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The 495 Express Lanes in Northern Virginia—14 miles of EZ Pass-only toll lanes where HOV-3 vehicles ride free—are still struggling to attract drivers nearly one year after opening. Traffic volume on the new highway is below expectations, according to information reported to the Australian Securities Exchange.
Transurban, an Australia-based road building conglomerate, paid $1.5 billion of the highway’s $2 billion construction cost, and is hoping for a return on its investment as it maintains and operates the Beltway toll lanes between the Springfield interchange and the Dulles Toll Road.
But even as traffic volume and toll revenue on the 495 Express Lanes slowly increase according to the company’s quarterly reports, “to date traffic on the 495 Express Lanes in Northern Virginia remains below the project case expectations, and Transurban continues to monitor the emerging revenue profile as the project moves through its ramp up phase,” the report to the Australian Securities Exchange said.
“What we remain focused on today is continuing to operate the road successfully and to ensure that we're providing those faster, more predictable rides on the Beltway for our customers,” said Michael McGurk, a Transurban spokesman.
When asked why it remains a challenge attracting motorists to a congestion-free toll road in one of the most congested corridors in a region known for its bumper-to-bumper jams, McGurk said many drivers are still learning about the Express Lanes.
“From this last quarterly report, we learned that 40 percent of Beltway travelers don't have an EZ Pass, which means they're not in a position to even take advantage of this roadway,” said McGurk, who has said a new toll road usually has a ramp-up period of three years before usage peaks.
Transurban opened the 495 Express Lanes to all motorists, EZ Pass or not, for one weekend last spring in a bid to increase traffic volume and toll revenues. The company has undertaken public outreach efforts to educate motorists about the highway’s many new entrance and exit ramps, and is now asking drivers to complete a survey in order to improve the Express Lanes’ driving experience. These efforts seem to be paying off.
“Revenue on the 495 Express Lanes grew from a daily average of $45,270 for the June quarter to an average of $51,736 for the September quarter. On 12 September 2013, the 495 Express Lanes achieved record daily toll revenue of $108,493, on the back of a record 47,303 trips for the day,” the ASX report to investors said.
Whether the 495 Express Lanes are or eventually will be successful at improving economic development and regional accessibility is difficult to determine at this early juncture, said Emil Frankel, a transportation policy expert at the D.C.-based Bipartisan Policy Center and former assistant transportation secretary in the George W. Bush administration.
“There is an expectation with a new facility that it’s going to take a while for traffic to build up and for it to show sufficient revenues, and for there to be returns on the investment,” Frankel said. “I think the chances are likely they projected a pretty slow ramp-up and that revenues would not meet expenses at this stage.”
“This is a piece of infrastructure. This is not a business that goes away. If the venture fails the Commonwealth of Virginia will end up with this asset at much reduced cost,” Frankel added. “It will have the burden of operating the asset, but [Virginia] will still have gotten a major benefit at much reduced cost.” Virginia spent $400 million to help build the $2 billion road.
Frankel said volume on the 495 Express Lanes would increase if the new lanes become part of a larger network of managed toll lanes. The 95 Express Lanes, which will connect to the 495 Express Lanes southern terminus, are expected to be completed next year.
“Each person makes a separate judgment, sometimes trip by trip, as to whether their time is worth the amount of money that they are being asked to pay on that roadway,” Frankel said. “It takes people a certain period before they recognize that and are willing to pay money for it, to monetize that.”
“This is a limited stretch. It’s not even the full Beltway. It’s just in Virginia. It should be continued and hopefully at some point will be continued in Maryland. One can imagine if the full Beltway carried so-called managed or tolled express lanes, they would be of more value to people.”
Studies have determined expanding HOT lanes to the entire Beltway would cost tens of billions of dollars, but motorists may be inclined to pay a premium for a faster, more predictable ride.