five years of disruption] the benefit is going to be there.”

Contractor innovation

This trust is already being repaid when it comes to getting the job done quicker. A classic example is the support Transurban received from VxDOT and the public when it proposed an alternative demolition and reconstruction method for one of the larger overpasses on the route. Its contractor wanted to cut the time to replace the Route 123 bridge from six weeks to 36 hours - but needed a complete closure of the intersection to do so. The new construction method was approved.

“It was the contractor’s idea that we saw had benefits, and we have the relationship with the stakeholders to sell it to them,” says Daley.

Right now, this is the second longest commute in the US. That’s going to change. Daley is certainly confident that the scheme is a winner.

“We’ve been to see governors in two other states on the back of this project. There is a tremendous level of international interest, and that’s only going to heighten as we get closer to reality. They’re all coming here to look at what we’re doing,” he says. “It’s going to be the benchmark.”

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