Public Private Partnerships Case Studies

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Public Private PartnershipsCase Studies
Jim HatterInnovative Finance Technical Service
Team
Federal Highway Administration-National Resource
Center
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Presentation Outline

• Why PPP
• Leasing of Public Assets
• Case Studies
• Summary

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Why Public Private Partnerships?

• Challenges facing the nations highways
• Age and deterioration
• Congestion
• Safety
• Needed capital improvements
• Current investment 68 billion/year National
  Highway System
• Maintain and improve 130-160 billion

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Impact of Inflation
Provided by AAShTO
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Public Private Partnerships
JOSHUA LUTZ / REDUX FOR TIME
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Public Private Partnership (PPP, P3)

• Contractual agreement between public and private
  partners which allows more private sector
  participation than is traditional.
• Alphabet soup construction
• D-B (design-build)
• D-B-B (design-bid-build)
• D-B-F (design-build-finance)
• D-B-O-M-F (design-build-operate-maintain-finance)
  
• Concession
• Long term lease of public facilities to a private
  party the concessionaire

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Partnering More Than Financial Risk

• Share and shift risk
• Private sector expect return for risk
• Public sector Profit is a bad concept
• Public sector adjustment
• Sharing of assets

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Examples of Compensation Provisions
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Public Private Financing

• Case Studies

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Creative Financing Case Study
T495 Capital Beltway HOT Lanes

• 14 mile segment of beltway
• Two HOT lanes each direction
• Variable tolls HOV-3 free
• Replacement of ageing infrastructure (50 bridges)

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Sources Uses of Funds
Includes 19.2 M Contingency Used
Includes 45.8 M Contingency Used
Funded 5 yrs. Post Construction
Includes 65M Contingency Used from TIFIA and
Equity
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TIFIA Debt Service Equity Distributions
T495 Capital Beltway HOT Lanes
Distribution Reserve Release
Assurety Replacement
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Missouri Safe Sound Bridge Program

• Public Private Partnership 400-600 million
• Replacement or rehabilitation of 802 bridges
• 30 year D-B-O-M-F
• 25 year availability payments
• MoDOT Federal-aid bridge funds
• Missouri Bridge Partners
• Zachry American Infrastructure
• Parsons Transportation Group
• Fred Weber Inc.
• Clarkson Construction
• HNTB
• Infrastructure Corporation of America

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Missouri Safe Sound Bridge Program
Responsibilities
Missouri Bridge Partners
MoDOT

• Construction, maintenance, finance
• Pays ROW purchase price
• Pays utilities relocation costs
• Obtains temporary easements
• Draft third-party agreements
• Performs public information
• Provides design design computations
• Participates in bridge ratings

• Makes availability Payments
• Negotiate ROW price
• Review/approve third-party agreements
• Obtain environmental permits
• Verifies completion of milestones
• Performs program wide Public relations
• Conducts bridge inspections ratings

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Port Access ProjectThe Port of Miami Tunnel
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Port AccessImportance of Port

• POM is top international cruise terminal, 10th
  international cargo port based on containerized
  shipments, and top seaport in Florida based on
  dollar volume

• 20.7 billion in imports/exports
• 81,800 jobs
• 5 billion in wages
• 12 billion in economic output

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Port Access Existing truck routes through
Downtown Miami

• Must go through 6 to 7 signals inbound and
  outbound

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Port AccessTruck traffic will increase

• Nearly 5,500 trucks buses travel to/from POM
  through downtown streets
• By 2030, estimated truck traffic
  will nearly double

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Port AccessYears of Planning

• Since 1979, improved access to Port of Miami seen
  as necessity
• Nearly every option explored
• In 1989, FDOT analyzed eight alternatives in
  Project Development Environmental (PD E) study

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Port AccessOption Selected

• Tunnel under main channel of Government Cut
• Roadway work on Dodge and Watson Islands
• MacArthur Causeway Bridge widening

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Port AccessBuilding the Tunnel

• Involves specially-constructed Tunnel Boring
  Machine approx. 42 ft. high
• TBM consists of cutter head and trailing support
  gear
• Excavation will take just over one year6 months
  in each direction

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Port Access FDOT Procurement Schedule

• December 5, 2005 Industry Forum (D-B-O-M-F)
• February 17, 2006 Releases Request for
  Qualifications
• April 12, 2006 Receives Statement of
  qualifications from potential bidders
• April 28, 2006 Announces short-list of bidders
• November 1, 2006 Publishes Request for Proposals
  
• March 5, 2007 Receives proposals from
• 3 short-listed bidders
• May 2, 2007 Best Value Proposal named MAT
  under intent to award subject to local
  funding
• Next Step MAT (Miami Access Tunnel)
• Contract execution

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Port AccessTunnel PPP Agreement

• 35-year agreement between FDOT concessionaire
• FDOT begins availability payments once tunnel
  opens, adjusted for inflation
• Estimated to be 2012
• Payment subject to reduction if tunnel not
  operational during required hours
• Tunnel will be returned to FDOT in first-class
  condition at end of contract

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Port Access Project Capital Cost

• Top Ranked Proposal capital and related cost -
  665 million
• 150 million for risk reserve for geology risk
  and related items
• 50 million for project inspection
• Total capital cost - 865 million (FDOT cost
  estimate at 1.2 billion)

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Port Access Construction Schedule

• Upon execution of Concession Agreement, FDOT will
  issue a Notice to Proceed design
• MAT will have nine-month period to begin
  construction
• In RFP response, MAT stipulated a 47-month
  construction schedule
• MAT must meet defined construction period

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Port Access Construction Schedule

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Port AccessFunding the POMT

• FDOT contributing 50 of capital cost (432.5
  million) from Strategic Intermodal System (SIS)
  funds
• Local partners must match capital costs
• FDOT funding tunnel Operations Maintenance from
  statewide maintenance funds (about 200 million
  over 30 years)

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Port AccessFunding the POMT

• Cash Flow
• 100 million during construction
• 350 million upon POMT completion
• Remaining in annual availability payment
• Covers both remaining capital and annual
  operations and maintenance costs
• Proposal at 33 million in 2007 dollars (FDOT
  estimate at 68 million)
• Amount will adjust based on annual inflation

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In Summary

• USDOT SAFTEALU support PPP
• PPP is not for every Project
• Educate the Public
• www.fhwa.dot.gov/ppp
• Manuel for using PPPs
• PPP Toolkit

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Questions