I-595 Express Corridor Improvements Project TRANSPO 2012 Tuesday, October 30, 2012 Kelley Hall, PE – FDOT Project Engineer WHAT ARE P3S? Public Private Partnerships (P3s) are contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of infrastructure projects. FACTORS DRIVING P3S • • • • • • • • Estimated $47 billion gap in transportation funding Accelerate high priority projects Maximize quality of facility and service provided Encourage long-term efficiency Lock in long term fixed price (cost savings) Encourage Innovation Established international P3 market and industry Federal and state actions that support P3s: – Federal: SEP-14, SEP-15, SAFETEA-LU – State: P3 law, Turnpike and Expressway Authorities, Innovative Contracting law TYPES OF P3S • Design/Build/Finance • Design/Build/Finance/Operate/Maintain • Operate/Maintain Concession DESIGN-BUILD-FINANCE-OPERATE-MAINTAIN CONSIDERATIONS • Strong Market interest • • Lifecycle cost and O&M performance benefits Allows repayment outside the State’s work program • Appropriate risk transfer • Flexibility for future transportation needs • Flexibility to retain (or transfer) control of toll policy and collection • Value for Money analysis will determine if cost savings from DBFOM are likely to offset additional financial cost WHY WAS P3 CONSIDERED FOR I-595? • Accelerates the schedule • Advances noise wall construction • Provides capacity improvements a minimum of 15 years sooner than the Initial (conventional) plan • Provides finance mechanism for funding shortfall • Potential to deliver long-term cost savings and higher levels of service • Industry Innovation CONSTRUCTION YEARS 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 PROJECTS 1 THRU 10A CURRENT ANTICIPATED PLAN PROJECTS 1 THRU 10A PUBLIC – PRIVATE PARTNERSHIP (P3) Projects 1 thru 6 & 8 Projects 1 thru 10A UNFUNDED Projects 7, 9, 10, & 10A P3 BENEFITS • Innovation • Possible private equity • Access to global capital markets • Outside engineering expertise and management practices • Transfer appropriate risk • Long term contract (relationships) • Can provide “stability” in pricing • Economy of Scale (cost savings) • Public benefit delivered earlier P3 CHALLENGES • Loss of control or perceived loss of control – Day to Day Management – Setting toll rates, performance standards • “Cherry picking” by the private sector • Learning curve in negotiating & managing P3s • “Real” transfer of risk (will cost real money) • Long term contract (relationships) P3 RECOMMENDATIONS • Pick the right projects • Be flexible and transparent during the process • Secure government and community stakeholders’ support • Be patient and start at the right time • Secure outside experts with P3 experience • Be clear, consistent and persistent PAYMENT MECHANISMS: MAIN CONCEPTS • True Toll Payment – The P3 Firm collects all tolls as payment • Shadow Toll Payment – Payment is based on a pre-determined price per vehicle the Owner will pay the P3 firm • Pure Availability Payment – Payment is based on facility being available less deductions for specific contract requirements • Variation of above – A portion of all or some of the above could be done PAYMENTS TO CONCESSIONAIRE I-595 Express Payment Structure $300 Payments (Millions) $250 SCHEDULED CONSTRUCTION COMPLETION Final Maximum Milestones Payment $200 Availability 217 $150 124 123 95 71 $100 4 $50 50 66 20 $0 2014 2015 2016 2017 2018 Year 2019 2020 2044 PERFORMANCE BASED CONTRACT Unavailability Events • Rush Hour I-595 Lane Closure for 2 Hours • Midday SR-84 Lane Closure for 2 Hours • Late Night Ramp Lane Closure for 4 Hours • Planned Maintenance O&M Violations • Missed/Incomplete Inspection • Unacceptable Guardrail Performance Deduction* $24,000 $12,000 $ 3,000 $ 0 $ 2,000 (per) $ 9,000 (day) *Approximate Maximum Availability Payment (MAP) deductions based on $74M MAP ($64M base MAP escalated at 3% to year 2014) PERFORMANCE BASED CONTRACT • Availability Faults and O&M Violations will also result in the assessment of Noncompliance Points. • These points will be tracked through the life of the project. • Noncompliance Points trigger increased monitoring – 50 points in 1 year – 75 instances in 3 years – 100 points in 3 years • Persistent Noncompliance Points may result in default. I-595 TEAM ORGANIZATION Construction/Operations Management Design Management Concession Agreement Concessionaire DB Contract Financing Agreements Design Subcontractor CEI O&M Lenders Technical and Legal Advice Design-Build Design-BuildContractor Contractor Technical Advisor Counsel TYPICAL SECTION INNOVATIONS • • • • • • • • • • 1st DBFOM P3 in Florida 1st Availability Payment P3 in the US Reversible Toll Lanes (six lanes for the price of three) Congestion Pricing State of the Art Emergency Access and Infrastructure – Fire suppression system – Emergency access gates 35-year Operations and Maintenance (O&M) Direct Connections to Florida’s Turnpike Oversight CEI Express Bus Service Shared-use Drainage PROJECT SCHEDULE Overall Schedule: • • • • • • • • Execution of Agreement NTP 1 Advance Construction Activities NTP 2 (Take over O&M) Major Construction Substantial Completion Final Acceptance O & M Period Ends March 3, 2009 March 3, 2009 June 15, 2009 July 31, 2009 Feb. 26, 2010 March 2014 June 2014 July 2044 • 62% COMPLETE TIME / 60% COMPLETE MONEY PROJECT LIMITS To West Palm Beach Segment C Bergeron Land Development Sunrise Boulevard Began February 2010 71% Complete To Naples Broward Boulevard Davie Road University Drive Pine Island Road Nob Hill Road Began November 2010 52% Complete Hiatus Road Segment A/B Prince Contracting Flamingo Road SW 136 Avenue Peters Road Griffin Road Segment E Ranger Construction Began April 2011 34% Complete FLL Airport Segment D Ranger Construction To Miami Began June 2010 Project Limits 58% Complete To Miami I-595 from I-75/Sawgrass Expressway Interchange to west of the I-95 Interchange and Florida’s Turnpike from Griffin Road to Peters Road Port Everglades I-595 PROJECT CHALLENGES • Communications • Procurement vs. Implementation Team • Aggressive Schedule • Teamwork • FDOT in Oversight Role I-595 EXPRESS BEST PRACTICES • Established project specific Business Plan • Materials: Established a well-defined process for quality control and quality assurance • Co-location: FDOT, Concessionaire, Contractor, Designer and OCEI • O&M: Performance Based Program • Customer service: PIO on both the Concessionaire and FDOT side • Proper balance of performance and prescriptive requirements • Appropriate Risk allocation • Audits to verify project performance REVERSIBLE LANE OPERATION Morning Movement - EB Access Open N REVERSIBLE LANE OPERATION Afternoon Movement - WB Access Open N EMERGENCY ACCESS GATES LONGITUDINAL SLIDING GATE BY ENERGY ABSORPTION • 42 FT WIDE OPENING • REMOTE CONTROL OPENING SHOULDER CLOSURE GATES – SWIFTGATES BY VERSILIS, INC. WARNING GATES AND ACCESS BARRIER GATES FOR REVERSIBLE RAMPS HW-4 BY B&B ROADWAY VR-6 BY B&B ROADWAY www.I-595.com Questions?