Project Profiles

Location

West Virginia

West Virginia Department of Transportation (WVDOT)

King Coal Highway Authority

Program Areas

Mode

Highway

Description

The King Coal Highway is a new four-lane highway approximately 90 miles long running through McDowell, Mercer, Mingo, Wyoming, and Wayne counties along or near currently existing US Route 52. Some of the construction work is being done by local mining companies as they extract coal from the surrounding areas near and along the new highway alignment. Regulatory agencies are more willing to allow permits for coal removal if there is a constructive use for the excess material that occurs as a by-product of the removal process. The coal companies participating in this partnership have provided input in determining the alignment of the highway to ensure that it provides good access to coal-rich areas.

While environmental approvals have been obtained for the entire King Coal corridor, the project has been divided into 11 usable and operationally independent sections. They will be built in a planned and phased sequence.

The first phase of the project - known as the "Red Jacket" section - is 8 miles in length and is being constructed at a public cost of approximately $110 million. The Alpha Corporation, a Virginia based coal company, is removing coal and constructing the highway foundation. The coal companies have contributed rights-of-way and a large portion of the construction activities themselves. It is estimated that this arrangement has resulted in a 50 percent cost savings. The Red Jacket section forms a portion of the first usable section of the King Coal corridor.

The project is a partnership among WVDOT, private enterprise, a local redevelopment authority, and FHWA.

Cost

$1.5 - $2.3 billion (entire 90-mile facility)

$110 million (Red Jacket section)

Funding Sources

West Virginia Division of Highways - $110 million

Other sections are currently being considered that may have even more favorable public-private cost-sharing arrangements.

Project Delivery / Contract Method

Special negotiated agreement

Private Partner

Design-builder: The Alpha Corporation

Equity contributor: Private coal companies

Project Advisors / Consultants

N/A

Lenders

Not applicable

Red Jacket section under construction.

Other sections in various stages of planning, design or construction.

Financial Status

Red Jacket section funded. Other sections seeking funding arrangements.

Red Jacket section under construction.

Other sections in various stages of planning, design or construction.

Innovations

• Mining companies are placing excess material generated by coal mining activities in designated areas to create the roadbed for the future highway. This will save an estimated $150 million out of the total anticipated construction cost of the 90-mile corridor and also accelerate the completion of the project. The start date for the Red Jacket section was accelerated to 2004 from 2009, and the construction schedule is shortened by at least one year.
• The King Coal partnership approach provides a potential model for other transportation projects, including the Coalfields Highway in Virginia and other projects in Ohio and Kentucky. Coal companies find it advantageous to agree to build the highway for the government as a part of broader mineral removal operations. The highway itself is considered to be a constructive public benefit that, in part, serves to justify permitting the coal extraction. The agreement for the Red Jacket section included innovative financing provisions based on the estimated value of the coal to be extracted. It established a cost sharing plan where the state and federal governments agreed to provide funding, but that the public subsidy would be reduced in the event that the price of coal increased. In the end the Red Jacket section will likely be completed at $90 million, the lower end of the agreed upon subsidy due to the dramatic increases in the cost of coal.

Related Links / Articles

King Coal Highway Official Site

Contacts

Tom Smith
Federal Highway Administration
West Virginia Division Administrator
700 Washington St. E.
Charleston, WV. 25301
Tel: (304) 347-5928
Thomas.smith@fhwa.dot.gov