Acting as traffic and technical advisor for the Elizabeth River Crossing sale during COVID-19

The Elizabeth River Crossing concession operates the Midtown and Downtown Tunnels between Norfolk and Portsmouth, Virginia. Starting in early 2020, the owners of the concession company began a sale process. Prior to the formal launching of the sale, COVID-19’s impact on traffic and revenue began and complicated the future outlook of the concession.

How we helped

Steer served as the sell-side Traffic and Technical Advisors. As traffic advisor, we developed econometric and network models to forecast future traffic and revenue levels under normal conditions. We then applied adjustments to our forecasts to account for COVID-19 in both the short-term and long-term. For the short-term, we used our econometric models and actual economic performance during COVID-19 to identify the evolution of a “containment” impact and extended the impact through a recovery trajectory. For the long-term adjustment, we input post-COVID-19 economic forecasts into the econometric models.

As Technical Advisor, we reviewed information from the concession management and combined with the traffic forecasts to establish the future cost outlook.

Successes and outcomes

We packaged our analysis into vendor reports that were shared with potential bidders at the start of the sale process. We then participated in management presentations to describe our work and answered questions from potential bidders. We remained engaged with potential bidders and their advisors up until the bid date in the fall. The process led to a successful sale transaction that was announced in November, 2020.