Articles Posted in Public-Private Partnerships (PPP)

Posted
by

Tappan Zee Bridge.jpgWhen we posted yesterday about the RFP for the Tappan Zee Bridge replacement, we perhaps missed the most important aspect of the Instructions to Bidders: No Obligation to Award. (It’s on page 40, for those keeping track.) Usually this sort of provision is a safety valve. Here, it might be more. The owner apparently still doesn’t know where the money will come from. Bloomberg is reporting that a bill is working its way through the New York Legislature to allow Public Private Partnership funding for . . . the Tappan Zee Bridge Replacement.

Posted
by

On March 8, 2012, the Indiana Finance Authority (IFA) issued a RFQ to design, build, finance, operate and maintain a tolled bridge facility and associated roadway and facilities (the “East End Crossing”) through a public-private partnership agreement. If this piques your interest, the Statements of Qualification are due April 9, 2012.

Continue Reading ›

Posted
by

You could be forgiven if you’ve missed some of the news concerning the new Tappan Zee Bridge project. This project is very much on Governor Cuomo’s front-burner and is moving right along at an impressive pace. Here is the Reader’s Digest version of some (relatively) current events.

In February, four groups consisting of the usual suspects were short-listed to design and build the new span. In a strange twist of fate, one of the short-listed groups includes Dragados which now employs the same Chris Ward who reportedly butted heads with Gov. Cuomo during his time as the Executive Director of the Port Authority.

Meanwhile, back in Albany, the State engaged consultant Jeffrey A. Parker & Associates, Inc. to figure out how to pay the $6 billion price tag. The State has requested $2 billion from the Federal Department of Transportation pursuant to the Transportation Infrastructure Finance and Innovation Act (TIFIA). So, assuming the feds allocate the requested $2 billion (a better bet than an Atlantic City slot machine given President Obama’s selection of the new bridge as one of fourteen projects to receive accelerated environment review – and Mr. Cuomo’s political affiliation), Mr. Parker must close a $4 billion funding gap. The administration has mentioned using pension fund investments, bonds and toll revenues. But, unless I missed something, nobody has officially suggested toll increases – yet.

Posted
by

The construction industry is abuzz with talk of alternative funding mechanisms, specifically Public-Private Partnerships, aka PPP, aka P3s. The AGC PPP Task Force recently developed a White Paper to outline issues that contractors will confront with PPPs.  Contractors should be knowledgeable about PPPs – not just from a contractor’s perspective – but also from an entrepreneurial perspective.

As noted recently by our colleagues in Pillsbury’s Global Sourcing group:

“PPPs, if managed well by both SLGs [State and Local Governments] and service providers, can offer significant benefits to both parties, and ultimately the public-at-large. Realizing this potential will require changes in paradigms and behaviors on both sides of the table (SLGs acting more like businesses; service providers acting more like entrepreneurs). Those who are ready to embrace the future will be well-positioned to catch this building wave.”

The full article can be found here.  Are you in the best position to “catch the wave”?

Posted
by

Chances are, you get your water from a public drinking water system, even though approximately two thirds of drinking water systems in this country are non-community systems — think campgrounds and schools. And the chances are that the system that provides your water needs an upgrade. The American Society of Civil Engineers has produced the second in a series of reports grading America’s infrastructure and has given the United States a grade of “D” for its water systems. You can see an executive summary of the report here and you’ll be able to download the entire report when it is released on December 16 at the ASCE’s website.

The water systems graded include systems for drinking water, and also water for industrial processes sewage systems. The report highlights the need for major investments in our country’s water systems infrastructure and the numbers are staggering. In 2010, the country needed to spend $91 Billion but only spent $36 Billion. That gap is expected to get worse, rising to $84 Billion in 2020 and then $143 Billion in 2040.

Good thing we have lots of extra tax dollars to spend. Oh wait. We don’t. Maybe PPP’s are the solution.

Posted
by

Virginia announced a $940 million dollar P3 agreement with Flour-Transurban. The agreement calls for the construction of a 29 mile hot lane to ease the Virginia’s traffic congestion, especially during rush hour.

The agreement calls for Fluor-Transurban to pay $843 million and Virginia to $97 million. Most of the current lanes will be toll free, as will be HOV-3 vehicles. Other vehicles will pay a toll that will vary in amount depending on the volume of traffic.

The Agreement’s Key aspects include:

  • Fluor-Transurban will design and build the facility; manage and fund all operations and maintenance for a period of 73 years following construction. It will also share revenue with the Commonwealth.

  • Maintain free access for High Occupancy Vehicles (HOV) meeting state eligibility requirements and buses.

  • Develop and operate a dynamic tolling system. Tolls will vary based on demand to provide fast, reliable travel times.

  • All tolls will be paid with an E-ZPass and there will be no toll booths.

  • Electronic signs will alert travelers to current toll rates so they can make an informed choice whether or not to use the HOT Lanes.

  • Return the asset to the Commonwealth in good working order at the end of the agreement

Link to news release

The agreement is the latest in Virginia’s foray into the P3 delivery method to meet a public need by partnering with the private sector.

Posted
by

A funny thing happened at a recent ENRNewYork infrastructure conference titled Where’s the Money? — they found some. During a panel discussion concerning infrastructure financing, both Robert Dove, Managing Director, The Carlyle Group and Christophe Petit, President, Star America Infrastructure Partners, told the large audience that they had “money to spend” on infrastructure projects. Indeed, both men suggested that they were eager to find an infrastructure project in which to invest.

Interestingly, both men were looking for very different project profiles. Mr. Dove stated a desire to invest in brown field projects only, whereas Mr. Petit wants green field projects. Given the amount of money these two men represent, there is a very attractive opportunity for the promoter of the right project.

In light of this and the money Presidents Obama and Clinton have pledged to raise for infrastructure projects (see Michael McNamara’s 11/5/11 entry), perhaps some should be saying Show me the Project!!.

Posted
by

If you build it, they will come. But what if someone else built it first? We just might find out the answer to that question if Guatemala goes forward with its new president’s plan to build a canal connecting the Atlantic and the Pacific Oceans. You can read about it here.

Presumably Guatemala is aware of the fact that Panama is currently building a third set of locks that will significantly expand its capacity. You can read about that here.

So Guatemala won’t just compete with the Panama Canal we all know and love; it will compete with a new and improved Panama Canal.

Perhaps it’s no surprise that Guatemala’s president proposes to build its new canal as a Public Private Partnership. That likely means that it won’t get done unless the marketplace determines that the canal would generate enough income to pay for its construction.