As Hogan’s Highway-Widening Plan Changes, $9 Billion Price Tag Does Not

When Gov. Lawrence J. Hogan Jr. (R) unveiled his plan to widen three interstate highways in September 2017, he and then-Transportation Secretary Pete K. Rahn boasted that it would be the largest public-private partnership in North America.

The surprise project would be “absolutely transformative” for traffic-weary commuters and would cost $9 billion to $11 billion, he said.

At the time, Hogan’s vision was to add four “Express Toll Lanes” — two in each direction — to portions of Interstate 270, the Capital Beltway (I-495) and the federally-owned Baltimore-Washington Parkway (MD 295).

The first in-person public hearing on a key planning document for the highway plan, the Draft Environmental Impact Statement (DEIS), will be held on Tuesday in Largo. It’s the fourth of six public comment sessions (the first three were virtual) that the State Highway Administration and the Federal Highway Administration have scheduled.

Hogan’s project has undergone significant changes in the nearly three years since he and Rahn announced it:

• The widening of a large portion of the Beltway in Montgomery County, from the I-270 spur east to the Prince George’s County line, has been relegated to what SHA euphemistically refers to as the second phase of Phase 1.

• The widening of the Beltway from the Prince George’s-Montgomery border south to MD 5 has been put off into the indefinite future.

• The widening of I-270 north of I-370 has been deferred.

• Hogan and his Virginia counterpart, Gov. Ralph S. Northam (D) announced, with great fanfare, the signing of the Capital Beltway Accord — an agreement to contract with a group of for-profit firms to rebuild and widen the American Legion Bridge, a notorious choke-point for commuters in the Washington, D.C., suburbs.

• WSSC Water (the bicounty utility formerly known as the Washington Suburban Sanitary Commission) announced that the cost of moving large pipes that run along the Beltway would run between $1 billion and $2 billion.

• From all outward appearances, the Baltimore-Washington Parkway has quietly slipped out of the plan. Although a Maryland Department of Transportation spokeswoman, Erin Henson, insisted last week that the governor’s proposal is “still pending with ongoing discussions,” there is no indication that the U.S. Department of Interior wants to part with the road. The DEIS makes little mention of it.

Despite all the changes to the project over the 35 months that have elapsed since Hogan’s announcement, one thing has remained remarkably constant: the price.

The draft EIS, a massive 18,000-page document that itself has been the subject of controversy, includes just half a page on what the addition of Express Toll Lanes to portions of I-495 and I-270 will cost.

Of the six design alternatives under active consideration, two are said to be the most popular within MDOT — those known as Alternative 9 and Alternative 10.

Alt. 9 would cost $8.7 billion to $9.6 billion, according to the DEIS. Alt. 10 would cost $9 billion to $10 billion.

Critics of the highway-widening plan find the remarkable consistency in price difficult to swallow.

Montgomery County Council Vice President Tom Hucker (D) said “it’s not possible” that a project could undergo so many changes but retain its Day 1 pricing.

“I don’t know serious people that have any confidence in MDOT’s cost estimates,” he said in an interview. “You simply can’t add a bridge and utility relocation costs, subtract Maryland 295, and say ‘oh, it all costs the same as we thought in the first place.’ Nothing works that way.”

Del. Marc Korman (D-Montgomery) said the never-changing price undermines the credibility of the process.

“You could just do back-of-the-envelope math to compare the 70 miles of I-495 and I-270 to Virginia, and you would have seen that that should have cost around $15.5 billion,” he said. The $9 billion to $11 billion initial cost “was always sort of an arbitrary figure from Secretary Rahn.”

Montgomery County Planning Board Chairman Casey Anderson said “the range of possibilities” in the environmental report “highlight just how uncertain this kind of prediction can be.”

“To be charitable, forecasting the cost of a project of this scope, which is breathtaking, is an extremely difficult exercise,” he said. “And it’s probably a good idea for both opponents of the project and supporters of the project to be careful about making definitive claims concerning future costs.”

“Generally speaking, the numbers get worse, not better, over time,” Anderson added. “But in any event, it’s safe to say that the ability to predict with any kind of confidence… is just fraught with uncertainty — and people should not be taking any of that to the bank.”

In a statement, MDOT spokesman Terry Owens said planning-stage cost estimates “are often very stable throughout and contain a fair number of contingencies built in for unknowns.”

“As projects progress towards implementation, the design gets more detailed and cost estimates get refined,” he added. “Most changes in estimates happen in the later stages of design closer to any implementation, when all of the detailed project factors are completely known.”

Owens said the initial cost of the project included a replacement for the American Legion Bridge, which Hogan and Northam heralded as an historic breakthrough for Maryland and Virginia.

“The costs also include utility relocation costs,” Owens said, although MDOT has consistently resisted saying whether underground infrastructure belonging to utilities other than WSSC Water will need to be relocated.

In the brief discussion of cost (Appendix B of the DEIS, Page 148) is language that opponents found difficult to decipher.

According to the document, construction cost estimates were “adjusted” to “reflect assumed efficiencies in costs for major items such as asphalt pavement and structural materials.”

There is no further discussion of why — or by how much — costs were adjusted, or whether such adjustments are commonplace on large-scale projects.

“They made an estimate and it was too high, and they just arbitrarily changed it,” charged Ben Ross, head of the Maryland Transit Opportunities Coalition, last month. “They used their cost-estimating manual and then they changed the numbers.”

Cynicism deepened after the discovery of the online transcript of a conversation that Transurban Group CEO Scott Charlton had with a moderator during a call with industry analysts.

Transurban has an extensive network of Express Toll Lanes in Northern Virginia and will build Virginia’s half of the new American Legion Bridge, Northam announced last year.

The company is part of a consortium seeking the Maryland P3 contract — one of four recently deemed qualified to handle the project.

Asked how much capital the company would need for the first phase of the “Maryland Express Lanes,” Charlton said, “it’s too early to speculate.”

“I think the government has talked about in the order of about USD [U.S. dollars] 4 billion for that first phase,” he said. “That’s just a high level, I think, public number.”

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