I-595 Express Corridor Improvements Project

TRANSPO 2012Tuesday, 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.

• 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

FACTORS DRIVING P3S

• Design/Build/Finance

• Design/Build/Finance/Operate/Maintain

• Operate/Maintain Concession

TYPES OF P3S

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

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024

Projects 1 thru 6 & 8 UNFUNDED Projects 7, 9, 10, & 10A

CONSTRUCTION YEARS

PROJECTS 1 THRU 10ACURRENT ANTICIPATED PLAN

Projects 1 thru 10APROJECTS 1 THRU 10APUBLIC – PRIVATEPARTNERSHIP (P3)

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

• 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 BENEFITS

• 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 CHALLENGES

• 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

P3 RECOMMENDATIONS

• 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

PAYMENT MECHANISMS: MAIN CONCEPTS

PAYMENTS TO CONCESSIONAIRE

2014 2015 2016 2017 2018 2019 2020 2044$0

$50

$100

$150

$200

$250

$300

20

6650

124

7195

123

217

4

I-595 Express Payment Structure

Final

Maximum Milestones Payment

Availability

Year

Paym

ents

(Mill

ions

)

SCHEDULEDCONSTRUC-

TIONCOMPLETION

JULY 2014

PERFORMANCE BASED CONTRACT

Unavailability Events Deduction*

• Rush Hour I-595 Lane Closure for 2 Hours$24,000

• Midday SR-84 Lane Closure for 2 Hours$12,000

• Late Night Ramp Lane Closure for 4 Hours $ 3,000

• Planned Maintenance $ 0

O&M Violations• Missed/Incomplete Inspection $ 2,000 (per)• Unacceptable Guardrail Performance $ 9,000 (day)

*Approximate Maximum Availability Payment (MAP) deductions based on $74M MAP ($64M base MAP escalated at 3% to year 2014)

• 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.

PERFORMANCE BASED CONTRACT

Concessionaire

Counsel

Concession Agreement

DB Contract

Tech

nica

l and

Leg

al A

dvic

e

Financing Agreements

Technical Advisor

Design-Build Contractor

Design Subcontractor

CEI O&M

Lenders

Design-Build Contractor

Design Management Construction/Operations Management

I-595 TEAM ORGANIZATION

TYPICAL SECTION

• 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

INNOVATIONS

Overall Schedule:• Execution of Agreement March 3, 2009• NTP 1 March 3, 2009• Advance Construction Activities June 15, 2009• NTP 2 (Take over O&M) July 31, 2009• Major Construction Feb. 26,

2010• Substantial Completion March 2014• Final Acceptance June 2014• O & M Period Ends July 2044

• 62% COMPLETE TIME / 60% COMPLETE MONEY

PROJECT SCHEDULE

PROJECT LIMITS

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Flam

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Broward Boulevard

Sunrise Boulevard

Peters Road

Griffin Road

To Miami

To West Palm Beach

To Miami

SW 1

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Port Everglades

FLLAirport

Segment CBergeron Land Development

Began February 201071% Complete

Segment ERanger Construction

Began April 201134% Complete

Project Limits

I-595 from I-75/Sawgrass Expressway Interchange to west of the I-95 Interchangeand Florida’s Turnpike from Griffin Road to Peters Road

Segment DRanger Construction

Began June 201058% Complete

Segment A/BPrince Contracting

Began November 201052% Complete

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

SHOULDER CLOSURE GATES –SWIFTGATES BY VERSILIS, INC.

LONGITUDINAL SLIDING GATE BY ENERGY ABSORPTION• 42 FT WIDE OPENING• REMOTE CONTROL OPENING

EMERGENCY ACCESS GATES

WARNING GATES AND ACCESS BARRIER GATES FOR REVERSIBLE RAMPS

VR-6 BY B&B ROADWAYHW-4 BY B&B ROADWAY

www.I-595.comQuestions?