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V

irginia

C

apitol

C

onnections

, W

inter

2015

5

Developing Strategies

To have a viable workforce in the future, we are looking for

and must find the resources to attract people to public service and

motivate them to stay. Additionally, we must continue to focus on

giving employees the tools to improve their own health, which will

subsequently reduce health care costs for both the state employee and

the Commonwealth. These steps will go a long way to help alleviate

the financial and emotional stress that will in the long term sap

productivity and effectiveness of our state workforce.

The Commonwealth is fortunate to have an extremely altruistic

workforce. Men and women working in state government have given

back to their communities time and again. Despite these austere

times, our state employees in 2014 donated more than 2.5 million

dollars to charitable organizations through the Commonwealth of

Virginia Campaign (CVC) for workplace giving. Also, this does

not take into consideration the countless hours of volunteer service

that our state employees consistently provide in our communities

throughout the Commonwealth.

Through dedicated service to state government and to the

communities throughout Virginia, our state employees are vital to

helping to build the new Virginia economy.  In my role as Secretary

of Administration, I am committed to helping to improve the health

and workplace for all state employees.

Continued from previous page

One of the most critical transportation

bills before the General Assembly this

session will reform the way projects

are delivered under the Public Private

Transportation Act (PPTA), also referred

to as the P3 program. The P3 program

allows the private sector to partner with

the state to finance and build projects such

as roads, bridges and other transportation

improvements.

This program is a valuable procurement

tool to finance and build certain

transportation projects that would otherwise not be completed.

But only when the deals are negotiated in a manner that protects

taxpayers’ interests.

Virginia is a national and global leader in partnering with the

private sector to deliver multi-billion-dollar transportation projects

under the P3 program. A good example is the recently opened I-95

Express Lanes in Northern Virginia. The state contributed more

than $70 million in return for a project valued at nearly $1 billion.

Transurban shared in the risk, bringing significant private capital to

the table with the expectation of making a reasonable return on its

investment through tolling. This is truly a risk and reward partnership

that made good business sense for the Commonwealth. The public’s

interests came first.

The P3 process works for the right projects, but it is not the

solution to deliver every project. It should not have been used to

procure the U.S. 460 project, which would have built 55 miles of

new highway parallel to the existing one in southeastern Virginia.

This project lacked the right balance of risk and reward. The private

sector was not willing to invest its capital or take significant risk

because the reward of making a return on investment was not there.

This project was forced through the P3 process, at a cost of $300

million, while the state assumed the financial risk should the project

not be permitted. The process lacked transparency and decisions were

being made without engaging important stakeholders, such as the

General Assembly. One of Governor Terry McAuliffe’s first actions

in office was to stop contract work on the project. With his approval,

I subsequently issued a work order last March to focus solely on

getting a permit.

In the Hampton Roads region, the P3 for building a second

Midtown Tunnel imposed tolls before any new capacity had been

built. Shortly after taking office, Governor McAuliffe urged the

Commonwealth Transportation Board to cut those tolls in half during

construction. With both this and the U.S. 460 project, accountability

was lacking and the public’s best interests were not protected.

The McAuliffe administration is committed to restoring public

confidence in the P3 program so it is used for the right projects such as

the 95 Express Lanes. Governor McAuliffe will introduce legislation,

Reforming the P3 program for the public good

By Aubrey Layne, Secretary of Transportation

patroned by Delegate Chris Jones, to reform the P3 process so good

business decisions are made on behalf of the taxpayers while still

encouraging and rewarding private investment.

The legislation will require the P3 program to minimize risk for

taxpayers by selecting projects in which the private sector is willing to

make the appropriate investment in expectation of getting a reasonable

return. Risk should shift from the Commonwealth to private partners.

This legislation will put in place new procedures for high-risk projects

that will shield the public from unexpected liabilities.

Transparency will be increased, requiring that all nonproprietary

information be on the table before critical decisions are made.

The Commonwealth will work with legislative partners so they

are involved in the P3 process from the beginning of a project’s

development. Legislative staff from the House and Senate will be

on the P3 steering committee that will determine if a project should

be a P3 candidate. They will assess if there is truly a risk and reward

relationship between the public and private sectors. There will also be

representatives on the finance side of government to advise if projects

meet criteria for a P3. This will reduce political risk and uncertainty.

The legislation will draw clear lines of accountability. The

secretary of transportation will be required to sign a document

attesting that the project qualifies as a P3 project, meaning risk has

been transferred to the private sector and that the original purpose

of the procurement has not changed. There will be no way to duck

responsibility for transportation decisions. It will protect taxpayers

from undue risk, while using the P3 process in the intended way to

deliver projects that move Virginia’s economy.

The P3 program will be built on three factors—minimizing

risk for taxpayers, increasing transparency and strengthening

accountability. By making this part of transportation law, I am

confident the Commonwealth can move forward in the best interest

of Virginians. I for one will be held accountable during my term as

transportation secretary to deliver a P3 program that protects citizens’

interests while leveraging our private partners’ expertise.

Donald L. Ratliff

VP–States Government Affairs

Alpha Natural Resources

One Alpha Place

Bristol, VA 24202

P.O. Box 16429

Bristol, VA 24209

276.619.4479 (office)

276.623.2891 (fax)

276.275.1423 (cell)

dratliff@alphanr.com www.alphanr.com

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