In 1995, the Dulles Greenway, the first privately financed toll road built in over a century, opened in Northern Virginia. Investors believed they could profit from the commonwealth's failure to build a highway between Dulles International Airport and Leesburg in fast-growing Loudoun County. But the Greenway's backers overestimated demand and the amount of tolls drivers were willing to pay, and it has been losing money ever since. Equity investors lost all their money, estimated at $1 billion, and the Greenway's value has plummeted by two-thirds.
After it went bankrupt, the toll road was subsequently purchased by Macquarie, an Australian consortium. According to Peter Samuel of TollRoadsnews.com, Greenway traffic was up slightly last year despite an 8 percent toll hike, but still running 23 percent below its 2005 peak.
This dismal history has not stopped Virginia House Transportation Committee Chairman Joe May, R-Leesburg, from introducing legislation that would saddle Virginia taxpayers with this white elephant. His rationale for purchasing the money-losing Greenway is to lower tolls.
This is the same Joe May who, after initially voicing his opposition in 2005, meekly acquiesced as former Gov. Tim Kaine unilaterally handed over the state-built Dulles Toll Road to the Metropolitan Washington Airports Authority the following year without General Assembly approval, knowing that DTR tolls would have to be even higher than the Greenway's to pay for Dulles Rail. May's inconsistent positions on tolls do not make sense.
The latest annual financial report of Toll Road Investors Partnership II LP, the Greenway's holding company, shows a net operating income of $41.7 million, which is eclipsed by the $66.2 million in annual interest owed on its debt. So even though it charges $5.80 during peak commuting times, the Greenway still manages to lose $25 million a year.
"How can Dulles Rail survive financially if the Greenway can't?" Thomas Cranmer, economist for the Dulles Corridor Users Group, pointedly asked Loudoun supervisors last May. That's a question all supporters of Dulles Rail -- including Del. May and Rep. Frank Wolf, R, who called May's proposal "a good idea" -- should be forced to answer.
Samuel says it would be "preposterous, absurd, stupid, totally unjustified and insane" for Virginia taxpayers to save the Australians from their bad investment. In 50 years, the Greenway will revert back to the commonwealth anyway. Perhaps by then, the road will not be such a money pit. Virginia can certainly afford to wait.