Recipe for success: recent developments in the US transportation sector 1
by Patrick D. Harder and Margo E. Bennett, Nossaman LLP Successful PPPs in the US market require private sector support, public sponsor and stakeholder support, engaged and committed capital markets, and deal structures that are sufficiently flexible to respond to unexpected events and forces. The financial close of the 595Express deal in Florida and two successful PPP procurements in Texas highlight that all the key ingredients for success are in place. As the credit markets thaw, a greater volume of successful PPPs should be possible.
Developing the recipe
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In January 2009, President Barack Obama signalled an ambitious plan to revive infrastructure development and delivery as part of an overall effort to restore the US economy and stature. In his inaugural speech he proclaimed, “We will build the roads and bridges, the electric grids and digital lines 2 that feed our commerce and bind us together.” Beyond the broad pronouncements and the photo opportunities, states are developing ways to leverage federal stimulus funds and their own dwindling state transportation funds to spark their state economies, generate jobs, and address critical state transportation needs. The pressure is on at both the state and federal levels to get ‘shovels in the dirt’, as many of the stimulus funds for transportation infrastructure have strict time limits. While the stimulus funds are beneficial, they do not address the extent of the need, and in many cases will only partially compensate for shortfalls in state transportation budgets. So private capital and PPPs have and will continue to serve as an important tool to address the gap between infrastructure needs and resources in the US.
financial close in the past year. Requests for proposals on PPP procurements have generated a healthy level of competition. Government support for transportation PPPs has never been stronger, with the number of PPP procurements in the pipeline hitting unprecedented levels. Moreover, legislative bodies are, for the most part, responding positively to this trend by giving state agencies the necessary statutory tools to establish well-run PPP programmes. The prominence of transportation needs and funding in policy discussions and several federal policy initiatives on transportation issues also portend an era of increasing PPP activity in the transportation sector. Given the dynamic nature of PPP policy and current economic conditions, successful transactions are providing private partners with the greater predictability they need in PPP procurements and contract documents, while allowing public agencies to maintain a healthy level of flexibility to adapt their project-specific procurement and contracting structures to realities on the ground. As the credit markets start to loosen, the necessary ingredients are in place for an increasingly robust programme of transportation PPPs.
Gathering the ingredients
1. Private sector interest
Successful PPPs require a combination of four key ingredients: private sector support, public sponsor and stakeholder support, engaged and committed capital markets, and deal structures that are sufficiently flexible to respond to unexpected events and forces. For the last year, news of the economic downturn in general, and the severe tightening of the credit markets in particular, has overshadowed positive developments and conditions that are conducive for PPP success in the US. The private sector continues to demonstrate a bullish approach to the US PPP market. A number of deals defied the odds and achieved commercial or
The precedent setting financial close on the 595Express project in Florida, two recent contract awards on complicated PPP transactions in Texas, and the significant responses to requests for qualifications and proposals on the substantial number of PPPs in the pipeline all demonstrate that the private sector remains keenly interested in the US PPP market as a worthy investment opportunity.
595Express In one of the most important deals in years, the Florida Department of Transportation (FDOT) and a consortium led by ACS Infrastructure Development (ACSID) defied international economic turmoil to reach financial close in March 2009. The 10.5-mile,
US$1.8bn 595Express project involves the reconstruction of portions of the existing Interstate 595 in Fort Lauderdale and the addition of three new reversible lanes in the median to be managed as variable toll lanes using open-road tolling technology. The project is the first in the US to be developed using an availability payment concession and will be the largest construction project ever undertaken by FDOT. In addition to annual availability payments paid during the operating period of the 35-year term, FDOT will pay the concessionaire significant lump sum payments starting at final acceptance and continuing for six years thereafter. The private sector commitment to this PPP project was tested in the extreme as proposals were due in September 2008, just as the credit markets began tightening to levels unprecedented in modern times. Despite the exceptional circumstances, ACSID’s construction estimate was well below the state’s estimated project cost. ACSID’s initial financing plan contemplated issuing US$826m in private activity bonds (PABs). Deteriorating market conditions, especially in the bond market, however, required ACSID to change
quickly from its planned financing structure to a structure involving bank financing. Luckily, FDOT had reserved sufficient flexibility for itself in its procurement documents, so could authorise this shift to a new financing solution without skipping a beat. Despite incredibly tight credit markets, ACSID was able to arrange a club financing of 12 international banks and thereby close the financing on schedule and within FDOT’s affordability limit.
North Tarrant Express In January 2009, the Texas Transportation Commission conditionally awarded the North Tarrant Express project to a Cintra-Meridiam team. Operating in the shadow of the credit crisis and despite an extended procurement period, the Texas Department of Transportation (TxDOT) received multiple bids for this 52-year concession to design, build, finance, operate, and maintain an initial 13-mile corridor (including an approximately US$2bn investment for construction and long-term maintenance). The high priority managed lanes project, involving one of the most heavily congested highways in the Dallas-Fort Worth metropolitan area, will double the existing number of lanes
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through the addition of new variably priced toll lanes and will include reconstructing free lanes. The initial finance plan submitted by the winning team includes US$570m of public subsidy, a federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan of up to US$600m, US$370.4m in equity and US$300m each in senior bank debt and tax-exempt PABs. Notably, the proposed financing includes an equity contribution from the Dallas Police and Fire Pension System, which the pension announced is the first time a US pension fund has directly invested in a toll road project. TxDOT anticipates reaching both commercial and financial close in 2009.
project consists of reconstruction of the IH 635 general purpose lanes, new construction of managed lanes, reconstruction of existing frontage roads, and construction of new frontage roads. After an initial six-month ramp-up period, variable pricing will apply to the managed lanes. TxDOT had up to US$700m in public funds available to contribute to the project, but the Cintra-Meridiam proposal contemplates needing only US$445m of the available public subsidy. The Federal Highway Administration granted the project one of 15 slots in its Express Lanes Demonstration Programme.
IH 635 Managed Lanes
The private sector’s enhanced interest in and support for US transportation PPPs is also apparent 3 from the growing pipeline of projects. Figures 1 and 2 summarise noteworthy developments in the status of projects and initiatives throughout the US during the second half of 2008 and the first half of 2009.
In February 2009, the Texas Transportation Commission conditionally awarded another 52-year concession to a Cintra-Meridiam team. The estimated capital value of the technically challenging 17-mile project in Dallas County is US$2bn. The
Other greenfield projects
Figure 1: Greenfield developments
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Project
Public sponsor
Estimated value (US$)
Current status
Noteworthy developments
595Express
Florida DOT
US$1.8bn
Reached financial close
FDOT received proposals in September 2008 for the project, the first to be developed in the US using an availability payment concession. FDOT and an ACS Infrastructure Development consortium reached financial close in March 2009.
Mid-Currituck Bridge
North Carolina Turnpike Authority
US$636m
Reached commercial close
NCTA issued its RFP in September 2008 and shortlisted three proposers. In December 2008, NCTA selected a team led by ACS as the preferred bidder on a procurement of a proposed sevenmile bridge across the Currituck Sound, to be developed through a pre-development agreement, which includes the right to negotiate a long-term concession agreement. The parties achieved commercial close in April 2009.
North Tarrant Express
Texas DOT
US$2bn
Conditional award
TxDOT received proposals and conditionally awarded the project to the Cintra-Meridiam team in January 2009.
IH 635 Managed
Texas DOT
US$2bn
Conditional award
TxDOT received proposals in January 2009 and conditionally awarded the concession to a Cintra-Meridiam team in February 2009.
I-69/TTC
Texas DOT
No estimate available
Conditional award
TxDOT received proposals in April 2008. A Zachry/Dragados team was selected as the preferred bidder in summer of 2008 to develop a 1,000km corridor. Commercial close is anticipated in spring 2009.
Project
Public sponsor
Estimated value (US$)
Current status
Noteworthy developments
I-95 HOT Lanes
Virginia DOT
US$900m
Under negotiation
VDOT and Fluor/Transurban continue to negotiate the project finance plan.
Airport Parkway Project
Mississippi DOT
US$500m
Proposals expected
Mississippi issued an RFP for this 12-mile toll road facility in March 2009 to three shortlisted teams, led by ACS/Dragados, Cintra/Ferrovial, and Global Via. Proposals for the 50year concession are expected in the spring of 2009.The project will be both the first PPP project and the first toll road project advanced in the state.
Route 460 Corridor Improvements
Virginia DOT
US$800m – US$1bn
Under review
VDOT issued a request for detailed proposals in December 2008 for a concession to develop and operate a new 55-mile tolled highway.The maximum concession term is 94 years. Proposals from three shortlisted teams (led by Cintra, Itinere, and Skanska/Macquarie) are due in August 2009 with preferred bidder selection and contract award scheduled to occur by year-end.
Port of Miami Tunnel
Florida DOT
US$1.3bn
Under review
The project remains under review by FDOT.
First Outer Coast Beltway
Florida DOT
US$2bn
Under review
The project is under suspension pending environmental approvals and resolution of local property tax issues.
Downtown Tunnel/ Midtown Tunnel/MLK Freeway Extension
Virginia DOT
US$1bn
Conceptual proposal received
VDOT received one proposal in response to its May 2008 request for conceptual proposals for this DBFOM project. An independent review panel is currently evaluating that proposal, received from a Skanska/Macquarie/Kiewit consortium, to determine whether or not the team will be asked to submit a detailed proposal and/or negotiate for a comprehensive agreement.
Knik Arm Crossing
Knik Arm Bridge and Toll Authority (Alaska)
US$600m
Teams shortlisted
Procurement and issuance of the RFP are on hold while the agency works on environmental permits.
FasTracks Rail Programme Eagle P3 Project
Denver Regional Transportation District (Colorado)
US$6bn estimated for entire FasTracks programme B
Teams shortlisted
In October 2008, three teams submitted qualifications statements to pursue a single, 50-year availability payment concession contract to DBFOM the East Corridor, Gold Line and commuter rail maintenance facility components of the FasTracks programme.The RTD shortlisted all three teams and intends to issue the final RFP in May 2009, with selection of a preferred bidder and financial close expected in 2010.
Monfayette Expressway/Southern Beltway
Pennsylvania Turnpike Commission
US$4.5bn
Expressions of interest received
In September 2008, the PTC issued a request for expressions of interest for private partners to DBFOM unfinished segments of the Expressway and Beltway. PTC received expressions of interest in January 2009 from HDR/Kimball, Global Via/URS and ACS/Dragados. A formal RFP is expected later this year.
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Project
Public sponsor
Estimated value (US$)
Current status
Noteworthy developments
Jefferson Parkway
Jefferson Parkway US$835m Public Highway Authority (Colorado)
Request for expressions of interest issued
In January 2009 the Authority issued a request for expressions of interest to DBFOM, a 13-mile toll road.The agency intends to issue a formal RFP later this year.
Oakland Airport Connector (California)
Bay Area Rapid Transit District
Project to be reprocured
In February 2009, after failing to receive any final proposals in response to its 2007 RFP, BART announced plans to reprocure the project as a design-build project, possibly using lower cost technology. New procurement is scheduled to commence by midyear.
California High Speed Rail Projects
California High Speed US$4.5bn – In planning Rail Authority US$7bn (estimated value of PPP opportunities)
Los Angeles County Los Angeles County Metropolitan Transit Metropolitan Transit Agency PPP Programme Agency (California)
South I-205 Corridor Managed Lanes Project
US$500m
No estimates yet available
Oregon DOT
Voters approved a US$9.95bn high speed train bond in November 2008.The American Recovery and Reinvestment Act includes US$8bn for unspecified high-speed rail projects.
In planning
In May 2008 the LA Metro received US$210m in grants as part of the US DOT Urban Partnerships programme to convert carpool lanes into congestion pricing toll lanes. LA Metro is developing a PPP programme to identify specific highway and transit projects that can be delivered through PPPs and hired a PPP advisor team in April 2009.
On hold
This project, one of three projects Macquarie was evaluating as part of a 2005 PPP agreement, is currently on hold pending development of a tolling policy and pre-NEPA work.
Source: Nossaman LLP
2. Public sector commitment In the last year, the economic downturn and constraints in the credit market have magnified the importance of infrastructure development as well as the need for fundamental changes in how such projects are developed and financed. Governments at the federal, state, and local levels have been responding.
Federal level The federal government has indicated its support for PPPs through programmes, new and pending legislation, as well as federal agency reports. PPP programmes. One of the most important federal PPP-related programmes, the TIFIA Programme, has been a lynchpin in the success of all three of the PPPs discussed above. The potential expansion of TIFIA and other federal credit assistance programmes through the American Recovery and Reinvestment Act as well as anticipated enhancements as part of the surface transportation
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reauthorisation should give other projects in the pipeline the extra financial support needed to achieve success. While it is too early to say whether this support will translate into actual increased PPP opportunities and deal flow, when considered in light of continuing budget shortfalls at all levels of government, there is an increased likelihood of governmental initiatives to maximise the development of needed infrastructure by using PPPs. American Recovery and Reinvestment Act of 2009. The American Recovery and Reinvestment Act of 4 2009 (the stimulus package) enacted in February nearly doubles the amount of federal funds available in a single year for transportation infrastructure, with US$48bn approved for all modes of surface transportation. Up to US$200m of the US$1.5bn in discretionary grants for capital investments in certain surface transportation infrastructure may be set aside for TIFIA, to compensate for the current
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Figure 2: Brownfield developments Public sponsor
Estimated value (US$)
Current status
Noteworthy developments
Port of Oakland Outer Harbor Terminal
Port of Oakland (California)
US$700m
Preferred bidder selected
Nine teams responded to the Port’s May 2008 RFQ for this 50-year concession agreement to upgrade and operate the Port’s marine terminals with an option for two additional terminals. After shortlisting five teams, the Port issued an RFP in December 2008. In March 2009, the Port announced the award of the concession to Ports America Oakland, a partnership between Ports America and Terminal Investments.
Luis Munoz Marin International Airport Parking Facilities and PR 22 Tollroad
Puerto Rican Port and Highway Authorities
Pennsylvania Turnpike
Pennsylvania DOT
US$12.8bn
Procurement suspended
In 2008 Governor Rendell solicited proposals for a 75-year concession of the Turnpike. Legislative approval was required. The preferred bidder, Albertis, allowed its US$12.8bn bid to expire after the General Assembly failed to approve the lease. Governor Rendell has indicated he may renew his efforts to lease the Turnpike in 2009.
Alligator Alley
Florida DOT
US$350m US$650m
Proposals expected
In August 2008, after shortlisting six teams, FDOT issued an RFP for a toll concession of a 78-mile section of I-75. FDOT has extended the proposal deadline to May 2009.
Project
Under review
Source: Nossaman LLP
shortfall in federal credit available for the programme.A number of bond related provisions, including tax credits, may encourage mutual funds and private equity funds to invest in infrastructure bonds. The Act also provides US$8bn in funding for a national high-speed rail system. Many of these programmes can provide opportunities for private sector investment. 6 Congressional Advisory Commission. Reports from congressional advisory commissions on infrastructure development and financing also signal a shift away from traditional strategies. In February 2009, the National Surface Transportation Infrastructure Financing Commission (Financing 7 Commission) issued its final report to Congress. The comprehensive report concluded that current transportation-related revenues from federal fuels taxes are insufficient and unsustainable as increasing fuel efficiency means they are no longer closely tied 8 to the use of the transportation system. The report
presented a number of recommendations supportive of PPPs, including: federal support for state and local governments’ use of congestion pricing, expansion of existing federal credit programmes such as TIFIA and PABs, and new incentives for states to tap into private sector capital to address transportation funding shortfalls. The report underscores the growing support for alternative funding mechanisms – including PPPs – as well as the urgent need to develop a sustainable long-term policy for the development and maintenance of transportation infrastructure. President Obama’s proposed budget. On the same day the Financing Commission released its report, President Obama released the Administration’s proposed budget, hinting at support for PPPs with the following language: “Surface transportation programmes are at a crossroads.The current framework for financing and allocating surface transportation investments is not
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Figure 3: Legislative developments
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State
Status and description of legislation
Alabama
Pending. The Alabama Senate is considering a bill which has passed the House authorising the use of PPPs to deliver toll road projects.
Arizona
Pending. After two broad PPP bills failed in the state senate in 2008, three other bills are currently pending.The Arizona legislature appears to be close to enacting general PPP enabling legislation, which passed the House in early April.Two parallel bills are pending in the state senate.The bills have support from key legislators and industry, and no opposition is expected from the Governor.
California
Passed. In February, Governor Schwarzenegger signed broad PPP legislation, establishing legislative authority for PPPs in transportation through 2017.The law allows for both solicited and unsolicited proposals, and provides that project selection by the California Transportation Commission will be based on specified performance measures. A separate bill is pending in the legislature that would extend the right to local governmental agencies to use private investment capital to design, construct, finance, maintain, and operate fee-producing infrastructure facilities.
Colorado
Passed. In March 2009, Governor Ritter signed legislation replacing the existing toll agency with a new regional transportation authority with a charter to pursue PPPs and other innovative means of building surface transportation.This action followed the June 2008 passage and signing of a law authorising the sale or lease of non-state owned toll highways.
Florida
Pending. Bills are pending in both the House and Senate proposing to amend the existing PPP authority, including revisions to the requirements for approval of PPP agreements, required provisions in leases of existing toll facilities, and restrictions on the use of proceeds from facility leases. A bill to clarify that concessionaires are not subject to ad valorem taxes on the property rights granted in connection with PPP transactions has passed the House and is pending in the Senate.
Georgia
Pending. As part of Georgia’s reorganisation of its PPP programme and efforts, Governor Sonny Perdue introduced a bill that would allocate broad powers to engage in PPPs to a newly created Georgia Transportation Authority.The legislature passed a substantially modified version of that bill.The bill, which is awaiting action from the Governor, creates a new director of planning to be appointed by the governor and reassigns some of the powers previously held by the State Transportation Board, but does not create the new transportation authority sought by the Governor.
Hawaii
Pending. The legislature is considering a bill that would grant the Department of Transportation broad powers to enter into PPPs for transportation projects.The bill passed the House and is currently pending in the Senate.
Maryland
Pending. Bills are pending in both the House and Senate proposing to amend the existing PPP authority.While the bills appear to target a particular redevelopment project, the proposed legislation would restrict the ability of Maryland’s Department of Transportation and Maryland’s Transportation Authority to enter into PPP agreements by revising the requirements for approval of the agreements between the public agencies and private entities.
Massachusetts
Pending. Bills granting broad transportation PPP authority have been introduced in both the House and Senate.
Michigan
Pending. In November 2008, a transportation funding task force created by 2007 legislation issued its report identifying the significant funding gap for state transportation projects and exploring PPPs and other options.The state also hired financial advisors to help screen and provide assistance for PPP projects. Enabling legislation, which may be pursued during the current legislative session, is still needed to implement a comprehensive PPP programme.
Mississippi
Passed. In June 2008, Governor Haley Barbour signed legislation amending the existing PPP legislation. Among other items, the amendments increase the maximum concession term from 30 to 50 years and establish a detailed toll collection and enforcement scheme.
Nevada
Defeated and pending. After toll lane legislation failed to pass in 2007, the Nevada state legislature considered two bills that would enable toll legislation and encourage PPPs for transportation projects.The bills, which would have authorised two demonstration toll road projects to be delivered using PPPs, failed to advance in the current legislative session. A third bill, which has passed the Senate and is pending in the Assembly, establishes a framework for toll road construction in Nevada, but requires a commission including the governor, lieutenant governor, and legislators to approve any privately funded toll roads.
New York
Ordered. Governor David Paterson signed an executive order establishing the New York State Commission on State Asset Maximization to study potential PPPs for the State of New York.
Ohio
Defeated. In Ohio, efforts to develop a framework for use of PPPs in the development of new capacity for surface transportation projects through the creation of local transportation innovation authorities failed to pass as part of the transportation appropriations bill.
South Carolina
Pending. A bill referred to as the ‘Transportation Infrastructure Funding Act’ has been introduced in the Senate. If passed into law, the legislation would broaden the existing PPP authority of the Department of Transportation.
Texas
Pending. Following the SB792 legislation that placed a partial moratorium on the development of private toll roads a blue ribbon panel produced the ‘SB 792 Report’ which was largely positive about the use of PPP’s provided the best practices to safeguard the public interest are followed. Echoing the 2007 legislative session, the Texas legislature is considering a number of bills proposing to amend TxDOT’s existing PPP authority. SB 17 proposes a major overhaul of the existing law, including the local public entities’ right of first refusal to develop roads, with the option to turn to the private sector only after all public avenues of financing have been exhausted. The bill also establishes the parameters for termination compensation if the state ever needs to terminate the contract early and buy the project back from the private sector.The bill would also limit the developer’s rights to be compensated for the impacts resulting from the state’s development of competing facilities to a period of 30 years. Other bills that have passed at least one of the houses include proposals to increase legislative oversight of TxDOT and the Texas Transportation Commission, limit conversion of non-tolled state highways to tolled projects, prohibit the payment of up-front concession payments from private developers, and restrict a private developer’s ability to obtain performance security from local toll project entities providing the developer with tolling services,The 2009 legislature is also anticipated to address the current August 31, 2009 date in which TxDOT’s current PPP authority is scheduled to sunset.
Virginia
Pending and defeated. In its 2009 session, the Virginia General Assembly approved a bill amending the PublicPrivate Transportation Act of 1995 so as to allow certain concessionaires, regardless of size, to apply for private activity bonds from the state’s Small Business Financing Authority. A bill that would have required VDOT to accelerate its processing of PPP proposals was defeated, as was a bill that would have subjected PPP concessionaires to Freedom of Information Act disclosure requirements for all project-related documentation. Finally, a bill that would have required competitive bidding of all facets of authorised PPP projects with a value in excess of US$1bn failed to make it out of committee.
Source: Nossaman LLP
financially sustainable; nor does it effectively allocate resources to meet our critical national needs.The Administration intends to work with the Congress to reform surface transportation programmes to put the system on a sustainable financing path and to make investments in a more sustainable future...To do so, the Administration will emphasise the use of economic analysis and performance measurement in transportation planning. This will ensure that taxpayer dollars are better targeted and spent.” Authorising legislation.The reauthorisation of the federal surface transportation programmes will be a major issue for the current Congress. The current authorisation, known by its acronym SAFETEA-LU, expires on September 30, 2009. The reauthorisation effort likely will include discussions of a comprehensive transportation funding strategy, and consideration of the congressional advisory recommendations. In addition to addressing the depleted Highway Trust Fund and exploring the creation of a national infrastructure bank and related proposals, many expect the reauthorisation will provide greater opportunities for PPPs, including through an increased commitment to TIFIA and PABs. USDOT advisory reports. In the past year, the US Department of Transportation issued two papers supportive of the use of PPPs in the delivery of 9 transportation infrastructure. Both reports acknowledge the need for PPPs as a delivery method and offer implementation recommendations to state and local governments.
State and local level The unprecedented level of commitment state and local governments have demonstrated toward PPPs in the last year is reflected in both the PPP pipeline (see Figures 1 and 2) and in legislative developments. Figure 3 summarises the status of new and pending legislation in states across the nation, including in states whose legislatures were still in session at the time of publication.
3. Capital market support Support of the capital markets is, of course, another critical ingredient for the successful development of any PPP project or programme. Given current economic conditions, it should come as no surprise that meaningful capital market support has been especially difficult to find in the past year. And yet there are many bright spots in the credit market where infrastructure is concerned. Most dramatic is the financing of the 595Express transaction by a club of 12 banks. In fact, ACSID reported the club was oversubscribed.This strong interest among lenders was the result of the high degree of lender confidence in the concessionaire – based on its long and successful history on PPPs throughout the world, together with the perceived fairness of the risk allocations and lender rights provisions in the contract documents. This experience underscores the importance public sponsors should place on developing predictable, bankable documents that will enable the private sector to expeditiously obtain
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necessary financing commitments from the lending community, especially in these challenging times.
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4. Adaptability and flexibility Adaptability and flexibility, while perhaps less tangible than the other ingredients, is nevertheless essential to a smooth and ultimately successful PPP procurement and contracting structure. Changing circumstances are a given over the course of a procurement, and certainly over the course of a long-term concession. The parties’ ability and willingness to respond to these inevitable changes in a productive way will hinge on the flexibility built into the procurement and contract documents, and their willingness to work together in the true spirit of the partnership they create. On the 595Express transaction, for example, the financing structure contemplated in the winning proposal called for the issuance of PABs coupled with a TIFIA loan. Unfortunately, soon after FDOT awarded the contract, the market for PABs or other AMT debt collapsed. Because of the flexibility built into the procurement documents and the parties’ willingness to work cooperatively, they were able to move seamlessly to a bank financed solution and keep the financial close on schedule. Less flexible project participants or procurement documents would not have been able to accomplish this and the transaction would have been jeopardised.
Conclusion The US transportation infrastructure PPP market has been evolving for almost two decades.Through trial and error and heavy borrowing of lessons learned from other countries, a recipe for a publicprivate collaboration that will be successful in the US market has emerged. Dedication and commitment from public sponsors and the private sector, engaged capital markets, and an adaptable and flexible model should allow the US to ‘lay a new foundation for growth’ as President Obama inspired the country to do.
Notes: 1
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The authors wish to express their thanks to Geoffrey S.Yarema and Anne Marie Ruff who assisted in the preparation of this article.The views expressed in this article do not necessarily reflect the views of the firm’s clients.
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President Barack Obama, Presidential Inaugural Address (January 20, 2009). Many of these projects were described in ‘More Projects, More Refinements: Recent PPP Developments in the US Transportation Sector’ by Barney Allison and Brandon Davis, published in the 2008/09 edition of this review. American Recovery and Reinvestment Act of 2009, Pub. L. No. 111-5 (2009). The figure does not include several possible airport concessions, including; New Orleans, Kansas City, Minneapolis – St. Paul, Milwaukee and the notable events surrounding Chicago Midway. The National Surface Transportation Infrastructure Finance Commission was established pursuant to the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy for Users, Pub. L. No. 109-59, §11142, 119 Stat. 1144, 1961 (2005). Geoffrey S.Yarema, a contributor to this article, was appointed by former US Secretary of Transportation, Mary Peters, to serve as a member of the Financing Commission. The final report can be downloaded at http://financecommission.dot.gov/Documents/NS TIF_Commission_Final_Report_Advance%20Cop y_Feb09.pdf See ‘Innovation Wave: An Update on the Burgeoning Private Sector Role in US Highway and Transit Infrastructure,’ US Department of Transportation (July 2008) and ‘Public Policy Considerations in Public-Private Partnership (PPP) Arrangements’, US Department of Transportation, Federal Highway Administration (January 2009). Authors: Patrick D. Harder Infrastructure Attorney Margo E. Bennett Infrastructure Attorney Nossaman LLP 445 South Figueroa Street, 31st Floor Los Angeles, CA 90071, US Tel: +1 (213) 612 7800 Email:
[email protected] [email protected] Website: www.nossaman.com
