The US Department of Transportation (USDOT) has approved a loan of $422m for Virginia, to aid construction of a new Midtown Tunnel and rehabilitate other tunnels, to provide congestion relief.

As part of the estimated $2.1bn project, the Virginia Department of Transport (VDOT) will utilise the loan amount for constructing a new two-lane 1,700m-long submerged tunnel, as well as maintain and improve the existing Midtown Tunnel and two Downtown Tunnels in Norfolk and Portsmouth.

US Transportation Secretary Ray LaHood said President Barack Obama called on the state to invest in transportation systems which are built to last.

"Virginia is doing just that by investing in this key infrastructure project that will create jobs, reduce commute times and support our economic competitiveness," LaHood said.

The remaining amount of the project is for an extension of the MLK Freeway, including a partial interchange to provide an additional connection.

Federal Highway Administrator Victor Mendez said: "The project is a much-needed transportation investment which will provide jobs in the immediate future to help make the area more productive and contribute to economic growth."

VDOT will accomplish the project through a public-private partnership with Elizabeth River Crossings (ERC), which will finance, design, construct, operate and maintain the tunnels under a 58-year concession term.

As part of ERC, Skanska will invest up to $136m, including contingent equity, for the financing, design, construction, operation and maintenance of the Downtown Tunnel / Midtown Tunnel / MLK Extension Project in Norfolk and Portsmouth. Construction of the project will begin immediately and is expected to be completed by August 2018.