P3 legislation, proposed projects and Long Beach courthouse. California
This is the third post of the series of posts on "PPP/P3 LEGISLATION IN THE UNITED STATES. ONE STATE, ONE POST". The second state of the series will be California. The situation of PPP's in California is the following:The Reason Foundation suggested a number of Californian toll road projects that could be procured as P3s following the signature of Senate Bill 4 (SB4) into law by Governor Arnold Schwarzenegger in February.At the time the report proposed four major projects costing a total of US$30.8bn. These were:- a toll tunnel between Glendale and Palmdale;- a network of HOT lanes for San Diego;- a toll truck lanes system linking the ports of Los Angeles and Long Beach with the Inland Empire;- a toll truck lanes system linking the Port of Oakland and Silicon Valley with I-5.Since then, it has developed further studies and added more projects to the list. With current market conditions and the rise of construction costs, prices have not been attached to these deals but each have been described as "multi-billion dollar mega-projects". These are:-HOT lanes network for the San Francisco Bay Area;-Tolled truck lanes on I-5 from Santa Clarita to I-80;-Tolled truck lanes on I-15 from Barstow to Nevada line;-HOT lanes network for greater Los Angeles (Los Angeles, Orange, San Bernardino, and Riverside Counties);-I-710 gap closure tunnel beneath South Pasadena;-Riverside-Orange County tunnel from I-15 to SR 241.The Reason Foundation concludes that many of these projects would be self-supporting from toll revenues, though the tunnel projects are the ones most likely to require a degree of state funding.P3 LegislationIn February Governor Schwarzenegger signed a bill permitting unlimited P3 projects through to 2017. It permits increased use of design-build contracts and allows P3 toll roads.The bill also allows for regional transportation agencies and Caltrans to enter into lease or concession agreements with a private entity for the DBFO of an unlimited number of P3s.Prior to the signing of the bill, only four transportation projects, two in Northern California and two in Southern California could be leased to the private sector. These P3s were limited to projects that were principally designed to improve goods movement. Previous legislation also prohibited a private entity from charging tolls or user fees to non-commercial vehicles.The statute authorizes both Caltrans and regional transportation agencies to pursue P3 procurements.Through the bill authorizes straight toll revenue concessions, Kessler noted an opportunity to structure availability payment lease agreements, pre-development agreements (PDAs) and other forms of public-private partnerships.Long Beach CourthouseCalifornia's Administrative Office of the Courts (AOC) has shortlisted three teams for the DBFOM of the Long Beach Courthouse P3, Infra-Americas can reveal.The new court building will be procured through California's Performance-Based Infrastructure (PBI) approach and will have a 35-year service agreement.The three shortlisted teams (in order of ranking) are:- California Judicial Partners (Meridiam Infrastructure-Edgemore Real Estate/ AECOM/ Clark Construction/ KPMG/ Johnson Controls);- Lankford-Phelps Long Beach Developers (HOK/ Carrier Johnson/ Hensel Phelps/ Pipar Jaffray/ Grubb & Ellis);- Balfour Beatty Capital (Perkins & Will/ Heery/Barnhart/ Barclays/ Linc Facilities).The AOC ranked the top five consortia, although two did not make the shortlist. They were:- Long Beach California Courthouse Consortium (Macquarie Capital Markets/ KMD/MLA/ Charles Pankow/ Goldman Sachs/ ABM);- Acciona/ HSBC/ SOM/ Webcor/ RBC Capital/ Parsons Brinkerhoff.If successful, the Long Beach Courthouse P3 will be the first true availability-based social infrastructure deal in the US, the first availability-based highway p3 project was the I-595 that is being developed by ACS Infrastructure development and Dragados USA.