Funding Issues Won't Stop Connector, State Says


WASHINGTON (Sept. 14, 2008)—Maryland Department of Transportation officials said Friday they are confident in the progress of the Inter-county Connector, despite recent funding issues.

MDOT announced Thursday it was indefinitely delaying part of the project, a day after the Maryland Transportation Authority postponed its sale of $425 million in bonds that were to fund the 18.8-mile toll highway.

But officials said funding for the $2.4 billion project remains unthreatened.

The ICC would connect Interstate 270 in Montgomery County to Interstate 95 in Prince George's County and is scheduled to open in early 2012.

Reports surfaced Thursday that the MdTA had cancelled a scheduled sale of $425 million in grant anticipation revenue vehicles, or GARVEE bonds, to the Federal Highway Administration.

GARVEE bonds are sold by state governments in return for federal funding of state highway and road projects. They are useful for state transportation departments that lack funding but want to avoid the inflated costs associated with project delays.

The MdTA backed out of the sale over questions regarding the struggling federal highway trust fund.

The U.S. Department of Transportation warned Sept. 5 that the fund would run out of money by the end of the month without emergency government relief.

"The trust fund, as has been predicted for a number of years, is continuing to run out of money," said Ian Grossman, spokesman for the Federal Highway Administration. "There was a shortfall in cash in the highway trust fund due to the dramatic drop in vehicle miles travelled."

Help appears to be on the way. The U.S. House of Representatives passed legislation Thursday to put $8 billion into the fund. The bill awaits approval from President Bush.

State officials expect to reschedule the GARVEE bond sale once the fund regains stability and they are confident the situation will not delay the ICC's progress.

"We have every intention of taking the bonds back to market," said MDOT Public Affairs Director Jack Cahalan. "It does not affect either the schedule or construction of the ICC."

Some roads connecting to the ICC along I-95 were affected by Thursday's construction postponement.

The ICC's construction is divided into five contracts. The primary highway is contained within Contracts A, B and C. The delayed portion is in Contract D.

Its postponement is designed to cut costs and compensate for Contract B, which was awarded a week ago at $559.7 million, $100 million more than initial estimates.

The absence of the roads will not have an effect on the ICC's main highway construction or eventual effectiveness, Cahalan said.

"All they do is try and get people on and off I-95," he said. "They're not critical to the function of the 18-mile Inter-county Connector."

State officials said the project will be completed by early 2012 within its $2.4 billion budget.

The ICC is a high-priority state project and was not among the list of highway projects to which the Maryland Department of Transportation will postpone $1.1 billion in funding over the next six years.

Due to the project's magnitude, officials decided to fund the ICC separately from other projects. It is financed largely by MdTA bonds, rather than through the state transportation trust fund.

"The ICC operates on an entirely different universe in the funding world than our traditional batch of highway and transit projects," said Cahalan. "Simply because of the 'mega project' status that it maintains."

Capital News Service contributed to this report.

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