Tutor Perini Awarded $4b Capital Beltway Project

The hiring of Tutor Perini has given the stalled project new life.

Source : Unsplash

October 5, 2022

Author : Alex Bustillos

The Maryland Department of Transportation (MDOT) has chosen Los Angeles-based general contractor Tutor Perini to build and construct toll lanes along approximately 14 miles of I-495 and I-270 around the Washington, D.C. area. The state agency estimates that the first construction phase will cost $3.75 billion to $4.25 billion, with a total cost of $11 billion or higher.

Accelerate Maryland Partners (AM Partners) is in charge of the public-private partnership, which will run through Maryland and Virginia and is led by Transurban and Macquarie Capital. Transurban, based in Melbourne, Australia, owns and operates existing toll highways in Northern Virginia.

However, before breaking construction, AM Partners must secure a 50-year deal with Maryland DOT to fund, construct, and operate the lanes in exchange for most of the toll revenue. In August, the Federal Highway Administration (FHA) substantially boosted the project by approving its environmental study. That decision, along with the hiring of Tutor Perini, has given the stalled project new life, but obstacles remain.

The only way the state can afford to give meaningful traffic relief, according to Maryland Governor Larry Hogan (R), is to add privately financed toll lanes for cars who wish to purchase their way out of congestion. In the meantime, opponents argue that extending the roadways would be detrimental to the environment and mass transit and that the tolls would be too expensive for many vehicles.

Tanya Sheres, a Transurban spokesperson, said the company's team, Accelerate Maryland Partners, is negotiating a timeline for submitting its contract proposal with MDOT.

Tens of millions of dollars could be at stake for both parties. According to a 2021 predevelopment agreement, if the Board of Public Works rejects a proposed contract, the state must reimburse the Transurban team for up to $50 million in planning expenditures. The Transurban team will be forced to bear those expenditures if the two parties cannot agree on a 50-year arrangement to apply for approval.

The Transurban team's absence of a lead construction contractor has been at the core of a bid appeal filed by Cintra. This Spanish construction business lost out on the predevelopment deal to Transurban. The protest, which is still pending in court, claims that the Transurban team's absence of a construction partner violates the project's bid guidelines. MDOT has dismissed the charges, and Transurban has defended MDOT's procurement procedure.

Transurban's team said the Tutor Perini team will "drive value and efficiencies in the project's design, price, and delivery."

In a statement, Tutor Perini CEO Ronald Tutor said the company has a "good record of reaching or exceeding project participation goals for disadvantaged businesses."

Tutor Perini in some previous instances has overshot budgets. So when  asked about Tutor Perini's cost overruns and project delays, Sheres stated, "It is not unusual for a developer of large infrastructure projects to have managed through challenges on multi-year, multi-billion projects across shifting macroeconomic and political landscapes."

Under the toll lanes proposal, the commercial partnership would install two high-occupancy tolls (HOT) lanes in each direction on both roadways. The first leg would comprise I-270 south of I-370, the Beltway between the Virginia side of a new and broader American Legion Bridge, and the exit for Old Georgetown Road in Bethesda. One of the I-270 HOT lanes would be converted from a carpool lane. Regular lanes would be reconstructed but would stay open.

A subsidiary, Wisconsin-based Lunda Construction, and Connecticut-based O&G Industries are part of the Tutor Perini team. Transurban announced that Parsons Corp. of Centreville, Va., will oversee the team's design work.

Category : Investment in Infrastructure State Government Freeways and Highways

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