Tag Archives: highway

Major Public-Private Partnership Highway Project Under Consideration in Colorado: Sounds Like Deja Vu All Over Again

15 Jun

Central70Narrow2Dear MoCoGov readers, I am out in the Denver area for work, as I am frequently, and wanted to take the opportunity to bring to your attention an Interstate highway project out here that will, I think, remind you more than a bit of our own I-69 Section 5. In particular, the state of Colorado appears to be on the verge of going down the very same path that Indiana did not only in using a public-private partnership (P3) to build the road, but in using the very same type of P3. I have written about P3s before here.

The setting is a 10-mile segment of I-70 between downtown Denver and the Denver International Airport, a segment that sees over 200,000 vehicles per day. I myself have driven on this segment dozens of times.

The Central 70 Project

First, a little bit about the project, which has been named the Central 70, from the Central 70 Project Web Site:

The Central 70 project proposes to reconstruct a 10-mile stretch of I-70 east of downtown, add one new Express Lane in each direction, remove the aging 53-year old viaduct, lower the interstate between Brighton and Colorado boulevards, and place a 4-acre cover park over a portion of the lowered interstate. Construction begins in 2018.

The Central 70 project is quite different from I-69 Section 5 in several key areas. First, it is replacing an aging viaduct that has seen several failures and requires constant repair (http://www.bizjournals.com/denver/blog/earth_to_power/2015/06/cdot-says-i-70-east-viaduct-in-denver-is-crumbling.html). Second, it is adding 2 tolled express lanes, one in each direction. This appears similar to where Indiana is going with expansion of I-65 and I-70.

From an engineering perspective, the most fascinating aspect of the project is the creation of a 4-acre park over a lowered section of the highway (referred to as a “partial cover” in project documents). Here is a rendering from the environmental documents:

POITRA Visual photosimulation services -- I-70 East EIS Project

Proposed 4-Acre Park Over Below-Grade I-70

Ownership and maintenance of the park will be shared between Denver and Denver Public Schools, and in particular part of it will serve an adjacent elementary school (https://www.codot.gov/projects/i70east/fact-sheets-8-2.16/highway-park-and-design_eng-021417v3.pdf). Personally, I absolutely love the concept. I find it exciting and audacious, but I suspect that many will find it equally horrifying!

 

solidarityAs you might imagine, resistance from many residents to the highway expansion, which has been estimated to triple the highway’s footprint, has been stiff. See here and here for examples. The slogan “Ditch the Ditch” has been adopted by the opponents to the project.

The Federal Record of Decision (ROD) for the Central 70 project was issued in January of 2017, allowing Colorado Department of Transportation to move ahead with the project. The ROD and other environmental documents are available here: http://www.i-70east.com/reports.html.

The P3

But while the project is superficially quite different in many ways, the procurement vehicle will seem quite familiar to southern Indiana residents. Colorado has decided to pursue a particular form of public-private partnership: the Design-Build-Finance-Operate-Maintain model, the very same model used (and in the process of being abandoned) for I-69 Section 5.  In this model, the private contractor not only designs and builds the road, but also finances the project, operates the road (and in the case of Central 70 the tolling component), and maintains the road for the entire period of the agreement. Some of the more cynical among us refer to this model as a construction project hidden inside a maintenance contract, that allows politicians to do big projects while being able to say that they are not taking on debt. Supporters say that it is the only way to close the “infrastructure gap” and maintain a sustainable debt load (I mentioned that argument a few days ago here).

The private contractor will be compensated through a toll concession (of course not part of the I-69 Section 5 deal) along with so-called “availability payments”, periodic payments for having the road open to the specified level of service (which is a central feature of the I-69 Section 5 project).

The Central 70 project is also using a (seemingly identical) multi-stage process, in which four teams have been selected to submit final proposals. The following chart from the project Web site shows the four teams selected to submit proposals. You can see a similar chart for I-69 Section 5 here: I-69 Section 5 Actual Proposers.

Screenshot 2017-06-15 06.15.55

Teams Selected to Submit Proposals for the Central 70 P3

Fortunately Isolux-Corsan does not appear on this list! But many of these company names will sound very familiar. Plenary Group was one of the proposers for I-69 Section 5, as was Meridiam. AECOM and Parsons Brinckerhoff were on I-69 teams as well as design contractors. And Spanish infrastructure giant Cintra will be familiar to local readers as one half (along with Macquarie, who did the financial justification for the P3 for the Central 70) of the now bankrupt Indiana Toll Road Concession Company.

Per the Request for Proposals, the High-Performance Transportation Enterprise (HPTE), the public entity that will actually be awarding the contract, is willing to issue up to $725M in private activity bonds (PABs). Per the Federal Highway Administration, PABs are:

…debt instruments authorized by the Secretary of Transportation and issued by a conduit issuer on behalf of a private entity for highway and freight transfer projects, allowing a private project sponsor to benefit from the lower financing costs of tax-exempt municipal bonds.

These bonds do not obligate the state or pledge the “full faith and credit” of the state.

I-69 Section 5 used a similar financing method, having issued almost $244M of PABs to I-69 Development Partners (the prime contractor). These bonds have been continually downrated, and were most recently downgraded by Standard & Poor to a CCC- rating. Recently, as the partnership has been collapsing, it has been reported in the media that the State of Indiana has been negotiating with bondholders to buy back the bonds and take over the financing of the project; thus far the bondholders have rejected the state’s offers.

At this point, it appears that the intention is to make the award during the summer of 2017, with commercial and financial close by October 2017, and construction beginning in 2018. This is an important project of regional and even national significance. I love the partial-cover/park concept that reunites neighborhoods long split by I-70. And I really hope the project moves forward (though I don’t look forward to the airport traffic during construction).

But I also hope that the good folks at the HPTE and the Colorado Department of Transportation talk to their friends at the IFA and INDOT. Surely there are some lessons learned?

Updated 2017-06-16 4:00PM: The State of Indiana just announced that they have an agreement to end the public-private partnership with I-69 Development Partners and take over the project: State has agreement to terminate public-private I-69 contract.

 

 

 

 

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INDOT To Hold Public Meetings on I-69 Section 6

25 Nov

IMG_2375 2I haven’t seen much local publicity about this, so I thought I’d pass it on. INDOT is holding a series of 3 public meetings about I-69 Section 6 (from Martinsville to Indianapolis). Although this section doesn’t pass through Monroe County, residents of Monroe County traveling to Indianapolis certainly have a stake in the route selected. My understanding is that INDOT is planning to have a Record of Decision on the final route for Section 6 (the last section of I-69) by 2018.

INDOT is currently considering the following “preliminary alternatives”:

http://www.in.gov/indot/projects/i69/images/I69_Section6_PreliminaryAlternativesMap.pdf
Here is INDOT’s press release:

The Indiana Department of Transportation will present new details about the five preliminary routes for I-69 Section 6 from Martinsville to Indianapolis during public meetings the week of Nov. 30. The meetings will collect additional public comment to help INDOT refine the five preliminary alternatives down to a smaller number of routes.

The first meeting will take place on Monday, Nov. 30 at Perry Meridian High School, 401 W. Meridian School Rd. in Indianapolis. The second meeting will occur on Wednesday, Dec. 2, 2015 at Mooresville High School, 11 N. Carlisle St. in Mooresville. The third meeting will be held on Thursday, Dec. 3 at Martinsville High School, 1360 E. Gray St. in Martinsville.

Doors will open for all of the meetings at 6 p.m. with an open house session, followed by a formal presentation and public comment session in the high-school auditorium at 7:00 p.m. The public meetings respond to public requests for new details and additional public input following announcement of the five preliminary routes in late June.

The new details will include the potential footprint of the five preliminary routes, including proposed interchanges and local access road locations. The public meetings also will present analysis of how the preliminary routes perform on impacts to the human and natural environments, cost, and the Purpose and Need performance measures. The I-69 Section 6 project team is requesting comments for this phase of the project by Dec. 17. Those comments can be submitted using a web form at www.in.gov/indot/projects/i69/2463.htm and by contacting I-69 Section 6 directly at section6pm@indot.in.gov or 317-881-6408.

The public can also visit the I-69 Section 6 project office located at 7847 Waverly Road, Martinsville, IN 46151. The office is open MondayFriday from 9 a.m. to 4 p.m. and will be closed on state holidays.

With advance notice, INDOT can arrange accommodations for persons with disabilities and/or persons requiring auxiliary aids or services such as sign language interpreters, readers and large print materials. In addition, accommodations may be made for persons with limited English speaking ability requiring language interpretation services. Should accommodation be needed in regards to the attendance and participation during the open house, and/or access to project related documents, please contact the INDOT Office of Public Involvement at (317) 232-6601 or via e-mail rclark@indot.in.gov.

Progress on Harmony Road Bridge on I-69

26 Jul

The HT published an article this morning (“INDOT confident Section 4 of I-69 will open by the end of 2015“), which probably came as a surprise to a lot of people, including myself, who have seen Section 4 (the section running from Crane up to south of Bloomington) looking pretty much like a dirt road even very recently. So I decided to stop by this morning and visit what is probably the most technically challenging part of I-69 Section 4 in Monroe County — the Harmony Road bridge — and was surprised to see how far along things were.

Although the bridge isn’t finished, the prestressed concrete structural elements are all in place, and I had no problem walking across it. The contractors are in the process of excavating what appears to be about another 30 feet of earth beneath it. And the main line of the highway to the west is already paved.

IMG_2386 IMG_2388 IMG_2389 IMG_2390 IMG_2384 IMG_2385 IMG_2380 IMG_2381 IMG_2383 IMG_2375 2 IMG_2377 IMG_2378 IMG_2379  IMG_2374 2

This has been probably the most disruptive road closure in the whole project so far; I’m sure the residents will be very glad to have Harmony Road finished and open again!

Next week I’ll try to make it back down to Black Ankle Creek in Greene County, which is probably the longest bridge in the whole highway.

Winning and Losing Teams for I-69 Section 5 Released

21 Feb

logoYou have probably already heard in the media about the selection of a winning proposal to design, build, operate, maintain, and finance Section 5 of I-69. However, you probably haven’t seen all of the winning and losing teams yet!

This past Wednesday, the Indiana Finance Authority preliminarily announced the winning bid to design, build, operate, maintain, and finance the construction of Section 5 of I-69, 21 miles of highway from Bloomington to Martinsville. I-69 Development Partners, led by prime contractor Isolux Infrastructure Netherlands B.V. from Spain, was selected as the preferred proposal.

The winning proposal would design and build the highway for $325M. The state will pay $21.8M per year over a period of 35 years (minus any penalties for non-performance), which will cover not only the design and construction, but also all maintenance and operation, including snow and ice removal, repair, resurfacing etc. for the entire 35-year term of the contract. In the form of public-private partnership used for this contract, the contractor provides the financing for the project. However, unlike most arrangements in which the contractor provides the financing for an infrastructure project, this project will not be a toll-road.

The full press release from the Indiana Finance Authority can be found here:

More interesting than the press-release, however, is the full list of proposing teams, including all of their subcontractors.  In all, there were 4 teams proposing, all with very generic names: Connect Indiana Development Partners, Plenary Roads Indiana, WM 1-69 Partners, LLC, and I-69 Development Partners. Each team consists of an “equity member” (essentially a prime contractor) and over a dozen partners and subcontractors, including construction, design, environmental, operations and maintenance, etc.

The actual contract has not yet been released to the public; however, according to the Indiana Finance Authority, “portions of the preferred proposal” will be posted on its website next week. You can be sure that MoCoGov will be watching!

I-69 Section 5 RFP Hits the Streets

24 Oct

The Request for Proposals (RFP) for the design, construction, operations, maintenance, and financing (Design-Build-Operate-Maintain-Finance), in the official procurement jargon, just hit the streets a few days ago. Procurement documents, including all of the technical standards for construction, can be found here: I-69 Section 5.

The Final Environmental Impact Statement (FEIS) and Record of Decision (ROD) for Section 5, which provides all of the background, maps, interchange details, costs, assessed alternatives, etc., can be found here: I-69 Section 5 FEIS and ROD.

In particular, the RFP states that:

the successful Proposer (the “Developer”) shall develop, design, construct, finance, operate, and maintain the I-69 Section 5 project. The I-69 Section 5 project consists of upgrading approximately 21 miles of existing State Route 37, a four-lane median divided highway, between Bloomington, IN and Martinsville, IN to an interstate highway (the “Project”).

The Final Request for Proposals was issued 2013-10-15. Proposals are due 2014-01-21. INDOT anticipates making an award on or round 2014-02-19.

As a reminder, Section 5 goes from State Road 37 in Bloomington, IN and extends north approximately 21 miles to SR 39 in Martinsville, IN:

I-69 Section 5 Map

I-69 Section 5 Map