Global Recognition of US Infrastructure Projects and Transportation Agencies Continues at Partnerships Awards

As we previously reported in April, organizations that annually recognize top projects and industry organizations worldwide have proven that they are no longer focusing solely on mega-projects that are part of major design-build contracts.  This was apparent at the Partnerships Awards hosted by Partnerships Bulletin and PPP Bulletin International on May 23, 2013, where numerous US agencies and projects received recognition.

The Commonwealth of Virginia’s Office of Transportation Public-Private Partnerships received the distinction of Best Central/Regional Government PPP Promoter, recognized for its work on some of the largest infrastructure projects currently taking place in the US, including the 95 Express Lanes project and the Midtown Tunnel.  Continuing their winning streak, Dusty Holcombe, Deputy Director of the Virginia Office of Transportation P3, was also honored for Best Individual Contribution. 

Also receiving recognition, Presidio Parkway was "Highly Commended" for Best Transport Project, essentially making it one of top three transport projects in world.  This $1.1 billion project was the first to be delivered under California’s P3 law, and only the third anywhere in the United States to be developed through an availability payment structure.

We would also like to recognize Ernst & Young for being named Best Financial Adviser and KPMG for being “Highly Commended” in the same category.  Congratulations also to Arup for being named Best Technical Adviser.

The Partnerships Awards recognize people and projects from around the world for innovation, inspiration and collaboration.  Entries are first reviewed by an 80-plus expert panel before going on to the 20 head judges. 

Congratulations to all the agencies and their private partners involved in these projects for this highly-deserved recognition.

FHWA Levels Playing Field for P3 Availability Payment Concessions

Hot on the heels of the financial close of the Presidio Parkway, the first California transportation public-private partnership (“P3”) availability payment deal and only the fourth in the United States, Federal Highway Administration’s (“FHWA”) Office of Innovative Program Delivery has issued guidance regarding the eligibility of periodic availability payments for reimbursement from federal aid funds.  Federal-Aid Funding and Availability Payments

Recognizing that availability payment concessions can offer the benefits of enhanced performance and project cost savings, FHWA will allow a portion of the state's availability payments to be reimbursed from Title 23 funds even though the state is not directly paying for the cost of construction and major maintenance.  Also, FHWA acknowledges that a component of the availability payment is profit to the private developer as consideration for taking on many of the project risks associated with project completion and life cycle costs over the 30-35 year term of a typical availability payment contract. 

Even though the availability payment is viewed as a "unitary" payment, FHWA will look into the developer's financial model to subtract those costs that are not eligible for reimbursement (regular operations and maintenance as well as TIFIA loan repayments if TIFIA is used) over the term of the concession and arrive at a formula upfront for calculating the eligible portion of the annual availability payment throughout the term of the concession.  State DOT's will now be able to consider the use of availability payment contracts vs. traditional project delivery methods without sacrificing their ability to use federal aid funds.
 
A groundbreaking project for a number of reasons, the Presidio Parkway served as the model for FHWA in developing a form of project agreement between the feds and the state, which acknowledges this approach to using federal funds to reimburse availability payments.

California Department of Transportation Reaches Financial Close on Presidio Parkway Project

The California Department of Transportation (“Caltrans”), in cooperation with the San Francisco County Transportation Authority, reached financial close on the Presidio Parkway Project public-private partnership (“P3”).  The $1.1 billion deal is the first transportation P3 in California under the recently enacted P3 statute, Streets and Highways Code section 143, and only the third highway project developed through an availability payment structure. 

Caltrans entered into an agreement with Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America, to design, build, finance, operate and maintain the Presidio Parkway for 30 years. The P3 delivery method allows the project to proceed when limited state money is available through conventional means. The P3 will reduce construction costs, transfer financial risks to Golden Link, free up state funding for other uses, and ensure a high-level of maintenance during the 30-year contract.  Funding for the project includes a combination of equity, bank debt and TIFIA loans.   

The Presidio Parkway Project will replace iconic Doyle Drive, which is the southern access point to the Golden Gate Bridge and travels through the Presidio of San Francisco and the Golden Gate National Recreation Area. The improvements include seismic upgrades, two sets of short tunnels, a wide landscaped median, enhanced pedestrian accommodations and improved traffic transitions into city streets.

The project successfully overcame litigation challenges at the Alameda County Superior Court, 1st District Court of Appeal and California Supreme Court where opponents tried to stop the project as a P3. The litigation ended on Nov. 16, 2011 after almost a year and enabled the P3 to reach financial close.

Nossaman advised Caltrans on the procurement, financing and contracts for the project and represented the San Francisco County Transportation Authority on the litigation matters.

Appeals Court Rules Presidio Parkway Can Move Forward as P3

On August 8, 2011, the 1st District Court of Appeal in San Francisco published a decision holding that Phase 2 of the Presidio Parkway project can move forward as a public-private partnership (P3).  The unanimous opinion approved of and affirmed the February decision by Judge Wynne Carvill of the Alameda County Superior Court to the same effect, allowing the California Department of Transportation (Caltrans) and the San Francisco County Transportation Authority (SFCTA) to proceed with Phase II as a P3. The decision was issued less than five months after the appeal had been taken, because Caltrans and SFCTA had asked the Court to expedite what would normally be a longer process in order to get the critical project moving forward promptly.

Professional Engineers in California Government (PECG), the union representing Caltrans engineers, sought to stop Phase II of the project, which is replacing the old and outmoded approach to the Golden Gate   Bridge in San Francisco.  PECG sued Caltrans and the SFCTA, arguing that the project was not authorized by Streets and Highways Code section 143, recent legislation broadening the types of P3 projects that could be performed in California.  However, the Court of Appeal rejected PECG’s argument that, under section 143, Caltrans employees or direct consultants must perform all the preliminary planning and design services, as opposed to being only responsible to see them done correctly.  The Court also rejected PECG's other arguments, that the project was not supplemental and that P3 efforts under California law must be confined to toll projects, holding that the legislation authorized much broader use of innovative financing, in this case an availability payment.

The Presidio Parkway Project is the first project to reach award under California’s new public-private partnership statute.  This decision should ease the way for other projects, and also provide helpful precedent for design build projects authorized under parallel legislation.

At the end of 2010, Caltrans, in cooperation with SFCTA, signed a contract awarding the project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America.

PECG will have until September 16 to ask the California Supreme Court to review the Court of Appeal decision.  It is not known if PECG will seek review, however the Supreme Court grants review in only a small number of cases based on specific criteria.

Nossaman represented SFCTA in the litigation and Caltrans was represented by its own Department counsel. Nossaman has also provided assistance to Caltrans in the procurement of the project.

For more about the Presidio Parkway Project and section 143, see Presidio Parkway Project Moves Forward as Court Denies Request for Writ of Mandate and Injunction, Presidio Parkway Project AwardedPreferred Proposer Selected for Presidio Parkway Project, Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.

Presidio Parkway Project Moves Forward as Court Denies Request for Writ of Mandate and Injunction

On February 17, 2011, Judge Wynne Carvill of the Alameda County Superior Court filed a 38 page opinion denying the efforts of Professional Engineers in California Government (“PECG”), the union that represents Caltrans engineers, to stop Phase 2 of the Presidio Parkway project in San Francisco.  PECG sued the California Department of Transportation (“Caltrans”)  and the San Francisco County Transportation Authority (“SFCTA”), as well as the California Transportation Commission and officials of each of these agencies, seeking a halt to Phase 2, which had been awarded as a public private partnership (”P3”) contract, with an availability payment as a financing mechanism.  PECG had argued that this project did not meet the criteria set forth in the 2009 legislation authorizing P3 projects in California, Streets and Highways Code section 143.  Among other reasons, it asserted that tolls were the exclusive financing mechanism under the legislation and that availability payments could not be used.

Nossaman represented SFCTA in the litigation and Caltrans for the P3 procurement.
After the same judge dissolved a temporary restraining order and denied a preliminary injunction at the end of 2010, Caltrans, in cooperation with SFCTA, signed a contract awarding the project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America.  Golden Link proposed a maximum availability payment of $28,549,189 for the 30-year contract to design, build, finance, operate, and maintain the project. 
 
The Presidio Parkway Project is the first project to reach award under California's new public-private partnership statute. For more about the Presidio Parkway Project and section 143, see Presidio Parkway Project AwardedPreferred Proposer Selected for Presidio Parkway Project, Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.

Presidio Parkway Contract Awarded

The California Department of Transportation started off the New Year with a significant step in its public-private partnership program.  After an Alameda County Superior Court judge dissolved a temporary restraining order and denied a preliminary injunction sought by Professional Engineers in California Government, the California Department of Transportation, in cooperation with the San Francisco County Transportation Authority, awarded the contract for the Presidio Parkway Project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America.  Golden Link Concessionaire, LLC proposed a maximum availability payment of $28,549,189 for the 30-year contract to design, build, finance, operate, and maintain the Presidio Parkway Project.
 
The Presidio Parkway Project in San Francisco is the first project to reach award under California's new public-private partnership statute, Streets and Highways Code section 143. For more about the Presidio Parkway Project and Section 143, see Preferred Proposer Selected for Presidio Parkway Project, Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.

Preferred Proposer Selected for Presidio Parkway Project

A short six months after shortlisting proposers, the California Department of Transportation and the San Francisco County Transportation Authority selected Golden Link Partners, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America, as the Preferred Proposer for Presidio Parkway Project.  Golden Link Partners submitted an annual availability payment of $28,549,189, well within the $35 million limit authorized by the California Transportation Commission in April 2010.  This significant event in the procurement follows closely on the announcement that the project funding was appropriated as part of the recently passed California budget.  Commercial close for the project is slated for December 2010.

The Presidio Parkway Project in San Francisco is the first project to reach the preferred proposer stage under California's new public-private partnership statute, Streets and Highways Code section 143. For more about the Presidio Parkway Project and Section 143, see Final RFP for the Presidio Parkway Project Released, Presidio Parkway Reaches Two Important Milestones, and Presidio Parkway Project RFQ Issued.
 

Final RFP for the Presidio Parkway Project Released

Following extensive industry review of the draft Request for Proposals, on Friday, July 9, 2010, the California Department of Transportation, in coordination with the San Francisco County Transportation Authority, issued the final Request for Proposals for the Presidio Parkway Project. According to the latest procurement schedule in the Request for Proposals, technical proposals are due on September 10, 2010, and financial proposals are due on September 24, 2010.

The Presidio Parkway Project is the first public-private partnership procurement under California's new public-private partnership law, Section 143 of the Streets and Highways Code. For more about the Presidio Parkway Project and Section 143, see Presidio Parkway Reaches Two Important Milestones and Presidio Parkway Project RFQ Issued.

Presidio Parkway Reaches Two Important Milestones

California's first public-private partnership procurement has passed two major hurdles in the last week.  First, after a long anticipated and much-debated hearing, the California Transportation Commission approved the San Francisco Presidio Parkway Project last week on an 8-3 vote.

Second, on May 25, the California Department of Transportation released the draft request for proposals to design, build, finance, operate and maintain the Presidio Parkway.  The project, sponsored by Caltrans and the San Francisco County Transportation Authority, is being closely watched because it is the first P3 project under the new Section 143 of the California Streets & Highways Code, which permits Caltrans and regional transportation agencies to work with the private sector in developing transportation facilities in the state (for more about Section 143, see 'California Passes First Significant Transportation PPP Law in 20 Years').

The CTC vote was a topic of discussion at the California Public Infrastructure Advisory Committee meeting this week, which preceded the Public Infrastructure Financing Forum held at the California Science Center in Los Angeles.

Caltrans plans to issue the final RFP on June 29, 2010.


 

Presidio Parkway Project RFQ Issued

Yesterday the California Department of Transportation, in cooperation with the San Francisco County Transportation Authority, issued a Request for Qualifications for a public-private partnership for the Presidio Parkway project (also known as the Doyle Drive replacement project) in San Francisco.  The RFQ is available at: http://www.bidsync.com/DPX?ac=view&auc=610389

This is the first procurement initiated under the new public-private partnership law in California, SB4, codified at Section 143 of the Streets and Highways Code.
 
Under Section 143, the project must be approved as a P3 by the California Transportation Commission.  Caltrans and SFCTA plan on seeking CTC approval before an RFP is issued for the project.  In the meantime, statements of qualification are due from interested parties by March 1, 2010.
 
If the CTC gives its approval, Caltrans and SFCTA contemplate procuring an availability payment P3, with a construction period of about three years and an operating period of about 30 years.