Northwest Corridor: Toll revenues, peak speed, traffic trips exceed expectations
By David Pendered
Commuter response to the recently opened toll lanes along the Northwest Corridor is above expectations as drivers use the toll lanes that run adjacent to the highway system in Cobb and Cherokee counties, according to a report by Moody’s Investors Service.
Air quality is expected to be improved by the project. Tailpipe exhaust is expected to be reduced by about 23.8 tons a year as 2.87 billion gallons of fuel are saved by reducing the waste of engines idling in traffic congestion, according to a statement by the U.S. Department of Transportation that cited a report from the project sponsor.
The toll system opened in September 2018 and was delivered basically on time and on its budget of $835 million, Moody’s analysts reported. The project is the state’s third foray into a Georgia version of congestion pricing, one that provides commuters an option to avoid traffic congestion by paying a fee to access separate travel lanes.
The nuts and bolts paragraph of the April 3 rating action by Moody’s observes that the project’s positive rating, “reflects the achievement of all three substantial completion milestones – in May, July and October 2018 – and the commencement of revenue service in September 2018:
- “The delivery of the project substantially on time and consistent with the initial cost estimate of $835 million;
- “The favorable demand experienced in the first five full months of operations, in which traffic trips, peak speeds and revenues have exceeded forecasts;
- “And continued healthy employment and population growth in the Atlanta metropolitan area and in Cobb and Cherokee Counties.”
In the rating action, Moody’s affirmed its investment grade rating of Baa3 on a federal loan with a current outstanding amount of $260 million. The outlook is stable because consumer demand is expected to remain constant or accelerate, analysts reported:
- “The stable rating outlook is based on Moody’s expectation that the Northwest Corridor will continue to meet or exceed the ramp-up forecast and that economic conditions in the Northwest Corridor’s metropolitan statistical area (MSA) will remain at or near current levels.”
The Obama administration approved and delivered a loan of $275 million to help fund the 29.7-mile-long toll project that had a price tag of $833.7 million, according to a statement released in November 2013, when then Transportation Secretary Anthony Foxx visited Atlanta to announce the funding.
The federal loan was provided through a credit agreement funded by the Transportation Infrastructure Finance Innovation Act. According to U.S. DOT: “The TIFIA credit agreement was executed in November 2013. Interest payments are set to begin in 2023 and principal payments are expected to begin in 2025. Final TIFIA maturity is expected in 2053.”
The Northwest Corridor project served as a major test of the program management system now being used to upgrade the intersection of I-285 and Ga. 400.
The Northwest Corridor was developed through a public/private partnership in which the private sector contributed to the design, construction and finance of the project, according to an email statement from the Georgia Department of Transportation. The design/build/finance method:
- “[A]llowed the State to transfer the project’s design, construction, and a part of the initial financing responsibility to a private sector partner. This enables the State to leverage funding to accelerate project delivery as well as capture private sector innovations.”
This private partner was required to finance a minimum of 10 percent of the design/build construction amount, according to the U.S. DOT statement.
The project was funded with the following, according to the U.S. DOT statement:
- “State Motor Fuel Taxes: $232.9M
- “TIFIA Loan: $275M
- “GDOT Program Funds (Federal and State): $265.9M
- “Developer Financing: $59.9M (to be repaid by the State with toll revenue bonds/motor fuel tax revenues)”