The Virginia Department of Transportation (VDOT) in the US has awarded a contract to Elizabeth River Crossings (ERC) consortium to build a new Midtown Tunnel in Hampton Roads.

The $2.1bn public-private partnership deal also includes rehabilitating the existing Midtown Tunnel as well as the downtown tunnels, and extending the Martin Luther King (MLK) Freeway.

ERC is a joint venture between Skanska Infrastructure Development and Macquarie Group.

VDOT will maintain ownership of the infrastructure while ERC will finance, build, operate and maintain the facilities for a 58-year concession period.

VDOT will extend $362m and ERC will provide financing through a $422m TIFIA loan and about $1.3bn will be met through equity, debt and revenue from operations.

The construction is scheduled to commence in 2012.

Upon completion, the new Midtown Tunnel and the MLK Extension will increase transit service between Portsmouth and Norfolk as well as reduce the average round-trip user about 30 minutes a day.