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Virginia C apitol C onnections, Winter 2015 5
Developing Strategies
To have a viable workforce in the future, we are looking for
and must find the resources to attract people to public service and
motivate them to stay. Additionally, we must continue to focus on
giving employees the tools to improve their own health, which will
subsequently reduce health care costs for both the state employee and
the Commonwealth. These steps will go a long way to help alleviate
the financial and emotional stress that will in the long term sap
productivity and effectiveness of our state workforce.
The Commonwealth is fortunate to have an extremely altruistic
workforce. Men and women working in state government have given
back to their communities time and again. Despite these austere
times, our state employees in 2014 donated more than 2.5 million
dollars to charitable organizations through the Commonwealth of
Virginia Campaign (CVC) for workplace giving. Also, this does
not take into consideration the countless hours of volunteer service
that our state employees consistently provide in our communities
throughout the Commonwealth.
Through dedicated service to state government and to the
communities throughout Virginia, our state employees are vital to
helping to build the new Virginia economy. In my role as Secretary
of Administration, I am committed to helping to improve the health
and workplace for all state employees.
Continued from previous page
One of the most critical transportation
bills before the General Assembly this
session will reform the way projects
are delivered under the Public Private
Transportation Act (PPTA), also referred
to as the P3 program. The P3 program
allows the private sector to partner with
the state to finance and build projects such
as roads, bridges and other transportation
improvements.
This program is a valuable procurement
tool to finance and build certain
transportation projects that would otherwise not be completed.
But only when the deals are negotiated in a manner that protects
taxpayers’ interests.
Virginia is a national and global leader in partnering with the
private sector to deliver multi-billion-dollar transportation projects
under the P3 program. A good example is the recently opened I-95
Express Lanes in Northern Virginia. The state contributed more
than $70 million in return for a project valued at nearly $1 billion.
Transurban shared in the risk, bringing significant private capital to
the table with the expectation of making a reasonable return on its
investment through tolling. This is truly a risk and reward partnership
that made good business sense for the Commonwealth. The public’s
interests came first.
The P3 process works for the right projects, but it is not the
solution to deliver every project. It should not have been used to
procure the U.S. 460 project, which would have built 55 miles of
new highway parallel to the existing one in southeastern Virginia.
This project lacked the right balance of risk and reward. The private
sector was not willing to invest its capital or take significant risk
because the reward of making a return on investment was not there.
This project was forced through the P3 process, at a cost of $300
million, while the state assumed the financial risk should the project
not be permitted. The process lacked transparency and decisions were
being made without engaging important stakeholders, such as the
General Assembly. One of Governor Terry McAuliffe’s first actions
in office was to stop contract work on the project. With his approval,
I subsequently issued a work order last March to focus solely on
getting a permit.
In the Hampton Roads region, the P3 for building a second
Midtown Tunnel imposed tolls before any new capacity had been
built. Shortly after taking office, Governor McAuliffe urged the
Commonwealth Transportation Board to cut those tolls in half during
construction. With both this and the U.S. 460 project, accountability
was lacking and the public’s best interests were not protected.
The McAuliffe administration is committed to restoring public
confidence in the P3 program so it is used for the right projects such as
the 95 Express Lanes. Governor McAuliffe will introduce legislation,
Reforming the P3 program for the public good
By Aubrey Layne, Secretary of Transportation
patroned by Delegate Chris Jones, to reform the P3 process so good
business decisions are made on behalf of the taxpayers while still
encouraging and rewarding private investment.
The legislation will require the P3 program to minimize risk for
taxpayers by selecting projects in which the private sector is willing to
make the appropriate investment in expectation of getting a reasonable
return. Risk should shift from the Commonwealth to private partners.
This legislation will put in place new procedures for high-risk projects
that will shield the public from unexpected liabilities.
Transparency will be increased, requiring that all nonproprietary
information be on the table before critical decisions are made.
The Commonwealth will work with legislative partners so they
are involved in the P3 process from the beginning of a project’s
development. Legislative staff from the House and Senate will be
on the P3 steering committee that will determine if a project should
be a P3 candidate. They will assess if there is truly a risk and reward
relationship between the public and private sectors. There will also be
representatives on the finance side of government to advise if projects
meet criteria for a P3. This will reduce political risk and uncertainty.
The legislation will draw clear lines of accountability. The
secretary of transportation will be required to sign a document
attesting that the project qualifies as a P3 project, meaning risk has
been transferred to the private sector and that the original purpose
of the procurement has not changed. There will be no way to duck
responsibility for transportation decisions. It will protect taxpayers
from undue risk, while using the P3 process in the intended way to
deliver projects that move Virginia’s economy.
The P3 program will be built on three factors—minimizing
risk for taxpayers, increasing transparency and strengthening
accountability. By making this part of transportation law, I am
confident the Commonwealth can move forward in the best interest
of Virginians. I for one will be held accountable during my term as
transportation secretary to deliver a P3 program that protects citizens’
interests while leveraging our private partners’ expertise.
Donald L. Ratliff
VP–States Government Affairs
Alpha Natural Resources
One Alpha Place • Bristol, VA 24202
P.O. Box 16429 • Bristol, VA 24209
276.619.4479 (office) • 276.623.2891 (fax)
276.275.1423 (cell) •
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