pennsylvania public-private transportation partnerships (p3)overview
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www.P3forPA.com www.P3forPA.pa.gov
Pennsylvania Public-Private Transportation Partnerships (P3)
Pennsylvania Department of Transportation
Michael Bonini, Director Pennsylvania Public-Private Transportation Partnerships Office
www.P3forPA.com
What is a P3 Project?
• A P3 project is a contractual agreement between a public entity and private entity that:
– Transfers responsibility of a facility’s engineering, construction, operation and/or maintenance to the private sector for a defined period of time;
– Allows the private sector to perform by contract a service previously provided by the public sector; and
– Ensures the private firm receives payments either from existing revenue sources or through the collection of new tolls or user fees.
www.P3forPA.com
Goals of Public-Private Partnerships
Accelerate the delivery of transportation projects
Deliver on-time, on-budget projects at rates higher than traditional delivery
Access private sector skills and innovation
Leverage private investment to enable major projects (maximize tax dollars)
Shift key risks to private sector (away from taxpayers)
www.P3forPA.com
P3s are about Creating Value for Both Parties
Public Sector Shared Private Sector
• Monetize non-core services to generate upfront payment
• Partner to share risk • Access to markets with traditionally high barriers to entry
• Opportunity to reset stakeholder objectives
• Access to public and private funds
• Pre-established client base
• Frees up resources and increases capacity for other projects
• Leverage partner’s market access
• Relatively less competitors in the market
• Creates competition and transparency
• Reallocation of expertise and responsibilities
• Leverage existing expertise to improve asset value and return
• Utilize private sector expertise • Contractually defined deadlines and terms to mitigate uncertainty in deal
• Long-term, relatively predictable revenues
• Potential improvements in asset value and operational efficiencies
• Value driven pricing • Potential benefits from tax and other credits
• Alternative to traditional financing methods
• Transparency in all phases of project
• Building firm brand on large scale projects
www.P3forPA.com
Key Ingredients to a Successful P3
www.P3forPA.com
• Authorizes private entities to develop and operate qualifying transportation facilities
• Allows for solicited and unsolicited proposals
• Allows public and affected jurisdictions to comment on candidate projects
• Encourages investment by private entities
• Enables procuring agency not to be required to accept lowest price offer
Act 88: P3 Enabling Legislation
www.P3forPA.com
• The Act provides for an array of project delivery methods ranging from predevelopment agreements through a concession allowing a “Development Entity” to design, build, operate, maintain, manage or lease a transportation facility
– The Act also allows for “any other innovative or nontraditional project delivery method”
• Act 88 requires RFP’s as the source selection mechanism for P3 projects
– Sole-source procurements are not authorized
Act 88: P3 Enabling Legislation
www.P3forPA.com
• The successful offeror for a P3 RFP is awarded a “Public-Private Transportation Partnership Agreement” (PPA) for the subject transportation project. Of particular note:
– the terms of a P3 agreement can extend for up to 99 years
– user fees for the subject transportation facility are authorized
– ownership of the transportation facility must lie with the “proprietary public entity”
– public bargaining unit covered employees displaced by the P3 project must be offered employment with the development entity on terms essentially identical to those in the relevant CBA for its duration
– any net proceeds realized by the proprietary public entity are reserved for use in transportation projects in the Commonwealth
Act 88: Interesting Facts
www.P3forPA.com
P3 Office Overview
www.P3forPA.com
■ The Board can consider both solicited and unsolicited projects
■ PennDOT provides the resources, staffing and professional services to support the Board’s operations
P3 Board Members
PennDOT Secretary Leslie S. Richards, Chair
Honorable Randy Albright Secretary of the Budget
Honorable Gregory Davis
Honorable Ronald Drnevich Honorable Ryan Boyer
Honorable Steve Santarsiero President pro tempore of the Senate Appointment (Vacant)
www.P3forPA.com
• Meet annually
• Adopt Guidelines establishing the procedures for transportation projects to be considered
• Evaluate, and where the board finds that the requests or plans for projects are in the best interest of the Commonwealth, approve the requests or plans for transportation projects
• Submit an annual report to the General Assembly
P3 Board Duties
www.P3forPA.com
PennDOT P3 Program
Act 88 Signed into Law (July 2012)
P3 Office Established (August 2012)
P3 Board Approves Guidelines
(January 2013)
P3 Board Approves First Projects
(January 2013)
P3 Office Implements Approved Projects (2014-current)
www.P3forPA.com
Current P3 Projects
www.P3forPA.com www.P3forPA.pa.gov
CNG for Transit Agencies
Pennsylvania Department of Transportation
www.P3forPA.com
• Provide cost-effective CNG fuel availability to enable transit
fleets to switch from diesel and gasoline to CNG
• Generate operational cost savings for transit agencies
• Reduce greenhouse gas emissions
• Deliver operational, maintenance and safety expertise
• Establish consistency between transit agencies for the
deployment of CNG fueling infrastructure
• Provide retail CNG fueling to the public, where feasible
CNG: Project Goals & Objectives
www.P3forPA.com
• PennDOT is seeking a turn-key solution which includes (what we’re going to get):
Design and construction of fueling stations and necessary facility upgrades
Upfront private-sector investment
Ongoing operation and maintenance responsibility for fueling stations
CNG: Project Delivery
www.P3forPA.com
CNG: Location of Fueling Stations
CNG Readiness Date
Tier 1 Fall 2016 – Spring 2017
Tier 2 Spring 2017 – Summer 2017
Tier 3 Fall 2017 – Spring 2021
www.P3forPA.com
CNG: Shortlisted Proposers
• Clean Energy - Newport Beach, CA
Pennoni Associates – Philadelphia, PA
• GP Strategies - Escondido, CA
L.R. Kimball - Ebensburg, PA
McCrossin - Bellefonte, PA
• Trillium CNG – Salt Lake City, UT
Larson Design Group - Williamsport, PA
www.P3forPA.com
CNG: Next Steps
• Technical Proposals due: 01/14/2016
• Financial Proposals due: 02/04/2016
• Announcement of Preferred Proposer
anticipated soon
www.P3forPA.com www.P3forPA.pa.gov
AMTRAK Station Improvement Keystone Corridor, Middletown Station
Pennsylvania Department of Transportation
www.P3forPA.com
Project Overview • Not in P3:
– Track/Platform work
– Station (Towers/Ped Bridge)
Middletown Station: Project Overview
• P3 Components:
– Design, Build, Finance, Maintain
– Parking
– Transit Oriented Development (TOD)
www.P3forPA.com
Why P3? • Provides Framework:
– Leverage Existing Funding
– Minimize O&M Risks/Costs
– Maximize TOD Opportunity
• Best Value Selection:
– Price
– Technical Approach
– TOD Development
Why P3?
www.P3forPA.com
Draft Conceptual Rendering – 11/24/2015
www.P3forPA.com
Draft Conceptual Rendering – 11/24/2015
Potential TOD
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AMTRAK Stations Improvement Project
Draft Conceptual Rendering – 11/24/2015
www.P3forPA.com
AMTRAK Stations Improvement Project
Draft Conceptual Rendering – 11/24/2015
www.P3forPA.com
AMTRAK Stations Improvement Project
Draft Conceptual Rendering – 11/24/2015
www.P3forPA.com www.P3forPA.pa.gov
Northampton County P3 Bridge Renewal Program
Pennsylvania Department of Transportation
www.P3forPA.com
• Enhance Overall Condition of County Bridge Inventory
• Eliminate Structurally Deficient Bridges
• Reduce Quantity of Functionally Obsolete Bridges
• Improve Inventory’s Bridge Sufficiency Ratings
• Address Safety Needs
• Remove Weight Limit Postings
• Exceed Traditional Delivery Schedule
Northampton Co. Project Overview
www.P3forPA.com
REPLACE REHAB
STRUCTURALLY DEFICIENT
7 1
FUNCTIONALLY OBSOLETE
14 4
AGED BRIDGES
7 1
TOTAL 28 6
Northampton Co. Project Overview
www.P3forPA.com
Northampton Co. Project Locations
Northampton County
www.P3forPA.com
Northampton Co. P3 Process Outline
1
• Proposal is submitted to P3 Office/Steering Committee for review
2 • P3 Board Review/Approval
3 • County Authority Issues RFP
4 • County Authority Proposal Review and Selection
5 • County Authority Executes P3 Transportation Partnership
6 • Design and Construction
www.P3forPA.com www.P3forPA.pa.gov
Rapid Bridge Replacement
Pennsylvania Department of Transportation
www.P3forPA.com
RBR Project: Overview
• Rapid Bridge Replacement Program (RBRP) is the first P3 project for the Commonwealth of PA
– Project was approved by the Commonwealth’s Public Private Transportation Partnership Board in September 2013
• Project includes the design, demolition, construction, financing and routine maintenance/ lifecycle maintenance for 558 structurally deficient bridges across Pennsylvania (geographically dispersed)
www.P3forPA.com
RBR Project: Snapshot
www.P3forPA.com
Authority Pennsylvania Department of
Transportation
Consortium Plenary Walsh Keystone
Partners
Financial Close March 2015
Substantial
Completion
December 2017
Status Construction
Total D&C Cost US$899 million
Design-Builder A joint venture of Walsh
Construction Company and
Granite Construction Company
O&M Provider Walsh Infrastructure Mgmt.
Equity
Provider
Plenary Group (80%), Walsh
Group (20%)
www.P3forPA.com
RBR Project: P3 Arrangement
• Transaction Highlights:
– 1 DBFM Contract
– PennDOT maintains ownership, but the Development Entity is responsible for maintaining each bridge for 25 years after replacement
• 28 Year Contract (w/ 25 year maintenance term per bridge)
www.P3forPA.com
www.P3forPA.com
RBR Project: Meet the Team
• Development Entity – Plenary Walsh Keystone Partners
• Lead Construction Firm – Walsh Granite JV
• Lead Design Engineering Firm – HDR
• Lead Maintenance Firm – Walsh Infrastructure Management (WIM)
• Construction Quality Acceptance Firm – TRC
www.P3forPA.com
RBR Project: PennDOT Team
• Kleist / Macioce / McAuley / Thompson
• Project Mgmt Consultant – AECOM / JMT
• Design Review Team - Gannett Fleming
• RoW Acquisitions – Percheron / Highlands
• Executive Committee
• Steering Committee
• PennDOT QA Team Involvement
• Regular District Communications
• District Site Visits
www.P3forPA.com
• Accelerate the replacement of SD bridges
• Maximize efficiencies to deliver more projects
• Minimize the impact to traveling public
• Allocate risks to the party best able to manage them
• Establish P3 as a viable way to get projects done
RBR Project: Why P3?
www.P3forPA.com
RBR Project: Payment Structure
• Payment Highlights:
– Mobilization payment
– Milestone payments
– Availability payments
www.P3forPA.com
RBR Project: Statewide Map of Bridges
www.P3forPA.com
RBR Bridges: Districts 10, 11, 12
By the Numbers:
District 10: 38 bridges - 7 bridges completed in 2015
District 11: 85 bridges - 8 bridges completed in 2015
District 12: 81 bridges - 8 bridges completed in 2015
www.P3forPA.com
RBR Project: Bridge Selection
● Programmatic database screening
● Single spans and some multi-spans
● Full replacements
● Statewide distribution
● Minimal alignment changes
● Limited impacts to utilities, R/W, environmental resources
www.P3forPA.com
RBR Project: Bridge Categories
• Early Completion Bridges
– Construction started in 2015
– Similar to Design/Build, PennDOT provided TS&L, H&H, NEPA, ROW, Utility Clearance, and Permits
– Development Entity performs Final Design
• Remaining Eligible Bridges
– PennDOT provides: Scoping documents, Min Bridge width, detour or staged, and 2 borings per bridge
– Development Entity performs: NEPA, TS&L, H&H, survey, ROW Plan, Permits, and Final Design
www.P3forPA.com
RBR Project: Approach
• What’s different?
– Best Value Selection
– One-on-One meetings
– Construction Involvement
– Maintenance Responsibilities
• Handback
• Useful Life
– Payment Structure
– Noncompliance Regime
www.P3forPA.com
RBR Project: Behavioral Drivers
• Noncompliance point system created to incentivize Development Entity compliance with contractual documents
– Noncompliance points for each occurrence
• Cure Period
• Interval of Recurrence
– Financial impact and point accrual
• Deduction of funds per point
• Points can lead to default
• Unavailability Events
– Financial deductions
• Calendar, Detour, Lane Closure
www.P3forPA.com
RBR Project: Handback Requirements
• Punchlist at “Final Acceptance”
– Department takes over maintenance of signs, delineators, line painting, vegetation, etc.
• Early Handback
– Seeding after growth established 1 year
– Flexible pavements handed back in 5 years
– Must meet our 5 year warranty conditions
• Handback at end of Term
– Condition rating of 7 throughout the Term
– Condition 7 for 98% at end / at least 6 for remainder
www.P3forPA.com
RBR Project: “Game Changer”
• First multi-asset, multi-location P3 project to close in US
• Fastest executed P3 procurement in the US with a 12 month timeline from RFQ issuance to commercial close, and 15 months from RFQ to financial close
• Includes the largest Private Activity Bond financing of a transportation P3 in US history with $721.5 million
• Shares the permitting risk on 558 individual projects
www.P3forPA.com
• 75 Construction NTPs issued
• 58 bridges into construction phase
• 48 bridges replaced and open to traffic
• Bridges built in 6 PennDOT Districts
• 6,762 Design submissions
• 5,212 submissions accepted/approved
RBR Project: 2015 Status
www.P3forPA.com
RBR Project: National Recognition
• P3 Bulletin – Transportation Project of the Year
• Bond Buyers of America – Deal of the Year
• P3 Bulletin – Government Agency of the Year
• Infrastructure Journal – North America P3 Deal of the Year
• ACEC-PA – 2016 Diamond Award
• ENR MidAtlantic – Owner of the Year
www.P3forPA.com
RBR: First Bridge Completed
JV 376
SR 3012, Butler County
Open: 8/27/2015
www.P3forPA.com
RBR Construction Activities
JV 556
SR 2013
Westmoreland County
www.P3forPA.com
RBR Construction Activities
JV 107
SR 44
Lycoming Co
www.P3forPA.com
RBR Project: At the End of the Day…
www.P3forPA.com www.P3forPA.pa.gov
RBR Panel Discussion
Pennsylvania Department of Transportation
www.P3forPA.com
RBR Project: Meet the Panel
• Scott Benjamin – Walsh Construction
• Jim Bintrim – HDR
• Scott Gallaher – TRC
www.P3forPA.com
Panel Discussion
www.P3forPA.com
Questions?