PPPs and the Recession: F2I2 Discusses Midtown Financing
Today’s Virginian-Pilot interviewed F2I2’s director, Prof. Michael J. Garvin, about the recession’s impact on the availability of financing for the $1.5 billion Midtown Tunnel PPP. Despite investors’ decreased appetite for risk, he noted the project’s significant equity contribution (an estimated $525 million, relative to the proposed $1.2 billion debt), as well as a $600 million TIFIA loan share, will make the project more attractive to lenders. He also noted the private developer will need to establish a tolling plan which is publicly acceptable but can still assure investors of reliable long-term returns.
Although an interim agreement between VDOT and the developer, Elizabeth River Crossings, is expected next month, the project’s financeability is likely to remain a major element in subsequent negotiations toward a comprehensive agreement.