THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Tuesday, November 29, 1994             TAG: 9411290312
SECTION: LOCAL                    PAGE: B1   EDITION: FINAL 
SOURCE: BY MAC DANIEL, STAFF WRITER 
                                             LENGTH: Medium:   81 lines

PRIVATELY BUILT ROADS COULD RENEW TOLLS A PROPOSED STATE LAW ALSO WOULD GIVE GOVERNMENTS MORE FLEXIBILITY.

Tolls on Virginia Beach-Norfolk Expressway may be history, but new toll roads could rise again as state legislators consider allowing private companies to get into the public transportation business.

Beginning in January, state legislators will debate whether to allow private companies to build, operate and lease pieces of Virginia's transportation system - everything from highways to bridges to exit ramps. Rail is excluded.

The motive for private business? Profit. And where would that profit come from? Tolls.

The theory is this: Allow private businesses to submit project proposals. If the government likes what it sees, it enters into a partnership with the business, which in turn begins building.

Once the project is built, private companies would be allowed to charge user fees or tolls to make their money.

If, for example, Hampton Roads wished to build another bridge-tunnel, private money would fund construction. When the span was completed, the state or locality would lease it to the builder for a period of years. During that time, the builder could charge tolls to pay off its debt and to make a profit.

State Sen. Elliot S. Schewel, D-Lynchburg, the bill's original sponsor, said, ``There is no way we can possibly build and finance all of the transportation infrastructure that is needed. And there are apparently almost unlimited funds available from private investors. This seems to be a very logical move to make.''

The legislation would also allow cities to establish partnerships for local highway projects without waiting for state funding.

There are few critics of the plan, mainly because few people have seen the final legislation.

Concerns that have been raised center on:

The efficiency of private vs. public builders: Federal and state regulations - not lack of efficiency - delay road projects, critics say. Private builders would have to deal with the same environmental reviews and delays as the government.

The rate of return on certain projects: Since private businesses would likely require a large rate of return, tolls would likely grow. Commuters could decide to take alternate routes.

The cost of building roads: The Dulles Toll Road, the state's only privately funded road, was delayed for several years as the private builders waited for funding. Private firms would also have to borrow money at higher interest rates than the state. That could also mean higher tolls.

Newport News Councilman Joe S. Frank, former chairman of the Hampton Roads Planning District Commission, worries that this legislation could produce a huge inequity in the state, pitting rural regions against cities and Northern Virginia against Richmond and Hampton Roads.

Private business would go where the money is, he said, not where the need is.

``It's very easy to say, `Let private industry do this and let private industry do that,' '' Frank said. ``But we need to know what the true costs are in terms of the impact on the ability of the commonwealth to deliver an effective transportation system to all its citizens.''

The Virginia Department of Transportation supports the proposal, now unofficially known as the Proposed Public Private Transportation Act of 1995. The bill passed the general assembly last year but was delayed by the newly elected Allen administration for further study. Some legislators expect it will be one of the session's more important bills.

``It's not an effort to replace what's already working,'' said state Sen. Walter A. Stosch, R-Glen Allen, who chaired the subcommittee that studied the bill. ``It's simply an effort to add to the flexibility that local governments and state government have in constructing and financing these projects.''

Art Collins, director of the Hampton Roads Planning District Commission, is withholding judgment. ``The devil is in the details,'' he said. ``We have to wait until we see the final plan.''

Collins said the local commission neither endorsed nor fought the proposal last year.

Secretary of Transportation Robert E. Martinez, a supporter of the plan, said ``this issue is not about supplanting. We are not going to be cutting back one penny on the program that we have in place.'' by CNB