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.
In over 42 years with the Firm, Fred Kessler has gained national recognition as a guiding force for public agencies in the field of transportation public-private partnerships (P3s). Clients benefit from his vast experience with ...
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