Virginia cancels $1.4bn Ferrovial road contract

The US state of Virginia has cancelled a $1.4bn highway contract awarded to a joint venture (JV) between Ferrovial Agroman and American Infrastructure, and wants to recoup some of the $256m it has spent so far. 

The design-build project was awarded to the JV, called US 460 Mobility Partners, in 2012 after a two year procurement process. The plan was to build a new 55-mile tolled highway parallel to the existing Route 460. 

According to newspaper The Virginian-Pilot, former state governor Bob McDonnell signed the deal despite concerns over wetlands and without a permit from the US Army Corps of Engineers (USACE). 

Taking power in 2014, the new governor Terry McAuliffe suspended work on the contract, arguing the project would never get USACE approval in its original form. By then the JV had been paid some $256m. 

The Virginia Department of Transport (VDOT) and the JV then started looking for ways to change the scope to satisfy regulators, but they couldn’t agree. 

"The Commonwealth has determined it is in the taxpayers’ best interest to terminate the contract," said Virginia’s transport secretary, Aubrey Layne, on 15 March.  

"VDOT tried to work with the contractor to deliver the revised project in a cost effective manner. These efforts proved unsuccessful. The state will aggressively pursue all options available to do what is best for the public interest." 

Layne told reporters that the state’s position is that a significant portion of that money was paid for work that had not been done by the time the contract was suspended. 

A spokeswoman for the JV told The Virginian-Pilot that they were "disappointed" by the decision. 

"We have been meeting our obligations and have been both accommodating and patient as new project direction has been contemplated," said Shannon Moody. "We will continue working diligently with representatives of the Commonwealth to address this new situation." 

The plan for the new road isn’t quite dead. Officials now favour a shorter stretch of tolled highway that would be less intrusive on the wetlands, and improvements to the old Route 460 – but it looks unlikely that Ferrovial and American Infrastructure will be involved. 

Meanwhile, Ferrovial was recently awarded an expressway contract in Poland worth $196m.

Image: Route 460 west (aa roads)

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