Indiana I-69 Section 5 Availability Payment Project Closes Financing

On July 23, 2014, the Indiana Finance Authority closed financing on its second availability payment P3 project, the I-69 Section 5 highway project, a 21-mile reconstruction project located outside of Bloomington Indiana, the home of Indiana University.  The project is a component of the I-69 Corridor Project which will strengthen connectivity between the northern and southern portions of the state.  After signing the public-private agreement in April of this year, Isolux Infrastructure, a major Spanish infrastructure company, brought in Infra-PSP Canada, an affiliate of the Public Pension Investment Board, a Canadian crown corporation, to take 49% of the equity in the project development company, the first time an international public pension player has made a direct investment in a US P3 project during the construction phase of the project.  The total equity commitment is approximately $40.4 million. 
 
Total project capital costs are expected to be approximately $370 million; in addition to the private equity commitment, funding is coming from a $243,845,000 tax-exempt private activity bonds issued by IFA with Citi and Jeffries as the bond underwriters.  IFA has committed $80 million in milestone payment payments towards project costs.  After application of the interest-rate risk sharing provision of the agreement, and with the rally in the muni bond market since Isolux submitted its winning bid in January 2014, the final base maximum annual payment decreased by $1.5 million per year.
 
The PABs are comprised of a single short-term serial bond maturing March 1, 2017 and several term bonds with maturities ranging from September 1, 2027-September 2046.  Yields on the term bonds range from 3.98% to 5%.
 
The source of repayment of the PABs is anticipated to be availability payments made by IFA under the public-private agreement as consideration for the private developer designing, constructing, financing, operating and maintaining the project.  The availability payments, which commence on substantial completion of the project, are subject to quarterly deductions if the private developer fails to meet certain performance requirements relating to the availability of the project and compliance with the technical requirements.
 
The project is scheduled for completion on October 31, 2016, which, coincidentally is the same date the East End Bridge project, IFA’s first availability payment P3 project, is scheduled to be completed.

Secretary Foxx and PHMSA Release Much-Anticipated Proposed Rule On Crude By Rail Tank Car Standards

The U.S. Department of Transportation Secretary Anthony Foxx and the Pipeline and Hazardous Materials Safety Administration (PHMSA) today released a much-anticipated Notice of Proposed Rulemaking (NPRM) to improve the safe rail transportation of flammable liquids, including petroleum crude oil and ethanol. 

PHMSA also released a companion Advanced Notice of Proposed Rulemaking (ANPRM) on oil spill response plans, seeking comments on current thresholds and their applicability to rail and a summary of a study finding that crude oil from the Bakken field presents greater danger during transport than other types of crude.

There is much to digest in the three documents. Here is a summary of the key elements of the proposed rule.

The Proposed Rule

The proposed rule is based on an advanced notice of proposed rule making published by PHMSA last September and reflects feedback from more than 152,000 commenters.

Generally - The proposed rule includes options for enhanced tank car standards, a phase-out or retrofit of tank cars not meeting the enhanced standards, an expanded classification and testing program for petroleum crude oil and ethanol (and other mined gases and liquids) and new speed restrictions and braking requirements for trains hauling 20 or more carloads of such flammable liquids (which would be defined as a high-hazard flammable train or “HHFT”).

New Tank Car Standard – The proposed rule contains new standards for tank cars constructed after October 1, 2015 that would be used to transport flammable liquids as part of an HHFT.  A number of variations are outlined in the proposed rule, all of which address thermal, top fittings, and bottom outlet protection, and tank head and shell puncture resistance.  The proposed rule would require an HHFT to be quipped with either electronic controlled pneumatic brakes, a two-way end of train device, or distributed power braking, depending in part on tank car standard adopted.

Sunset of DOT-111s – The proposed rule would phase out the use of DOT-111s, the oldest tank cars in use, over 2 years, unless they are retrofitted to the new tank car standard.

Other Current Tank Cars  – The proposed rule would require other existing tank cars used to transport flammable liquids as part of an HHFT be retrofitted to meet the new tank car standard or operated under speed restrictions for up to five years, depending on the flammable liquids transported.

Speed Restrictions – During the time when use is still permitted, flammable liquids moving in an HHFT not meeting the enhanced tank car standard (which means all HHFTs presently) would be subject to a 40-mph speed restriction, although the proposed rule outlines three different options with respect to the geographic scope of this limit. Tank cars meeting the enhanced specifications (once finalized) would be limited to 50-mph in all areas.

Testing & Sampling Procedures; Routing Analysis; SERC Notification - The rule would expand existing flammable liquid sampling and testing procedures, including changes in test frequency, expansion of sampling points in the supply chain and more comprehensive certification.  It would codify the Rail Corridor Risk Management System as an aid in the determination of the safest and most secure routing for HHFTs. The proposed rule also would codify DOT’s May 2014 Emergency Order, which requires trains containing one million gallons of Bakken crude oil to notify State Emergency Response Commissions (SERCs) or other appropriate state delegated entities about the operation of these trains through their States.

What’s Ahead

Both the NPRM and new spill response planning ANPRM will be open for 60 days of public comment and PHMSA has indicated that does not intend to extend the comment period.

Secretary Foxx said “While we have made unprecedented progress through voluntary agreements and emergency orders, today’s proposal represents our most significant progress yet in developing and enforcing new rules to ensure that all flammable liquids, including Bakken crude and ethanol, are transported safely.” 
 

Supreme Court Grants Certiorari to Review D.C. Circuit Decision Hampering Amtrak's On-Time Performance

On June 23rd, the U.S. Supreme Court granted the government’s Writ of Certiorari to review the decision of the D.C. Circuit that many believe may be hampering Amtrak’s leverage with freight railroads and its on-time performance.

According to Amtrak’s most recent issued Monthly Performance Report (May 2014), end station on-time performance (OTP) is approximately 74 percent so far this fiscal year (which started October 2013) down 12 percent from FY 2013, when the same performance measure finished at 85 percent.

While the particularly harsh winter weather may have been a factor, it could not be the whole story.  In July of 2013, the D.C. Circuit ruled that the provision of the Passenger Rail Investment and Improvement Act of 2008 (PRIIA) by which Amtrak and the Federal Railroad Administration (FRA) jointly established metrics to measure Amtrak’s performance, was an unconstitutional delegation of regulatory power to Amtrak. Congress had directed that the metrics be used to (among other things) measure whether the railroads hosting Amtrak service were meeting their long-standing statutory obligation to give priority to Amtrak trains.  Congress also called for Amtrak and its host railroads to incorporate the metrics into their operating agreements to the extent practicable.

As City Lab’s Eric Jaffe has observed, Amtrak end station OTP dropped dramatically shortly after the D.C. Circuit decision.  “What you're seeing is the aftermath of [the D.C. Circuit’s decision which] severely damaged Amtrak's leverage with the freight rail companies whose tracks it shares.” The decision nullified the metrics and, as Jaffe notes, it “likewise triggered the start of Amtrak's on-time performance decline.”

D.J. Stadtler, Amtrak’s VP Operations, made a similar observation in his testimony before the Surface Transportation Board on April 10, 2014, pointing out that Amtrak “saw an immediate drop in on-time performance across the board that was directly attributable to train handling by the host carriers.”

For the railroad industry, the Supreme Court’s review is of vital importance because it could determine whether the metrics will survive and be used to measure whether (and how well) host railroads adhere to their statutory obligation to give priority to Amtrak trains and be incorporated into the contracts governing Amtrak operations.
 

Speculation Mounts Over Impending Crude By Rail Rule

As speculation over the federal government’s forthcoming rule on rail shipments of crude oil grows, two items hit the press last week increasing speculation over the details of the reforms.  

On July 15, 2014, Bloomberg reported that representatives from the American Petroleum Institute (API) and the Association of American Railroads (AAR) met with the Transportation Department at the Office of Management and Budget on July 11 to present a joint plan for the phase-out of older tank cars.  According to Bloomberg, two people familiar with the proposal, who were not identified, said that “the parties agreed to scrap a fleet of thousands of DOT-111s within three years if manufacturers agree they can replace or retrofit the tank cars in that period.”  Bloomberg’s report did not include the specifics of the proposal and, at that time, neither the API nor AAR responded to requests for comments on the proposal.  As of today, no proposal has been made available on the API or AAR website.

In addition, the Associated Press ran an article entitled “Oil, railroad industries moving faster than regulators on tank cars,” which said: “[r]egulations drafted by the Transportation Department to boost the safety of moving oil by rail are believed to lay out a six-year timeline for scrapping those older, legacy tanker cars. . .”  The AP cited the Bloomberg report noting that “the railroads and the oil industry have reportedly advanced a voluntary plan to replace them within three years.”  

Meanwhile, in a letter to the Administrator of the Pipeline and Hazardous Materials Safety Administration, the CEOs of Union Tank Car and GATX Corporation urged action on rail operations rather than tank car specifications.  According to this Businessweek report, the CEOs told PHMSA that “[t]he quickest and most meaningful way to improve crude-by-rail safety is to approve new regulations regarding railroad operating procedures and classification and testing of flammable liquids,” wrote Union Tank Chief Executive Officer Kenneth Fischl and the CEO of lessor GATX Corp, Brian Kenney. 

One thing is certain amid the speculation, the new rule will have significant impact given the dramatic recent growth in U.S. crude by rail shipments. 
 

President Unveils Build America Investment Initiative Today

President Barak Obama today announced the Build America Investment Initiative (the “Initiative”).  According to the Fact Sheet released by the White House in advance of the announcement, the purpose of the Initiative is to “increase infrastructure investment and economic growth by engaging with state and local governments and private sector investors to encourage collaboration, expand the market for public-private partnerships (PPPs) and put federal credit programs to greater use.”

The transportation industry will be the first to benefit from the Initiative.

The Fact Sheet lays out some of the portions of the Initiative, including a “Build America Transportation Investment Center” (the “Center”) to be housed within the United States Department of Transportation (“US DOT”), envisioned to be a “one-stop shop” for both public- and private-sector parties interested in innovative financing and project delivery for transportation projects; a “Build America Interagency Working Group” (the “Working Group”), to be chaired by Secretary of the Treasury Jack Lew and Secretary of Transportation Anthony Foxx (or designees), to address barriers in private investment in industries including water, ports and harbors, communications, and energy; and an “Infrastructure Investment Summit,” to be hosted by the United States Department of the Treasury on September 9, 2014, intended to bring together federal, state, and local officials with project developers and investors to discuss innovative financing approaches for infrastructure.

After the announcement today, the President signed a Presidential Memorandum that uses the President’s executive authority to set policy related to collaboration on infrastructure development and financing, to articulate the requirements for establishing the Center within the US DOT, and to communicate the parameters for the Working Group.

In particular, the Center is subject to the following conditions:

  • The Center must be established within 120 days;
  • The Center must develop and make available tools useful to the establishment of innovatively financed and delivered projects, including case studies, best practices, and analytical tools;
  • The Center must develop a Web site to serve as a source of information for both public- and private-sector entities interested in transportation financing programs; and
  • The Center must coordinate with the Steering Committee on Federal Infrastructure Permitting and Review Process Improvement to provide technical assistance regarding environmental review.
     

Amtrak and Maryland DOT Plan for Improvements to the Vital Baltimore and Potomac Tunnel Moves to the Public Input Stage

The 141-year-old Baltimore and Potomac (B&P) Tunnel is a major bottleneck on the Northeast Corridor, but Amtrak, the Maryland Department of Transportation (MDOT) and Federal Railroad Administration (FRA) are conducting a study to examine alternatives to improve or replace the tunnel. 

The two-track B&P Tunnel is used by Amtrak, Maryland's MARC Commuter Rail trains and Norfolk Southern freight trains. The track geometry of the outdated tunnel creates a low-speed bottleneck impacting approximately 85 Amtrak trains, 57 MARC commuter trains and one to two freight trains each day.

When the project began last Fall, Maryland Gov. Martin O’Malley said “We're taking the first step toward upgrading rail traffic through this Civil War era tunnel, which will improve passenger rail service along the entire East Coast.”

“The B&P tunnel is a crucial link on the Northeast Corridor making Amtrak and MARC service possible through the city of Baltimore,” said Amtrak President and CEO Joseph Boardman. “As owners and stewards of this vital piece of infrastructure, we know that a new or rehabilitated tunnel is what we need to maintain and ultimately improve reliability, speed and safety for all trains — Amtrak, MARC and others — that use it.”

The $60 million federally funded study will include range of rehabilitation alternatives and options for a new tunnel on new alignment.  The study is moving into a new phase with expanded public outreach and opportunities for stakeholders to learn more about the project's purpose and need and comment on alternatives.
 

Railway Age Crude By Rail Conference Profiles Key Players, Key Issues in Crude By Rail Debate

On June 12 and 13, 2014, Railway Age’s Crude by Rail Conference and Expo brought together representatives from the oil and gas industry, railroads, rail car manufacturers, Federal government, emergency response organizations and Wall Street, to address the implications of the dramatic increase in shipments of petroleum by rail (CBR).

Several informative presentations were made on tank car specifications and numerous other technical topics.  This posting will summarize the policy and regulatory issues.

Ed Hamburger, President of the Association of American Railroads (AAR), gave the keynote address to start the conference.  Hamburger laid out the steps that the railroads have taken to improve the safety of crude oil shipments.  Hamburger said that "[r]ailroads believe that federal tank car standards should be raised to ensure crude oil and other flammable liquids are moving in the safest car possible based on the product they are moving. The industry also wants the existing crude oil fleet upgraded through retrofits, or older cars to be phased out as quickly as possible."  In response to questions about the possibility of speed restrictions, Hamburger told the audience that the railroad speed limits for unit trains of 40 miles per hour is appropriate for the shipment of crude oil and explained that the railroads had expressed concern to the Office of Management and Budget (which is currently reviewing a proposed rule on CBR) that a speed limit of 30 miles per hour for crude oil unit trains would have serious ripple effects of slowing down the entire rail system. 

Following Hamburger’s address, Michael Miller, Chief Operating Officer of Genesee & Wyoming, Inc., and Richard Flynn of Northeast Logistics Systems, gave presentations on crude by rail traffic trends and growth prospects.  Miller outlined the rapid growth of crude by rail shipments as well as the substantive benefits rail offers to oil refiners and producers versus pipeline shipments, including the flexibility of adjusting origin and destination points, scalability, and product uniformity.  Flynn addressed the rail industry’s efforts to get ahead of the crude by rail safety issues and the importance of everyone in the supply chain being involved in risk management initiatives. 

Nossaman Partner Linda Morgan gave the Luncheon address.  Morgan’s talk focused on the  many significant and challenging transportation issues raised by crude by rail, including how to most effectively use rail capacity, how to ensure enhanced safety throughout the entire logistics chain, how to best allocate risk, and how to strengthen local emergency response capabilities.  She emphasized the opportunity that this situation provides for a collaborative effort among all parties to find a resolution that strikes the right balance between public and private initiatives and creates certainties for the future. 
 

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Update from the American Public Transportation Association 2014 Rail Conference

The American Public Transportation Association (“APTA”) held its Rail Conference on June 15 through 18, 2014, in Montréal, QC.  In addition to the technical sessions for which APTA is well-known, a main theme of the Rail Conference was the nexus between transit and economic development.  The shift in themes demonstrates transit organizations’ changing philosophy from building and operating transit infrastructure to also catalyzing transit-oriented communities.  Much of the focus on transit and economic development relates to joint development and Transit-Oriented Development (“TOD”).

The on-going discussion tying transit infrastructure to land use and development started at APTA’s committee and subcommittee meetings before the Rail Conference.  For example, the APTA Land Use and Economic Development Subcommittee (under the Planning and Policy Committee) has focused on this relationship between transit and shaping communities since its inception.  The agenda of the subcommittee at the Rail Conference included updates on the (1) Federal Transit Administration’s (“FTA”) new Joint Development Circular, (2) the FTA’s TOD Planning Pilot Notice of Funding Availability (“NOFA”), and (3) tools that are to be developed by APTA, such as developer procurement documents.

The FTA first provided notice requesting comment on its draft Joint Development Circular in early March 2013.  Since then, the FTA has reviewed comments and participated in a variety of listening and technical sessions related to joint development and TOD.  The transit industry has eagerly anticipated this updated circular, and the FTA indicated in the Land Use and Economic Development Subcommittee meeting that the circular will be available in the next couple of weeks.

Additionally, at the Land Use and Economic Development Subcommittee meeting the FTA announced the status of the TOD Planning Pilot.  Under the current surface transportation authorization (Moving Ahead for Progress in the 21st Century, or “MAP-21”), the planning pilot was authorized to provide funding to advance planning efforts that support TOD associated with new fixed-guideway and core capacity improvement projects.   Congress appropriated $10 million to the TOD Planning Pilot in both Fiscal Years 2013 and 2014.  The FTA anticipates providing a NOFA for the $20 million (total) planning pilot before the end of June.

Finally, the Land Use and Economic Development Subcommittee discussed the suggestion that APTA create tools related to joint development and TOD that can be used by members.  The first tool that is anticipated is a template Request for Qualifications for developers.  The template RFQ would provide some standardization of qualifications solicitation documents across the transit industry.  APTA has provided similar tools in the area of rolling stock procurement (buses and rail vehicles).

The thread that started at the committee and subcommittee meetings preceding the Rail Conference was picked up with sessions at the conference.  Slightly more than 20% of the sessions at the Rail Conference focused on the relationship between transit and land use and development.  Issues covered at sessions included streetcars and urban circulators and their relationship to development, value capture of development along transit infrastructure, innovative business models and Public-Private Partnership opportunities in transit, and prioritizing transit infrastructure through stakeholder input and land use planning.  A significant volume of information related to these topics, as well as technical topics addressed during Rail Conference sessions, is available through the Transit Cooperative Research Program.

Study Finds San Francisco Veterans Administration Medical Center is Prime Candidate for P3 Delivery Method

According to a recently released study by the Bay Area Council Economic Institute, a public-private partnership (P3) may be the most effective method to deliver a proposed expansion of the San Francisco Veterans Administration Medical Center (SFVAMC) – but there are some barriers that need clearing. 

The SFVAMC is a leading Veterans Administration (VA) medical center, having the largest research program in the national VA system, and providing one-third of the clinical education and curriculum for medical students and residents from the medical school at the University of California, San Francisco (UCSF).  The SFVAMC has outgrown its existing, 80-year facility near the Golden Gate Bridge, and is considering building a new state-of-the art building in the city’s Mission Bay district, where it would relocate research and hospital operations and form part of UCSF’s growing health sciences complex there.  

Based on current delays in federal appropriations, the much-needed expansion project faces an estimated wait time of 10 to 15 years if delivered through conventional federal procurement methods.  In contrast, the Economic Institute’s study finds that there is an immediate opportunity for the VA to pilot a P3 to design, build, finance, operate, and maintain the expansion project.   If structured properly as a P3, the project can attract private capital and could result in a significantly accelerated delivery schedule.  When compared to conventional procurement methods, the study concludes that a P3 could achieve capital cost savings of at least 20 %, and life-cycle cost savings (including operations and maintenance) of 10-30 %. 

Moving forward with the P3 alternative, however, will require changes in federal procurement laws. For starters the Economic Institute recommends passing enabling legislation to allow the VA to enter into long-term space lease agreements and lease-leaseback transactions.  For now, the VA is in dialog with US congressional leaders, as well as UCSF and prospective private partners, to move the project to the next step.  

The study was broadly peer reviewed, by Stan Taylor and Patrick Harder of the Firm’s Infrastructure Practice Group.

A copy of the Economic Institute’s study may be found at: http://www.bayareaeconomy.org/publications-list/

Nossaman Develops Model Social Infrastructure P3 Bill

Many federal, state and local government agencies are looking for innovative and cost effective methods to deliver essential social infrastructure such as educational facilities, hospitals and criminal justice facilities and related infrastructure.  As a result, these agencies are increasingly interested in assessing and pursuing the P3 delivery model.  However, these agencies often lack clear statutory authority to use a P3 delivery model for social infrastructure.  Recognizing this gap, Nossaman has developed a model social infrastructure P3 bill, based on its extensive experience in advising US public agencies on the use of innovative delivery methods for other classes of infrastructure.  A copy of the model bill can be viewed here.   

A draft version of the model bill was released for industry comment on April 28, 2014, and was favorably received and generated interest and input from various sectors.  A few minor revisions were made to the bill following the comment period, which closed on June 11, 2014.

The model bill seeks to provide the authorizations that a public sponsor would need to engage in the P3 delivery of social infrastructure projects.  At the same time, the model bill is designed to provide flexibility to a public sponsor to fashion its project and procurement to suit its unique needs and goals.  As such, it avoids setting out detailed, rigid rules that a public sponsor must follow in the execution of a P3 project.

The model bill is not designed to address the specific requirements of every jurisdiction.  Rather, the model bill presents options and issues for consideration by legislators and addresses hurdles to P3 delivery that are common across many jurisdictions.  Every jurisdiction will have its own unique legal and policy restrictions and requirements that would need to be taken into account in the development of its authorizing legislation. 

Nossaman welcomes your comments and suggestions on the model social infrastructure P3 bill.  Please send any comments or inquiries to Yukiko Kojima at ykojima@nossaman.com or to Andrée Blais at ablais@nossaman.com.

Andrée Blais co-authored this entry.

Nossaman Partner Provides Expertise to NCHRP's Second Volume Addressing Management of NEPA-Related Risks in Project Delivery

The Transportation Research Board of the National Academies (“TRB”) has released its second volume of guidance addressing risks in project delivery, including risks associated with the National Environmental Policy Act (“NEPA”).  This second volume of guidance, entitled “Guidance for Managing NEPA-Related and Other Risks in Project Delivery, Volume 2: Expediting NEPA Decisions and Other Practitioner Strategies for Addressing High Risk Issues in Project Delivery,” (“Volume 2”) was submitted in March 2014 under the TRB’s National Cooperative Highway Research Program (“NCHRP”) and was published by TRB in a Web-only version last week.

The thrust of the paper is that by identifying key issues, potential controversies, the magnitude and nature of environmental and other impacts, and the project setting before significant resources have been committed to a NEPA document, transportation agencies can “right size” the level of effort, anticipate potential problems, and address potential issues.  This early focus can save transportation agencies time, money and effort in complying with NEPA and other environmental laws.  The paper provides guidance on how to identify and address these matters from the outset of NEPA process. 

Volume 2 supplements the first volume of guidance addressing NEPA-related risks in project delivery, which was also submitted under the TRB’s NCHRP in October 2011.

Nossaman attorneys Edward Kussy, Carollyn Lobell, and David Miller were on the team that prepared this important paper.  Ed Kussy was the principle author of Volume 2.  Ed is former Deputy Chief Counsel at the Federal Highway Administration (“FHWA”), and has worked extensively with projects, policies, and laws related to NEPA during his career.  Ed was one of the drafters of the FHWA’s environmental regulations and environmental streamlining strategies and worked on numerous NEPA litigations, including several cases that went to the United States Supreme Court.

The TRB’s NCHRP is a research forum that addresses issues important to state Departments of Transportation and other transportation officials, and has a substantial body of publications related to the research projects it oversees.

California Legislators Propose Two Bills on Crude by Rail

Two measures have been introduced in the California legislature to respond to the growth of crude-by-rail volume in the state.

State Senator Fran Pavley (D-Agoura Hills) has introduced SB 1319, which would expand existing law regarding oil spills to cover inland waterways and direct the Governor to require the Administrator of the Office of Spill Prevention and Response to amend the California oil spill contingency plan to cover inland waterway spills, which would include any spills from railroads. 

Sen. Pavley told the LA Times, "We need to address the new and unique hazards of crude-by-rail transportation." On May 28, the State Senate voted 23-11 to approve the bill.

Meanwhile, Assemblyman Roger Dickinson’s (D-Sacramento) bill (AB 380) would require railroads to make quarterly reports of specified information regarding the transportation of hazardous materials and an emergency response plan to the California Office of Emergency Services and establish a response management communications center. Cal OES would disseminate relevant information from the reports and the emergency response plan to the state’s unified program agencies, although the reports and emergency response plans would be exempt from the California Public Records Act.

“The risk of catastrophic injury to life and property by rail accident has grown dramatically,” said Dickinson. “It is essential that emergency response agencies have the information they need about crude oil cargo in order to minimize any damage from an accident,” Dickinson added. On June 4, AB 380 passed the Senate Environmental Quality Committee.

Meg Catzen-Brown contributed to this post.

TRB Hosts 5th Annual International Finance Conference

The Transportation Research Board’s (TRB) 5th annual International Conference on Financing Surface Transportation will be held from July 9-11, 2014 at the Arnold and Mabel Beckman Center in Irvine, CA.

The conference will examine the current status of transportation finance and future possibilities through thought-provoking program offerings with presenters from the fields of transportation research, government, and the private sector.

Conference sessions include:

  • Innovation, Experimentation and Exploration – The Landscape of Transportation Funding and Finance in the U.S.
  • The Impacts of Technology on Transportation Revenue
  • Industry Views on Future Transportation Finance- What’s New and What’s Next?
  • Creative Ways to Consider Funding Future Transportation
  • Applying Lessons Learned to Move the Transportation Industry Forward

Conference sessions will be followed by breakout sessions to allow for more focused, in-depth discussions that will encourage transportation colleagues from around the world to share the latest finance techniques and innovations.

The registration fee includes all general sessions, breakout sessions, committee meetings, meals, breaks and Welcome Reception. Hotel lodging will be held at the Marriott Newport Beach Hotel where pre-conference workshops will take place on Wednesday, July 8.

Congress Advances Reauthorization of Terrorism Risk Insurance Act

On June 3, the United States Banking Committee unanimously forwarded a bill (S. 2244 “the Terrorism Risk Insurance Program Reauthorization Act of 2014”) that would extend the “Terrorism Risk Insurance Act” (or “TRIA”) for seven years.  The bill forwarded by the Senate Banking Committee was introduced in April by Senators Schumer (D-NY), Kirk (R-IL), Reed (D-RI), Heller (R-NV) and has 23 cosponsors.

Chairman Randy Neugebauer (R-TX) of the U.S. House of Representatives’ Financial Services Subcommittee of the Housing and Insurance Committee is pursuing a three year reauthorization.  A hearing is expected in the House later this month.

TRIA was originally signed into law by President George W. Bush in the early aftermath of the September 11th attacks in New York, Washington D.C. and rural Pennsylvania.

TRIA effectively placed the U.S. federal government as a “backstop” insurer for insurance claims arising out of acts of terrorism.  Following the September 11th attacks, insurers began to exclude coverage resulting from acts of terrorism from policies offered in the insurance marketplace.  With the federal government essentially serving as a reinsurer of such risks, TRIA was conceived to allow projects to proceed in the face of insurance risks, allowing public and private parties continue to negotiate transactions that otherwise might not have proceeded for lack of insurance, thus removing one more impediment to the recovery of the U.S. economy in the wake of the attacks.

TRIA has been set to expire several times (2005, 2007), but had been extended.  The latest extension, however, is set to expire at the end of 2014. 

For P3 transportation projects, P3 project owners are often very concerned about terrorism risk, and at the same time seek the competitive tension of procurements to leaven costs for concessions.  The uncertainty of terrorism risk insurance coverage serves both to increase concession costs and even to cause potential concessionaires to elect not to bid on the transactions.  As insurance premiums are valued based upon the insurance market (and not, for example, subject primarily to inflationary pressures), having the federal government consider continuing in its “backstop” role allows public owners to expect more competitive bids from more potential concessionaires.

Information about the U.S. Government’s terrorism risk insurance program can be found at this link: http://www.treasury.gov/resource-center/fin-mkts/Pages/program.aspx

East End Crossing Wins Grand Prize at International P3 Awards Ceremony

Wrapping up the 2013 P3 awards season, East End Crossing won the Projects Grand Prize as well as the Gold Prize for best P3 road project at the Partnerships Bulletin awards ceremony Thursday night at the Park Lane Hotel in London.  The toll bridge availability payment project in southern Indiana, USA, was the top winner among 7 other P3 projects nominated from around the world.  Attended by over 700 of the leading industry participants, the project was recognized for its innovative financing structure and well run procurement process.

Connecting Kentucky and Indiana over the Ohio River, the East End Crossing is part of the two-state, $2.6 billion Ohio River Bridges project, one of the largest transportation undertakings in the United States.  Indiana's East End Crossing involves a new $1.18 billion toll bridge over the Ohio River connecting I-265/KY 841 with S.R. 265. 

A multiple, award winner, the East End Crossing was the first P3 transaction ever named 2013 “Deal of the Year” by The Bond Buyer.  It was also named ARTBA 2013 P3 Project of the Year and “North American Project Bond Deal of the Year” by Project Finance Magazine. The project was also a finalist for the 2013 Infrastructure Journal Transport Deal of the Year. 

We congratulate the Indiana Finance Authority on receiving this extraordinary recognition and wish further success in implementation of what is fast becoming one of the US’s more active P3 programs.