Declining traffic estimates are throwing a wrench in the state’s plan to start a $400 million realignment of U.S. Route 301 in late 2014.
Delaware Transportation Secretary Shailen P. Bhatt said Friday that the project’s start date could now be pushed back six months or more.
“Let me be clear, this road will be built,” Bhatt said. “But we also have to consider the fundamental change in the department’s historical assumptions about how it will be paid for … This may take some time and we will report our findings and conclusions as soon as we have the information to do so.”
The delay in construction is the result of two, independent traffic analyses that anticipate between 5,200 and 7,000 cars and trucks would likely use the proposed four-lane, toll highway during the first year.
That’s less than half the 14,800 vehicles that were estimated in 2009.
Those lower traffic estimates mean the Delaware Department of Transportation is now anticipating significantly less toll revenue to cover the cost of building the 14-mile highway from the Delaware-Maryland line, southwest of Middleotwn, to Del. Route 1, just south of the Chesapeake and Delaware Canal.
The first year of projected annual revenue has dropped from $31.8 million to between $15.6 million and $17.8 million, based on the recent traffic estimates.
Bhatt said those lower traffic and revenues estimates would likely mean DelDOT would now only be able to secure about $185 million worth of toll-backed revenue bonds, which is between $50 and $100 million less than required.
“We’re basically going to have to change our plan of finance for this road and in order to do that I’m going to have to go to the General Assembly [in January] and say we’ve got a new set of data,” he said. “I’m going to have to get their authority to raise money or borrow money in order to come to the table for that shortfall.”
At the same time, Bhatt and DelDOT officials will ask Moody’s Investors Service to re-evaluate the project to determine whether it can still qualify for about $193 million in low-interest federal loans.
In a best case scenario, Bhatt said those decisions would come as early as June 30.
In the meantime, he said, DelDOT officials will begin the process of examining short-term construction options that would allow for congestions and safety improvements on the existing highway in the event that further delays are required.
“My position has always been, before we commit the state to a half-billion dollar investment, I want to make sure we have all the data points, and I think we have those now,” he said. “I’d rather be having this discussion now before we get into the construction and go into it with our eyes wide open, as opposed to sell the bonds and have lower traffic show up in which case we’re scrambling on the back end to cover revenue shortfalls.”