Indiana Finance Authority Issues the Request for Qualifications for the I-69 Section 5 Project

On the heels of its very successful foray into availability payment model public-private partnership (“P3”) concessions, the Indiana Finance Authority (“IFA”) issued its second P3 Request for Qualifications (“RFQ”) on May 23, 2013, this one to develop, design, build, finance, operate and maintain the I-69, Section 5 project.  As with the preceding P3 procurement of the East End Crossing (part of the broader Ohio River Bridges Project), the I-69 Section 5 project will be a public-private partnership between the State of Indiana, through the IFA and the Indiana Department of Transportation (“INDOT”) and the successful proposer. 

The I-69 Section 5 project consists in upgrading approximately 21 miles of existing State Route (“SR”) 37, a four-lane median divided highway between Bloomington, Indiana (home of Indiana University) and Martinsville, Indiana, and development of a six-lane divided highway in designated urban areas.  In addition, the project involves construction of four new interchanges and four new overpasses with varying degrees of improvements to the existing interchanges and overpasses at the Fullerton Pike, Tapp Road/SR 45/2nd Street, Sample Road and Liberty Church Road, all of which are current intersections with SR 37.

Section 5 is one of six sections under development to complete the interstate connection from Evansville, Indiana to Indianapolis, collectively part of a further development of the national I-69 corridor to connect Mexico with Canada.  Four of the remaining five sections are completed or development and construction are underway, and Section 6 is still in the planning stage.

Over 175 people attended a industry workshop on May 22, where Governor Mike Pence reaffirmed Indiana’s, and his administration’s, commitment to exploring innovative approaches to deliver much-needed infrastructure – particularly transportation – improvements in Indiana.

IFA is an independent financing instrumentality of the State, which in working with INDOT, reprises a successful partnership that brought the East End Crossing to the American P3 industry, the first availability payment concession in the United States to have met each of its procurement schedule deadlines in among the fastest P3 procurements in the United States and to have successfully achieved financial close with a “flat” investment grade rating.

Statements of qualifications are due at the IFA’s offices in Indianapolis, Indiana at 3:00 p.m. on July 9, 2013.  Shortlisting is anticipated by the end of July 2013, with award tentatively scheduled for late first quarter, 2014 and financial close early second quarter, 2014.

FHWA Holds P3 Model Contract "Listening Sessions" and Beta-tests "P-3 VALUE Toolkit"

As part of its effort to meet MAP-21’s legislative requirement to develop “standard public-private partnership transaction model contracts for the most popular types of public-private partnerships,” the Federal Highway Administration held a “listening session” with representatives from the transportation industry at the U.S. Department of Transportation in Washington D.C. on January 16.  Representatives from state departments of transportation, general contractors, trade associations, legal advisors and others were in attendance, and solicited to provide FHWA with the P3 community’s view of what the model contracts should be. 

In her introductory remarks, the Hon. Beth Osborne, Deputy Assistant Secretary of Transportation for Policy, saw the effort as “compiling best practices” of the P3 community, but one for which FHWA did not have “pre-conceived notions.”  FHWA and USDOT representatives spent the better part of four hours hearing out the industry’s hopes for, expectations about and cautionary recommendations regarding FHWA’s final product.  The resounding theme of the audience comments was that “every P3 is different,” FHWA’s effort should tilt toward educating public sponsors as to the project-specific risk-sharing and “value-for-money” considerations that makes a P3 an effective delivery tool, and FHWA should refrain from prescribing risk allocations or other contract terms.

In a companion effort, FHWA is also beta-testing an interactive model, which intends both to help educate public sponsors in alternative procurement strategies (like the public-private partnership (“P3”)) “apples to apples” comparison with conventional procurements).  The “P3-VALUE Toolkit” collects project sponsors’ (and their consultants’) project-specific risks, quantifies their value, and, with other financing assumptions and project-specific parameters considered, produces a snapshot of the value-for-money that a P3 strategy may or may not present for that project.  FHWA held an initial roll-out “webinar” of the draft toolkit on January 10, with a follow-up webinar session on January 24.

FHWA has set up a docket, Federal Register No. FHWA-2012-0126, to collect industry comments by May 31, to keep pace with the rigorous requirement of MAP-21 to produce and promulgate model contracts by December 31, 2013.

Fred Kessler co-authored this entry.