Florida’s Public -Private Partnerships Leon Corbett Project Finance Manager Southern Legislative Conference Webinar December 16, 2014 2
Florida P3 Legal Framework Early Adoption of Strong Legal Framework Ensures Creditworthiness • Authority for availability payment deals introduced in 2007 statutes • 15% of federal and state funding cap, cost effectiveness analysis • Availability payments are prioritized ahead of new capacity projects • Further controls introduced in 2012 • Approval by Governor following Legislature review • Inclusion in State Transportation Trust Fund debt assessment • Additionally, portions of P3 payments are included in the Division of Bond Finance annual Debt Affordability Report 3
Florida P3s Florida’s Use of P3s Ongoing Since 2007 UNDER CONSTRUCTION SR 9B - $95M (DBF) UNDER CONSTRUCTION UNDER CONSTRUCTION I-95 - $126M (DBF) SR 79 - $99M (DBF) UNDER CONSTRUCTION UNDER CONSTRUCTION I-4 Ultimate - $2.3B* (DBFOM) US 19 - $119M (BF) COMPLETED COMPLETED I-95 at Pineda - $200M (DBF) I-4 Connector - $428M (BF) IN OPERATIONS I-595 - $1.2B* (DBFOM) UNDER CONSTRUCTION I-75 N of SR 80 to S of SR78 - $72M (DBF) COMPLETED COMPLETED I-95 Express Lanes - $139M (DBF) I-75 (IROX) - $458M (DBF) UNDER CONSTRUCTION Palmetto Section 5 - $566M (DBF) COMPLETED US 1/SR 5 - $114M (DBF) COMPLETED * construction portion IN OPERATIONS Palmetto Section 2 - $192M (DBF) BF – Build Finance DBF – Design Build Finance Port of Miami Tunnel - $663M* (DBFOM) 4 DBFOM – Design Build Finance Operate Maintain
Florida P3 Track Record P3 Structure an Important Financial Tool in Tool Box Project Type Contract Substantial Estimated Years Design and Executed Completion Advanced Construction Cost I-595 DBFOM March 2009 March 2014 15 years $1.2B Port of Miami DBFOM October 2009 August 2014 Undetermined $663M Tunnel I-4 Ultimate DBFOM September December 2020 20+ years $2.3B 2014 Other 10 – DBF From 2007 to 5 completed 1 to 5 years $2.6B Projects 2 – BF 2013 5
Florida P3 Value Proposition DBFOM P3 Seeks to Achieve 5 Primary Goals • Transfer Risk • Reduce Cost • Accelerate Project Timetable • Secure Additional Financing • Leverage Private Sector Innovation 6
I-4 Ultimate Project Scope $2.3B Project Brings Innovation to Relieve Congestion • 21 Miles from west of Kirkman Road to east of State Road 434 • Increases capacity by adding 4 tolled Express Lanes • 6 General Use Lanes + 2 Auxiliary Lanes • Reconstructs 15 major interchanges • Widens 13 bridges, adds 53 new bridges and replaces 74 bridges 3 General Use Lanes 3 General Use Lanes plus Aux Lanes plus Aux Lanes 7
I-4 Ultimate P3 This Project Is a Game Changer for Central Florida • FHWA estimates - every $1.0B spent on highway and bridge construction supports 28,000 jobs • Reconstructs aging infrastructure originally built in the 1960s • Reduces congestion by increasing capacity by adding 4 Express Lanes • P3 procurement allows the full project to be built earlier than the traditional method (estimated at 26 years) • P3 procurement delivers high priority projects without deferring other projects throughout the state • Newer design provides a safer interstate reducing crashes and subsequent delays 8
Procurement Overview I-4 Mobility Partners Taking On Key Project Risks • FDOT entered into a 40-year concession agreement that transfers key project risks and “locks - in” costs for design, construction, operations, maintenance, renewal and replacement • Key project risks undertaken by I-4 Mobility Partners: • Design and construction (over 500 designers working in peak) • Coordination with utility owners (1,000 utility conflicts with the project) • FHWA re-evaluation for additional scope items • Changes in costs ( I-4 Mobility Partners had the lowest design and construction cost bid, with the highest bid being about a billion more ) 9
P3 Lessons Learned • Each project is unique • A properly structured deal can be financed, even in the toughest of markets (flexibility is key) • Evaluate cost effectiveness or value for money early in the process • Secure government and community stakeholders’ support • Secure outside experts with P3 experience, build internal expertise across projects • Be transparent, have an interactive process 10
Conclusion Public-Private Partnerships Deliver Value to Florida • P3s allow project advancement by years or decades while still delivering other high priority projects throughout the state • P3s relieve congestion in heavily populated areas in Florida • Additional incentives in P3s to deliver on time/on budget • I-4 concessionaire will be able to deliver additional value to FDOT • Concessionaire, FDOT and federal partners work together to deliver transportation infrastructure solution in efficient, cost effective manner 11
Contact Information Leon Corbett Project Finance Manager Florida Department of Transportation Leon.Corbett@dot.state.fl.us FDOT’s P3 website: http://www.dot.state.fl.us/officeofcomptroller/PFO/p3.shtm 12
F = MA : CSG SLC WEBINAR DECEMBER 16, 2014 J. Douglas Koelemay, Director
VIRGINIA LEADERSHIP IN PUBLIC-PRIVATE PARTNERSHIPS • PPTA enabling legislation adopted 1995; PPEA followed • PPTA implementation guidelines from project to project • Creation of VAP3 office 2010, new industry practices, need for more public engagement drove significant process changes • 2014 – Updated PPTA Implementation Manual & Guidelines • Goal is to build strategic program, extend VAP3 leadership
VIRGINIA P3 LESSONS LEARNED • Permanent office acts as champion, catalyst, guide • P3 leaders and program managers have vision, discipline & imagination; are pragmatic & collaborative by nature • Consistent, detailed guidelines facilitate closure, realization of public benefits • Continuous reviews of assumptions and conclusions improve project decisions • Effective P3 communications focus on benefits produced, broad policy goals advanced • Steady flows of information to agencies, officials, planners, media build understanding and trust • Other states, provinces, countries have good ideas; competition is growing
I-95 EXPRESS LANES PROJECT • Comprehensive agreement with Transurban/Fluor executed July 2012 • Express lanes opened December 14 • Transurban 80-year concession period • Virginia contribution of $71 million leveraged $925 million project • Adds to managed lanes (HOT) system that includes I-495 Express Lanes • Over 100 million users of I-495 Express Lanes in first two years • Virginia’s contribution of $409 million leveraged a $1.7 billion I-495 project • Transurban increased its equity investment in 2014 to bring debt service requirement more in line with revenues
ELIZABETH RIVER TUNNEL PROJECT • Two-lane tunnel connects Hampton and Portsmouth • Parallels existing Midtown Tunnel under Elizabeth River • Includes maintenance, safety improvements for existing Midtown & Downtown Tunnels, extension of MLK Boulevard • VDOT maintains ownership and oversight • Private concessionaire ERC will finance and build facilities, operate and maintain for 58-year period
I-66 MULTIMODAL PROJECT NEXT • Tier 2 EA, preliminary engineering design, data collection underway • Coordination with local stakeholders, agencies ongoing • Brief oversight board (Commonwealth Transportation Board), issue Request for Qualifications (RFQ) early 2015 • Announce short-listed teams mid-2015 • Develop, issue Request for Proposals (RFP) late 2015 • CTB approve selected alternative 2015 • Complete NEPA end of 2015 • Commercial close end of 2016 • Begin construction by 2017
I-66 MULTIMODAL PROJECT Two Express Lanes (convert existing HOV lane and add one lane) • HOV-3 and buses travel free • Non-HOV tolled • Congestion-based tolls • Convert HOV-2 to HOV-3 by 2020,consistent with region’s Constrained Long Range Plan Three General Lanes • Open to all traffic • No tolls • Ramp-to-ramp connections (auxiliary lanes) Rapid Bus Service • High frequency of service beyond peak hours • Travel in express lanes for reliable travel times
2014 PPTA MANUAL & GUIDELINES Positive suggestions from officials, public, businesses, MPOs, legal teams • 100+ responses over a 30-day period • P3 delivery method vital to future transportation projects • Public and stakeholders wanted to improve transparency, competition and accountability Results of 2014 initiative to review and revise Guidelines • Increased CTB (oversight board) involvement • Increased public engagement • Enhanced competition • Increased transparency • Improved risk assessment and management
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