October 28, Mr. Jack Hornbeck President & CEO Hampton Roads Chamber of Commerce 500 East Main Street, Suite 700 Norfolk, VA 23510

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1 October 28, 2010 Mr Jack Hornbeck President & CEO Hampton Roads Chamber of Commerce 500 East Main Street, Suite 700 Norfolk, VA Dear Mr Hornbeck: On September 29,2010, the Hampton Roads Crossing consortium(hrc)submitted a conceptual proposal to the VirginiaDepartment of Transportation(VDOT)to add capacity to the Hampton Roads Bridge-Tunnel(HRBT) Our proposal was submitted in accordance with the Commonwealth's Public-Private Transportation Act (PPTA) guidelines and the provisions of House Bill402, adopted during the 2010 session of the Virginia General Assembly, signed by Governor McDonnell and which called for VDOT to accept such proposals by September 30,2010 The HRC consortium is comprised of Virginia-based Skanska Infrastructure Development, Kiewit Infrastructure Co, Skanska USA CivilSoutheast (formerly Tidewater Construction of Virginia Beach), Weeks Marine, Inc and Parsons Brinckerhoff This team has decades of experience in financing, designing, constructing, maintaining and operating major transportation facilitiesin Hampton Roads, Virginia,across the UnitedStates and in markets around the globe In fact, members of this team have worked on all of the existing tunnel facilities in the Hampton Roads region Our conceptual proposal is focused on providing an efficient solution to the chronic congestion of Interstate 64 at the HRBT that has for many years adversely affected the economic health of the region as travelers try to cross between the Peninsula and South Hampton Roads Our plan will add four lanes of bridge and tunnel capacity across Hampton Roads, and then add a lane to the existing two lane portions of 1-64 on each side of the tunnel Since the tunnel itself is often the constraint on the system, providing extra capacity is expected to afford significant congestion relief This plan, if approved, would significantly minimize right of way impacts in Norfolk and Hampton In addition to adding capacity to the HRBT, our proposal is to modernize, operate and maintain the existing HRBT, the Monitor-Merrimac Memorial Bridge-Tunnel, the James River Bridge and many connecting roads and highways With the consortium taking on these costs and obligations, VDOT can shift budget and workforce resources to address other infrastructure priorities in Hampton Roads VDOT has affirmed our conceptual proposal and will now open a tender process seeking competing proposals In addition, each affected jurisdiction will be given the opportunity to review and comment on the HRC proposal As you may be aware, VDOT has also initiated procurement for consultant services to complete the environmental impact statement (EIS) for the HRBT This federally-required process is Hampton Roads Crossings 99 Canal Center Plaza Suite 125 AlexandriaVA22314 P: F:

2 0 Hampton Roads Bridge-Tunnel Conceptual Proposal Introduction I Page 2 of 2 expected to start in spring 2011 Any proposalfor expandingthe HBRTwill have to adhere to the findings and recommendations of the EIS Enclosed I am providing you with the Executive Summary from our conceptual proposal You'll see that our Executive Summary provides details about how the project would be procured using the Commonwealth's Public-Private Transportation Act We believe that a public-private partnership with tolling is the only way this project is likely to get funded and built Hampton Roads Crossing, together with VDOT, realizes that an affordable toll must be reached You will be contacted by our team in the coming weeks to find a time convenient for you to talk about the HRBT, our proposal and the next steps in the PPTA process In the meantime, if you have any questions please feel free to contact Mark Lemon, Project Director, Skanska Infrastructure Development Mark can be reached at (571) or markjemon@skanskacom Alongside VDOT, HRC intends to be an active partner with you in developing this critical infrastructure project Without an open dialogue and a truly regional approach, this project cannot succeed We believe working together we can deliver a long-needed, financially viable project that will improve the quality of life for residents, businesses and visitors ~4~ Karl H Reichelt Executive Vice President Skanska Infrastructure Development Enclosure Hampton Roads Crossings 99 Canal Center Plaza Suite 125 AlexandriaVA22314 P: F:

3 Executive Summary What is this Proposal? The chronic congestion of Interstate 64 at the Hampton Roads Bridge Tunnel has for many years adversely affected the economic health of the region and the well-being of road users trying to cross between the Peninsula and South Hampton Roads Although there is not always agreement on how to cure this problem, few would question the diagnosis that something must be done, and quickly In this Conceptual Proposal to form a Public-Private Partnership we aim to present a design, a development approach, a financial plan and a team that will double the capacity of the HRBT, manage traffic to ease congestion across the 3 major north-south harbor crossings, and secure that they are all maintained and operated at the highest standards long into the future Who is it/rom? Hampton Roads Crossings is a consortium of leading international construction companies and an infrastructure investor committed to the improvement of people's lives through the development of sustainable infrastructure SKANSKA (!5) Kiewit SKANSKA WEE~RINE INC Skanska Infrastructure Development: Is the PPP development and investment business within the Skanska Group; it has developed some 19 PPP projects in Europe and Latin America, committing almost $600m of its own capital Since the recent global credit crisis Skanska ID has closed several PPP financings including two in the $2billion range Kiewit Infrastructure Company: Will lead the Construction Joint Venture; it is one of the largest transportation contractors in North America and is a leader in self-performing projects in the heavy civil market Kiewit has played a major role in many of the largest and most challenging projects in North America, often working together with one or more of the other HRC members Skanska USA Civil: Brings the financial strength and global experience of Skanska AB, as well as being long established in Tidewater, VA Skanska USA Civil has been involved in almost every water crossing project in the Hampton Roads area over the past fifty years or more Weeks Marine: In over seventy-five years of existence, Weeks Marine has grown into one of the leading marine construction and dredging organizations in the United States Its experience covers the full diversity of marine construction and refurbishment needed to successfully deliver HRBT, often gained working with Kiewit or Skanska Parsons Brinckerhoff: Is a leading design and engineering consultant for submerged tube tunnels and bridge structures around the world; its capabilities extend to every aspect of transportation planning and design It has major offices in the Hampton Roads area and was the designer of the previous 2 phases of the HRBT as well as many others Hampton Roads Crossings ;0 ( on Roous Br jge T~r e p ~'ec Conceptual Proposal Page 1

4 While the members of our team are clearly major corporations, each has a significant presence in either the Hampton Roads area or elsewhere in Virginia; and we are currently working together on the Midtown! Downtown Tunnel MLK Freeway Project, a project similar in many ways, to improve mobility between Norfolk and Portsmouth What is the goal? Our objective is to provide and operate a modem, high capacity, well managed and well maintained system of bridges and tunnels crossing Hampton Roads, primarily focused on adding capacity to the 1-64 Hampton Roads Bridge Tunnel, that will: Significantly reduce chronic congestion Provide predictable, journey times to facilitate reliable public transit and intermodal transportation Be an enabler of economic and social development in the region Solve transportation issues in a sustainable way that minimizes the inevitable environmental impact of providing and using infrastructure, and Provide real value to the users who will ultimately pay for the facilities Who will benefit? The benefits of improved mobility across the water separating South Hampton Roads from the Peninsula and the rest of northern Virginia are numerous and far reaching for: Individuals by giving them more time to spend enjoying their family and leisure time or working to improve their quality of life Businesses by improving the efficiency of delivery of stock by suppliers, the ease of getting goods to customers and the likelihood of customers coming to buy goods and services The Port of Hampton Roads by greatly improving truck access to the 1-64 The Military by improving access to the Navy yard The Region by generating more economic activity, encouraging more visitors and attracting inward investment once the facilities are fully operational; plus from the hundreds of millions of dollars being spent in the local economy during construction The increase in capacity will also benefit other regional road improvements, such as the Route 460 project as part of a developing modern network The Environment by keeping traffic moving and reducing the negative air quality impacts caused by congestion Emergency Response by adding more capacity to emergency evacuation routes In addition, our proposed approach to the project has specific benefits for: Communities adjacent to the highway because it uses the existing 1-64 right of way greatly reducing right-of-way impacts in comparison to previous proposals The Commonwealth by taking on the obligation to modernize, operate and maintain the existing HRBT, the Monitor Menimac Memorial Bridge Tunnel, the James River Bridge and many connecting roads and highways we will release VDOT from many of its responsibilities for these facilities and free up valuable budget for other priorities Hampton Roads Crossings Hamptor Roaa> Bridge TJrmel Proiec+ Conceptual Proposal Page 2

5 Who will pay? Highway water crossings require significant investment and our proposal is that the cost of this investment for the HRBT expansion and improvements to the MMMBT and James River Bridge be met by charging tolls to the users of the facilities The user-pays model has become the norm for highway investment in jurisdictions around the world and is being relied upon more and more here in the US as public funds for major projects have all but dried up To ensure that the toll is kept as low as possible we will make full use of any federal, state or other direct funding or support that might be available as well as raising money in the international financial and capital markets Skanska ID and other equity investors will put very significant sums at risk against the long term success of the project and the construction companies will be held absolutely to a fixed price, time certain contract to deliver The financial strength and technical competence of the consortium members and the long history we have doing this type of work together mean that we can raise the funds necessary to deliver this project very efficiently and at low cost whilst being certain of delivering fully on our promises What will it cost? HRC estimates that user tolls will be in the range of $4 to $6 dependent on variables such as the availability of some limited Federal, Commonwealth or other public financial support, detailed traffic studies, the outcome of the Environmental Impact Study process, final technical scope and construction price, and commercial terms This will pay for an estimated project capital cost for the expanded HRBT in the range $35 to $45 billion, which is consistent with the most recent feasibility study adjusted for scope, inflation and market conditions Within this toll price, HRC will also invest significantly in the upgrade and ongoing capital maintenance of the 3 crossings How will we do it? Development: We are cognizant that the structures and processes for projects delivered under the Public Private Transportation Act of 1995 are in the process of review and overhaul, with the intent to streamline and improve them Because we have direct recent experience of the legislative and permitting processes and will be able to manage these efficiently and effectively, we have proposed a development schedule and approach that relies on only minimal input from the Commonwealth It also integrates fully with the Environmental Impact Study currently being procured by VDOT and yet could mean a Comprehensive Agreement could be signed and construction started by the end of 2013 The EIS and hopefully a Record of Decision will be on the critical path of the development schedule We have in the consortium a significant resource of local construction experience and knowledge of previous studies and designs This, along with our proposal to work in partnership with the EIS consultant by providing data and input, while avoiding any overt advocacy of specific alternatives, should mean that the work can be concluded well within the 3 year planned timeframe Construction: The HRC consortium is uniquely placed to mobilize resources and a supply chain to deliver the new and improved facilities as it will be completing activities and demobilizing resources from the MidtownIDown Tunnels immediately before they would be required on this project Knowledge Hampton Roads Crossings Conceptual Proposal Page 3

6 gained would be transferred and exploited, including technical experience and critically an understanding of local issues, pennit requirements and dynamics The supply chain, including for the crucial immersed tube fabrication, transportation and installation would be largely the same These factors mean that uncertainties, along with their associated risk contingencies will be significantly reduced Delivering the Benefits: As a team, we intend to be a part of this project for the long term and hence we take a long-term view of our responsibilities to the communities of Hampton Roads When designing, building and operating these facilities we make decisions based on the whole lifecycle of the asset, including the cost of maintenance, the overall environmental impact and, most importantly, keeping traffic flowing through the system as freely as possible at all times Sophisticated life-cycle modeling informs the build specification, intelligent condition-based maintenance keeps interventions to a minimum, and all-electronic free flow toll collection does not interfere with traffic in any way Public involvement and ensuring that the needs of all stakeholders have been properly heard and considered are essential to understanding what is needed and delivering the most responsive possible solutions We will go the-extra mile in-oor outreach and inclusion effort&-to ensure that no legitimate stakeholder is overlooked Why support this proposal? The HRC proposal raises and confronts some potentially controversial issues: the considerations in developing a project such as this are political, economic, social, environmental and often very personal We believe that as members of the Hampton Roads community we understand these considerations and will be sensitive to them whist delivering a long-term solution to arguably the region's worst transportation problem and the security of a well managed system of crossings for decades to come Hampton Roads Crossings Hampton Roads Bridge Tunnel Project Conceptual Proposal Page 4