Secrecy of Negotiations Worries Officials, Critics
By Bill Turque
Washington Post Staff Writer
Friday, March 23, 2007; Page B01
If Virginia transportation officials and a private contractor resolve their differences over costs and strike a deal to build the Metrorail extension to Dulles International Airport, Northern Virginia commuters and landowners paying most of the $4 billion bill are likely to know very little about the terms of the agreement.
A state law intended to bring big-ticket road and rail projects to fruition quickly and cheaply also grants the parties involved an unusual level of secrecy in their negotiations. The lack of transparency could make it difficult to evaluate the financial risks that accompany such complex public works, such as cost overruns and scheduling delays, some local officials and critics say.
Secrecy is not the only issue surrounding the Public-Private Transportation Act of 1995. The law was designed to jump-start expensive road and transit projects by attracting private-sector investment and corporate efficiency to the process. It allows the state to dispense with traditional competitive bidding and select a single private partner to design and build a project for a fixed price and profit.
It hasn't quite worked that way. The private contractor, Dulles Transit Partners -- a construction consortium of Bechtel Inc. and Washington Group International -- has put no money into construction of the extension's first phase, which would run from just east of the West Falls Church Metro station to Wiehle Avenue in Reston by 2012. The consortium will be reimbursed for the $15 million it has spent on preliminary engineering work if it reaches an agreement with the state.
Other public-private projects completed or underway, including Route 28 interchanges in Fairfax County and a portion of Route 288 in Powhatan and Goochland counties, also involve little or no private money. The Dulles extension, the first rail project proposed under the public-private law, would be funded entirely with federal, state and local dollars, including more than $1 billion from Fairfax landowners, businesses along the Dulles Toll Road and motorists who use the road.
"There are some real significant issues of secrecy, accountability, conflict of interest and failure to protect the public trust," said Stewart Schwartz, executive director of the Coalition for Smarter Growth, which advocates clustered development around transit stations.
Howard Menaker, a Dulles Transit Partners spokesman, said that he could not speak specifically about the lack of investment in the rail project but said that all public-private ventures evolve differently. He also said that although he wasn't familiar with the specifics of the public-private partnership, such arrangements help companies protect fee structures and business strategies that would be valuable to competitors.
"This is the level of confidentiality that the legislature felt was appropriate at the time they passed the public-private partnership act," Menaker said. "I'm not going to second-guess the legislature."
The concerns about secrecy are compounded by a conflict over how the rail line will run through Tysons Corner. Current plans call for an elevated track down the middle of Route 7. The Fairfax County Board of Supervisors and TysonsTunnel.org, a coalition organized by the McLean Chamber of Commerce, are urging that the process be opened for consideration of a tunnel, which they say would enhance Tysons' evolution into a mature urban center.
Gov. Timothy M. Kaine (D) has resisted the tunnel option, and an engineering report commissioned by the state concluded that it would be too expensive, time-consuming and technically risky. State officials also say that the delays necessary to consider a tunnel place $900 million in federal funds at risk.
Tunnel advocates say that with the construction consortium's price for the aerial option under wraps, the state's claim of a higher cost for the tunnel is not credible.
"We have all the documents [supporting] the tunnel in the public domain," said Schwartz, referring to a $3.5 million engineering study funded by TysonsTunnel.org.
Fairfax County board members also expressed concern about having key design elements peeled away in negotiations to meet federal cost guidelines. Supervisor T. Dana Kauffman (D-Lee) said one early cost-saving measure that surfaced was a shrinking of pedestrian walkways "into glorified cattle chutes."
All of the debate over the project assumes that the extension gets built in any form. State officials and the Metropolitan Washington Airports Authority, which would manage the project, are threatening to end talks with the consortium if terms can't be reached by April 5. Officials say the consortium's cost estimates are too high and must come down to meet strict federal cost-effectiveness criteria.
If the sides do sign a construction contract, many terms and details normally in public view will be treated as though they were national security directives. Under a 2004 agreement between the consortium and the Virginia Department of Rail and Public Transportation, documents dealing with cost estimates, scheduling, overruns, markups, overhead and profit will be regarded as trade secrets and "sealed jointly" by the consortium and the state transportation agency for delivery to an escrow agent. If there are disputes, the materials can be reviewed -- jointly only -- with 10 days' written notice.
The documents "are and shall always remain" the construction consortium's property, according to the agreement. Six months after final payment to the consortium and the resolution of any outstanding disputes, the materials will be destroyed. Moreover, the airports authority is exempt from the state's freedom of information act, making public access to the documents even more difficult.
A handful of Fairfax County officials, including Richard F. Stevens, the Dulles project coordinator with the Fairfax County Department of Transportation, have been required to sign confidentiality agreements in exchange for access to the pricing documents. Stevens declined to discuss the agreement, and it is not clear to what extent he and other staff members will be able to brief elected officials on details of the construction contract if and when it is signed.
Elected officials in Northern Virginia are anxious that they will, in effect, be signing a check without having a chance to look at the bill.
"We're very fearful that they've been able to use the cloak of secrecy [that the public-private act] provides to prevent public penetration of the contractual aspects of this project," said Gerald E. Connolly (D), chairman of the Fairfax County board. Members are especially apprehensive about "change orders," or alterations in the project's design for budgetary or engineering reasons. "We're going to be handed a bill and told to ante up," he said.
Matthew O. Tucker, director of the Virginia Department of Rail and Public Transportation, downplayed secrecy concerns. He said there have been more than two dozen technical and advisory group meetings involving the local stakeholders, including Fairfax and Loudoun counties, the airports authority and Metro. "All of these major civil projects come together in different ways," he said. "From that perspective, I don't see this as anything outside of the ordinary."
Tucker said that none of this should surprise local officials. It was all part of the preliminary accord reached by the consortium and the state in 2004. "Everyone had a full understanding as to what this process was and is."
Fairfax officials said the meetings that Tucker described were updates on progress, not deep drillings into details.
But Tucker's response raises the question: Why did local officials buy into a project under the public-private partnership act?
Kauffman, a member of the Metro board and an advocate for the tunnel, said it was seen as the only way to finance such an expensive undertaking. "So it was presented basically as, 'Begin this dance, or there is no project.' "
Fairfax representatives say their concerns are not without precedent.
"Just look north," said Kauffman, referring to Bechtel's management of Boston's $14.6 billion "Big Dig" highway project, originally budgeted at $7.7 billion. In 2004, Massachusetts officials filed a $146 million lawsuit against Bechtel and Parsons Brinckerhoff, alleging that the contractors concealed actual cost estimates from the state to keep the project on track.
Bechtel officials say that the suit, still pending, is without merit.
Dulles Rail Timeline
The project to build a Metrorail extension to Dulles International Airport is over budget and behind schedule. Here are some key benchmarks:
February 2007: Initial deadline for the regional airports authority and project contractors to reach an agreement on a price for the first phase of the project, from a point just east of the West Falls Church Metro station to Wiehle Avenue in Reston.
April 5: New deadline.
May 2008: Deadline for Virginia to submit completed plans to qualify for $900 million in federal money.
Late 2008: Anticipated start of construction.
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