- Briefing Room
Greater Richmond, Virginia
|Project Sponsor / Borrower||
Virginia Department of Transportation (VDOT)
Pocahontas Parkway Association
The Pocahontas Parkway (Route 895) is an 8.8-mile tolled highway seven miles south of Richmond, Virginia. The four-lane road connects Chippenham Parkway at I-95 in Chesterfield County with Interstate 295 south of the Richmond International Airport in Henrico County. Construction began in fall 1998, and the Parkway was opened to traffic in stages beginning in May 2002. The facility includes a high-level bridge over the James River and an interchange at Laburnum Avenue.
The Parkway was constructed using funds generated by bonds issued by the Pocahontas Parkway Association (PPA) in 1998 under Virginia's Public Private Transportation Act of 1995. The PPA was established for the sole purpose of financing the construction of the Parkway. The Parkway's total development costs were funded through tax-exempt revenue bonds ($354 million) issued by PPA, a State Infrastructure Bank loan ($18 million) and Federal funding for roadway design ($9 million).
After 18 months of negotiation between VDOT and Transurban (USA), a private Australian toll road operator with subsidiaries in the U.S., Transurban executed an Asset Purchase Agreement with the Pocahontas Parkway Association, a 63-20 nonprofit corporation, and entered into the Amended and Restated Comprehensive Agreement (ARCA) with VDOT on June 29, 2006.
Under the terms of those agreements, Transurban acquired the sole rights to enhance, manage, operate, maintain, and collect tolls on the Parkway for a period of 99 years. Transurban also defeased all of PPA's underlying debt and was obligated to construct the Richmond Airport Connector (RAC), a 1.58-mile, four-lane extension of the toll road to Richmond International Airport. The size of the TIFIA loan was determined through a cost-benefit analysis that showed that $150 million for construction and refinancing was the minimum amount required to incentivize Transurban to assume the risk of constructing a much needed airport connector roadway that is not economically feasible otherwise.
$597.4 million (eligible project costs including refinancing, construction of the RAC and installation of an electronic tolling system)
Long-term lease (2006)
|Project Delivery / Contract Method||
Original construction - 63-20 Design-build
Long-term lease (2006) - Lease-develop-operate
Transurban USA (long-term lease holder - until May 2014)
DBi Services - operator and maintainer (as of May 2014)
Macquarie Capital- 50-percent shareholder (as of August 2015)
|Project Advisors / Consultants||
Original design-build consultant - Joint venture of Fluor Enterprise and Morrison Knudsen (now URS)
Long-term lease (2006)
To USDOT TIFIA JPO
|Duration / Status||
Opened in September 2002; Richmond Airport Connector reached substantial completion in January 2011.
Transurban transferred its interest to the senior lenders in May, 2014.
|TIFIA Credit Agreement||
Direct Loan - $150 million; sold to senior lenders concurrent with Transurban transfer of assets in May 2014.
|Financial Status / Financial Performance||
TIFIA loan agreement was signed on July 18, 2007.
The TIFIA funds refinanced approximately $95 million of the long-term senior bank debt, and paid for the $7 million needed to upgrade the electronic tolling systems and approximately $48 million toward the construction of the Richmond airport connector. The TIFIA Credit Program sold its interest in the project to Texas Pacific Group and Citibank for approximately $60 million.
|Related Links / Articles||SEP-15 Application|
John W. Lawson