Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

The federal fiscal 2011 budget compromise authorized a third round of stimulus spending on transportation capital projects, dubbed TIGER III, under the Transportation Investment Generating Economic Recovery program. $527 million will become available from the U.S. Department of Transportation for selected projects.

Of this amount, up to $150 million will be slated for direct loans and other credit assistance on terms similar to the TIFIA program. This more than doubles up on the $122 million TIFIA budget authority for the 2011 fiscal year.

What we are interested in seeing is whether the USDOT will actually approve credit assistance up to the full $150 million in budget authority assuming they receive enough requests for TIGER TIFIA payments.  TIGER I, part of ARRA, authorized $200 million in supplemental TIFIA budgetary authority but the USDOT only awarded five TIGER TIFIA projects using $60 million. TIGER II had a similar outcome.  In 2010, Congress authorized $600 million in TIGER II discretionary grants, $150 million of which could be used to subsidize TIFIA credit assistance. Over 1,000 applications were submitted for over $19 billion in projects. USDOT awarded 42 capital construction and 33 planning projects worth nearly $600 million. These included only one TIFIA financing, a $20 million award to LA Metro as a TIGER II TIFIA subsidy.

Numerous sources are urging significant expansion of the TIFIA program as part of the federal transportation reauthorization bills, and committee chairs Boxer and Mica are on record supporting a large increase in TIFIA budget authority. Let’s hope this augers well for use of the full $150 million. Current demand for TIFIA credit assistance, at least based on the latest list of LOI’s, clearly supports full use. By the way, word from FHWA is that decisions on the LOIs are expected in the near future.  Those not selected will be lining up for TIGER TIFIA – Round III.

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The just ended InfraAmericas P3 conference in New York City brought together virtually every active participant, public and private, in the U.S. transportation P3 industry.  A number of public agencies showcased their plans and projects, and there was a palpable sense that opportunities to bring U.S. projects forward are growing significantly.

Perhaps the project producing the most buzz at the conference is the Knik Arm Bridge and Toll Authority’s Knik Arm Crossing project in Alaska.  KABATA came to the conference loaded for bear (a not infrequent pastime in this bountiful state).  The day before the conference, KABATA hosted a very well attended industry forum at the Citicorp World Headquarters.  Attendees were greeted with messages from key political stakeholders, including Congressional representatives, Alaska Gov. Sean Parnell, state representatives and local officials.  In attendance were key policy and decision makers from the state, including State Sen. Linda Menard, KABATA’s Chairman Mike Foster, CEO Andrew Niemiec, CFO Kevin Hemenway and executives from the Departments of Revenue and Transportation.

During the two-day conference, KABATA held 17 individual meetings with major concessionaires, equity funds and constructors.  The appetite for this project appears large and growing.  KABATA received useful input and provided the industry with information on project status and the intended P3 procurement.  It was quite evident that teams are forming, some in an advanced stage and some still gelling.

Why does this project command the intense attention it is receiving?  We think a number of factors have converged to uniquely position the project.  What do you think?

• Project maturity.  The project is well-defined.  The ROD and a no jeopardy biological opinion regarding beluga whales are in hand, permitting is well on its way, KABATA should have all ROW in place by the time of P3 award, and site conditions are well documented.
• The political climate for the project has never been more favorable.  The essentiality of the project to the state-wide economy is broadly recognized.
• KABATA’s decision to convert from a toll concession to an availability payment concession has better aligned the project with market realities and drawn attention from many players.
• Analysis of the project’s financial feasibility is well-developed, realistic and positive, with industry leaders HDR, Wilbur Smith Associates, and Citgroup providing cost estimation, revenue estimation and financial planning.
• KABATA’s plan for legislation in the Senate (SB 79 and SB 80) and the House (HB 158 and HB 159) to enhance the availability payment credit will underpin the project with the state’s AA appropriation debt rating.
• Few new U.S. transportation projects are commencing serious, active procurement in the next few months.  The timing is excellent.

Stay tuned.  The RFQ is expected next month.
 

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The National Conference of State Legislatures (NCSL) and the Center for Excellence in Project Finance at the American Association of State Highway and Transportation Officials (AASHTO) recently released the report entitled "Transportation Governance and Finance: a 50-State Review of State Legislatures and Departments of Transportation," and will be hosting a free webinar on June 21 at 2pm ET to present the findings of the study (previewed during a committee meeting in January).

Listening to the webinar and reading the study is a must for anyone who wants to understand how decisions regarding transportation development and funding get made at the various levels of state government.  In particular it's a valuable opportunity for private P3 developers to gain insights into the workings of state transportation decision-making.

Click here for more information and to register for the webinar.

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The Railroad Safety Improvement Act of 2008 (“RSIA”) was the most comprehensive rail safety legislation in several decades.  Many railroads are busy with the rollout of positive train control, but there are many other rail safety initiatives underway at the same time.  This is the second in a series of posts on “what else” is going on in railroad safety, besides positive train control.

FRA is in the midst of a rule making to implement the RSIA requirement that  passenger and freight railroads to establish risk reduction programs.  As part of the programs, railroads would be required to produce detailed analyses of current safety hazards.  Congress concluded that risk reduction programs would not be effective if safety hazard data were subject to FOIA.  In what some might describe as a punt, Congress left open the question of whether risk reduction data should be shielded from use in personal injury litigation.  Instead, Congress mandated that FRA conduct a study on the public interest implications of shielding risk reduction data.

On May 9, 2011, FRA issued a request for public comment on the issue.  FRA observed that comments received on the risk reduction rule “indicate that railroads are reluctant to … provide comprehensive risk analyses that might be used against them in litigation.”  That’s an understatement.

Shielding risk reduction data would encourage railroads to candidly describe current safety hazards.  Candid assessments would lead to more success in reducing railroad safety risks.  So what is the issue?  Pursuant to the Congressional study directive, FRA is seeking comments on whether private litigants would be disadvantaged by risk data protection.  Without a doubt, private litigants could benefit in railroad lawsuits by having access to the risk reduction data.  It is a separate question whether private litigants would be disadvantaged by not having that data.  But for the statutory mandate, railroads would continue to conduct any safety analyses within the protection of attorney-client privilege and plaintiffs would not have the resulting data.  Therefore, plaintiffs will lose nothing if data generated pursuant to the statutory mandate is protected.

FRA has asked for comments on or before July 8, 2011.  Let’s hope that FRA recognizes that risk reduction analyses will not be effective unless the data is protected and that protecting the data will not deprive private litigants of information that they would have in the absence of mandated risk reduction programs.

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During the recent legislative session, TxDOT received authority under Senate Bill 1420 to develop certain projects, including, among others, the SH 99 Grand Parkway project in the Houston area, as well as the I-35E Managed Lanes project in the Dallas/Fort Worth area through a public private partnership procurement process. On June 10, 2011, TxDOT intends to issue requests for information (RFIs) to assist in formulating strategies for the development of these urgently needed projects. Copies of each RFI will be available on TxDOT's website. TxDOT is seeking RFI responses from individual firms or teams with experience in developing and/or financing large transportation infrastructure projects and plans to hold one-on-one meetings with companies expected to lead prospective developer teams in July 2011.

The IH 35E Project consists of the redevelopment of a 28-mile section of Interstate 35E (IH 35E) from IH 635 to US 380 in Dallas and Denton Counties. The project is planned to include reconstruction and widening of the existing IH 35E to incorporate additional main lanes/general purpose lanes, managed lanes and frontage roads.

 

The SH 99 Grand Parkway Project consists of an approximately 180-mile circumferential scenic highway crossing seven counties and encircling the Greater Houston area divided into Segments A, B, C, D, E, F-1, F-2,G, H, I-1 & I-2. TxDOT is currently contemplating the development of four to six-lane divided toll road with intermittent frontage roads (varying by location) spanning Segments E, F-1, and F-2, and a portion of Segment G from IH 10 to IH 45 in Harris County. Montgomery County is considering options for the development of the remaining portion of Segment G. Additional segments will be developed in the future as required to meet capacity demands.

 

Beginning on June 10, 2011, check here for further details regarding the projects, the one-on-one meetings and the requests for information.

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The roll-out of positive train control (“PTC”) is a daunting task for many railroads.  Even without PTC we would still call this a very busy time in the realm of railroad safety.  The Rail Safety Improvement Act of 2008 (“RSIA”), which included the PTC mandate, was the most comprehensive rail safety legislation in several decades.  It would be easy in light of PTC to lose sight of all the other RSIA initiatives underway, but that would be a mistake.

In an effort to help our readers stay current, we will devote some space here to a series of posts on RSIA implementation issues other than PTC.  I will be speaking on this topic next week on a panel with an FRA representative and commuter rail CEO’s at the American Public Transportation Association’s Rail Conference in Boston.

To begin with, let’s review the status of passenger hours of service limits.  RSIA made major changes in the Hours of Service Act, but provided that the changes would not apply to Amtrak and commuter railroads if FRA finalized an alternative set of passenger rail requirements by October 16, 2011.  With that deadline in mind, FRA published a proposed rule in March.

For multiple tour limits, FRA proposes to treat all shifts in two categories.  A “type 1” shift would be any shift within the window from 4 a.m. to 8 p.m.  Generally, the rule would allow a maximum of 14 consecutive type 1 shifts before a two-day off duty period.

A shift that involves any time outside of the 4 a.m. to 8 p.m. window would be a “type 2” shift.  Here is where we get the big changes.  For type 2 shifts, generally the rule would allow a maximum of six consecutive shifts before a 24-hour off duty period.  All type 2 shifts would be analyzed against a defined fatigue threshold, the railroad would be required to mitigate fatigue above the threshold or show that mitigation is not possible.  Type 2 shifts that fall below the fatigue threshold could be treated as type 1 shifts.

Several commuter railroads, trade associations and unions filed comments on the proposed rule.  Passenger railroads and the American Public Transportation Association expressed concern with respect to implementation costs, including the significant costs for new hires, fatigue training costs and licensing fees for fatigue modeling software.   If the comments filed are indicative, rail labor is generally very satisfied with the proposed rule and considers the changes long overdue.

The final rule for passenger rail hours of service is scheduled for release in August 2011, in time to meet the statutory deadline for implementation of October 16, 2011.

Peter W. Denton also contributed to this post.

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