Hogan's $50 Tolls
Not High Enough for Transurban

press release

July 12, 2021


Governor Larry Hogan's $50 tolls aren't high enough for Transurban, the company picked by the governor's team to build toll lanes across the American Legion Bridge and on I-270. The profit-hungry Australian firm warned Maryland officials last November that tolls must be raised even higher before construction can begin.
The $50 toll plan goes before a public hearing in Rockville today. As proposed by the Hogan-appointed Maryland Transportation Authority, the maximum toll would start at $3.76 per mile in 2021 and rise by 2.1% plus inflation annually. The escalation begins even before anything is built, so the rate would hit $4.17 per mile when the lanes open in 2026. 
For the 12-mile trip from the George Washington Parkway to I-370 at Shady Grove, that makes the toll $50 in 2026. Then it keeps going up, hitting an astronomical $141 when Transurban's contract ends in 2076. And these numbers are in 2021 dollars -- the actual toll would be even higher to make up for inflation.
But these sky-high tolls aren't enough for Transurban. In a November 18 letter, the company told the state that toll rates need to go up even faster than the proposed 2.1% plus inflation. The reason? The "growth of congestion" after the new lanes open.
In other words, Hogan can't keep his promise of "congestion relief." As Transurban sees the future, traffic jams in the free lanes will keep getting worse and worse over the 50-year life of the contract. Drivers will have to sit and suffer, or cough up the exorbitant tolls needed to hit the company's profit targets.
It may not take long for the hammer to come down. Transurban anticipates "engaging in a discussion on the technical implementation of the rates" during the "predevelopment period" -- a period that will kick off soon unless the state's Board of Public Works rejects the company's contract. A BPW vote is expected on July 28. 
And what happens if the state balks at higher tolls? "The toll rates are a critical element in evaluating project economics." Transurban's contract lets the company back out if its profit forecast falls short. Governor Hogan will have to give in to Transurban's demands, or face the political fallout of killing the P3 project that is the heart of his nationally-promoted infrastructure initiative.