Infra Insight Blog

ARTBA Awards TxDOT P3 Deal of the Year and Amadeo Saenz Entrepreneur of the Year

Christine Ryan — Fri, 23 Jul 2010 12:51:58 -0800

Producing ground breaking advancements in transportation infrastructure is not without its challenges, highlighting the importance of celebrating each success. Today our client, the Texas Department of Transportation (TxDOT) and the organization’s Executive Director, Amadeo Saenz, are being recognized for their paradigm shifting approach to building roads.

The American Road & Transportation Builders Association (ARTBA) is holding their 22nd Annual Public Private Partnerships in Transportation Conference in the nation’s capital. In what is being called a sweep, TxDOT has been awarded “P3 Project of the Year” for both the North Tarrant Express and the LBJ-635 Express projects, and Amadeo Saenz has been awarded “Public Sector Entrepreneur of the Year.” Cintra’s U.S. President, Nicolas Rubio, was awarded “Private Sector Entrepreneur of the Year.”

A well-respected organization established in 1902, ARTBA is the oldest national transportation construction-related association and the first to articulate a need for a federally-built network of Interstate highways. For 21 years the organization has assembled leaders in the transportation industry at this annual conference to discuss key transportation issues, including the private financing of transportation infrastructure projects.

Final RFP for the Presidio Parkway Project Released

Edmund Caplicki — Mon, 12 Jul 2010 10:14:30 -0800

Following extensive industry review of the draft Request for Proposals, on Friday, July 9, 2010, the California Department of Transportation, in coordination with the San Francisco County Transportation Authority, issued the final Request for Proposals for the Presidio Parkway Project. According to the latest procurement schedule in the Request for Proposals, technical proposals are due on September 10, 2010, and financial proposals are due on September 24, 2010.

The Presidio Parkway Project is the first public-private partnership procurement under California's new public-private partnership law, Section 143 of the Streets and Highways Code. For more about the Presidio Parkway Project and Section 143, see Presidio Parkway Reaches Two Important Milestones and Presidio Parkway Project RFQ Issued.

FRA Announces Availability of $2.345 Billion in FY 2010 High-Speed and Intercity Passenger Rail Funds

Donald Itzkoff — Fri, 09 Jul 2010 10:01:49 -0800

On July 1 the Federal Railroad Administration (FRA) issued two Notices of Funding Availability (NOFA) for high-speed and intercity passenger rail (HSIPR) development.

The NOFA for service development programs, published at 75 Fed. Reg. 38,344 (PDF), outlines selection criteria and application procedures for $2.1 billion in FY 2010 HSIPR funds. A second NOFA addressing $245 million available for individual construction projects within a corridor, was published at 75 Fed. Reg. 38,365 (PDF).

Applications pursuant to these NOFAs are due to FRA by August 6. Grant awards are expected to be announced by September 30.

The NOFAs both indicate that FRA is preparing draft guidance to establish a long-term framework for the HSIPR program. This forthcoming guidance does not apply to the $2.3 billion in FY 2010 HSIPR funding but is intended to provide further clarification about future project development processes (from planning and design through construction and operation), and technical assistance for successful project development and delivery. FRA has stated that outreach on proposed new guidance will begin this fall.

FY 2011 THUD House Markup

On July 1 the House Appropriations Subcommittee on Transportation, Housing and Urban Development approved FY2011 THUD appropriations. Under this mark, HSIPR would receive $1.4 billion (PDF) in FY 2011, an increase of $400 million over the President’s request but a decrease of $1.1 billion compared with the FY 2010 funded level of $2.5 billion.

Additionally, Amtrak would receive $151.5 million above the President's request and $204 million more than it received in FY 2010.

By comparison, highway programs increased 3.132 billion over FY 2010, as did transit funding which increased by $574 million.

Additional information on the Subcommittee's FY 2011 THUD mark, including a bill summary (PDF), an earmark list (PDF), bill text (PDF) and a statement of managers (PDF) can be found on the Subcommittee’s website.

A date for full Committee markup has not yet been set, and no Senate THUD markup has yet been scheduled.

Financing Completed for the Largest U.S. Greenfield Transportation P3 Deal of All-time

Brian Papernik — Wed, 23 Jun 2010 09:48:22 -0800

On June 22, 2010 the Texas Department of Transportation’s I-635 project became the first U.S. highway public-private partnership (P3) to achieve financial close in 2010. LBJ Infrastructure Group - a Cintra-led consortium - will build, finance, maintain and operate a 17-mile corridor which includes managed lanes in the congested Dallas-Fort Worth area. This project along with the North Tarrant Express (NTE), one of three U.S. transportation P3s to close in 2009, are nationally significant for advancing the use of managed lanes to address congestion.

The projects are notable not only for their magnitude and the method in which they will be developed, but also for their unique tolling and financial characteristics. Specific precedent setting-features include:

The projects are valued as the largest transportation greenfield P3 projects in the United States and include construction costs of $2.7 billion for the I-635 and $2 billion for the NTE.
The projects confirm the importance of Transportation Infrastructure Finance and Innovation Act (TIFIA) and private activity bonds (PABs) as financing mechanisms. The I-635 includes the largest amount of PABs for a U.S. toll road concession. The TIFIA loans of $850 million for I-635 and $650 million for NTE are the second and third largest to close.
The Dallas Police and Fire Pension System is an equity partner in the private developer for both projects, making it the first pension fund to invest directly in infrastructure development in the U.S.
They are the first two projects to obtain federal tolling authorization under the United States Department of Transportation’s Express Lanes Demonstration Program.
To the extent that toll revenues exceed specified levels, the private developer will share up to 75% of the excess toll revenues with the Texas DOT.

The I-635 and NTE validate toll concession P3s as a viable method for delivering needed transportation projects in the United States. For example, with the I-635, Texas DOT was able to leverage $489 million in public funds to deliver a project worth over $4 billion including costs for design, construction, operations and maintenance. If past is prologue, the P3 market can expect more P3 toll concessions, as well as managed lanes projects, in the future.

Karen J. Hedlund named Chief Counsel of the Federal Railroad Administration

Barney A. Allison — Tue, 22 Jun 2010 13:09:20 -0800

U.S. Department of Transportation Secretary Ray LaHood has asked Federal Highway Administration Chief Counsel Karen J. Hedlund to serve as Chief Counsel of the Federal Railroad Administration, effective June 29.

Hedlund moves to FRA to help advance DOT's new high-speed and intercity rail development program, one of the Obama Administration's signature initiatives with more than $10 billion already appropriated. During her tenure at FHWA starting in 2009, Hedlund helped implement the American Recovery and Reinvestment Act, including new investments in highway, intermodal and freight rail facilities. Hedlund has 35 years of experience in transportation and is recognized nationally for her expertise in structuring public-private partnerships.

All of us at Nossaman congratulate our former partner Karen Hedlund on her new appointment.

Ways and Means Turns Focus to Infrastructure Bank Proposals

Adam Horsley — Mon, 07 Jun 2010 11:53:48 -0800

The powerful House Ways and Means Committee recently heard testimony from state and local officials on how to create and fund a new National Infrastructure Bank. Witnesses highlighted efforts around the country to find new ways to finance transportation projects, from the “Measure R” dedicated sales tax in Los Angeles to Kentucky’s new “Green Bank” (a revolving fund dedicated to promote energy efficiency, capitalized with ARRA funds).

Witnesses emphasized the need for new transportation funding, noting that the United States has fallen far behind certain competitors in our relative investments in infrastructure (China invests nine percent of GDP, while the U.S. invests less than two percent) but disagreed as to how a national infrastructure bank should be structured.

Governor Rendell noted that an infrastructure bank could help draw private funds into the mix of transportation funding options available by providing credit enhancement and loan guarantees – strategies that require minimal investment in terms of federal dollars. He asserted that the infrastructure bank could help finance critical investments in projects of national significance, as the TIGER grants have done with stimulus dollars.

It is noteworthy that the taxing committees have turned their focus to infrastructure finance. Several proposals pushed forward in this past year, including the Administration’s National Infrastructure Innovation Finance Fund, may demonstrate a political appetite for enacting new infrastructure financing programs in the near future. These efforts may provide a welcome boost in transportation investment. A new financing program could be structured to function with relatively low cost/capitalization when compared to multi-year grant programs like the transportation authorization bill, which has been repeatedly delayed due to funding concerns.

GDOT Shortlists Three Consortia for the West by Northwest Project

Ashley Remillard — Thu, 03 Jun 2010 09:03:10 -0800

On June 1, the Georgia Department of Transportation (GDOT) announced the shortlist of qualified proposers for the West by Northwest Project. The three shortlisted teams are eligible to receive the Request for Proposals for the project, which is expected to be issued in the fall. The selected teams are as follows:

The West by Northwest Development Partners

Equity: VINCI Concessions and OHL Concesiones.
Lead Contractors: Archer Western Contractors, OHL USA and the Hubbard Construction Company.
Lead Engineering Firm: Parsons Transportation Group.
Lead Operations and Maintenance Firm: VINCI Concessions and OHL Concesiones.

The Georgia Mobility Partners

Equity: Cintra Infraestructuras, MINA USA (subsidiary of Meridiam Infrastructure) and Grupo Soares da Costa.
Lead Contractors: Ferrovial Agroman and Prince Contracting.
Lead Engineering Firm: AECOM Technical Services.
Lead Operations and Maintenance Firm: Cintra Infraestructuras, MINA USA and Grupo Soares da Costa.

The Northwest Atlanta Development Group

Equity: ACS Infrastructure Development.
Lead Contractors: Dragados USA and C.W. Matthews Contracting Co.
Lead Engineering Firm: PBS&J.
Lead Operations and Maintenance Firm: ACS Infrastructure Development.

In addition to being GDOT’s first project under its new P3 program, the West by Northwest Project is viewed as a vehicle to reinvigorate the metro Atlanta and statewide economy. Further information is available on the GDOT website.

Las Vegas Bankruptcy Monorail Decision Bodes Well for Project Owners

Barney A. Allison — Tue, 01 Jun 2010 09:26:22 -0800

We are pleased to include here the comments of colleague, Allan Ickowitz, Co-Chair of Nossaman's Financial Services and Bankruptcy Practice Group.

Public agency project owners can breathe a sigh of relief over a recent bankruptcy court decision in the Las Vegas monorail case. They will not be held liable for the debts of non profit corporations established to build public infrastructure simply because the corporation was formed “on behalf” of a public agency.

When the Las Vegas Monorail Company filed a Chapter 11 bankruptcy petition on January 13, 2010, the Ambac Assurance Corp. filed a motion to dismiss. The Monorail bankruptcy filing and Ambac’s motion raised concerns in the US infrastructure industry about the potential liability for public agency sponsors of these types of projects for the liabilities of the non-profit corporation’s formed on their behalf to develop and finance infrastructure projects. Ambac had insured $450 million of the bonds issued to finance the Monorail project, and argued that the Monorail shouldn’t be able to file under Chapter 11 on the grounds that the Monorail was a "municipality" for purposes of the Bankruptcy Code and, therefore, ineligible to file a bankruptcy case under any Chapter other than Chapter 9. (A dismissal of the Monorail's Chapter 11 case would render the Monorail unable to seek bankruptcy protection because the company was not specifically authorized by Nevada law to file a Chapter 9 bankruptcy case, a requirement that applies municipalities filing bankruptcy under Chapter 9.) Ambac argued that the Monorail was an "instrumentality" of the State of Nevada, because, among other things, the Monorail was controlled by the Governor, identified itself as an "instrumentality" of the State of Nevada controlled by the Governor in the tax certification in connection with obtaining tax exempt status for its bonds, and because the bonds were issued by the state (and various exemptions granted to the monorail company by the Clark County government).

This public private partnership structure (sometimes referred to as a 63-20 Corporation) is designed to shift financial risk away from the public agency. The bond documents used in this financing are explicit that neither the full faith and credit or any assets of the public issuer, the state, or the county are liable for the debts of the corporation, even though for federal tax purposes the corporation was formed 'on behalf of' a public agency.

The Bankruptcy Court rejected Ambac's arguments and issued a ruling entered on April 26th denying Ambac's motion. The court in effect, and based upon the totality of circumstances in the case, found that the Monorail should be treated as a nonprofit corporation as was intended. It was organized to be a non-profit under Nevada state law and the certification of the entity as an "instrumentality" for tax purposes did not change its status under bankruptcy law. In ruling this way, the court has helped protect the integrity of the type of conduit financing. The Monorail's bonds, issued by a state to finance operation of a project by a private nonprofit corporation – albeit for public purposes under significant oversight and control by the state are the responsibility of the nonprofit, not the public agency.

Ambac has initiated appeal proceedings seeking to reverse the Bankruptcy Court’s decision.

-Allan Ickowitz

Presidio Parkway Reaches Two Important Milestones

Edmund Caplicki — Thu, 27 May 2010 09:00:42 -0800

California's first public-private partnership procurement has passed two major hurdles in the last week. First, after a long anticipated and much-debated hearing, the California Transportation Commission approved the San Francisco Presidio Parkway Project last week on an 8-3 vote.

Second, on May 25, the California Department of Transportation released the draft request for proposals to design, build, finance, operate and maintain the Presidio Parkway. The project, sponsored by Caltrans and the San Francisco County Transportation Authority, is being closely watched because it is the first P3 project under the new Section 143 of the California Streets & Highways Code, which permits Caltrans and regional transportation agencies to work with the private sector in developing transportation facilities in the state (for more about Section 143, see 'California Passes First Significant Transportation PPP Law in 20 Years').

The CTC vote was a topic of discussion at the California Public Infrastructure Advisory Committee meeting this week, which preceded the Public Infrastructure Financing Forum held at the California Science Center in Los Angeles.

Caltrans plans to issue the final RFP on June 29, 2010.

West by Northwest Project to Jump Start Georgia's Economic Recovery

Ashley Remillard — Wed, 26 May 2010 16:10:45 -0800

A recent independent report on the Georgia Department of Transportation’s West by Northwest Project indicates that the project will result in significant economic benefits to the Atlanta region and statewide. Prepared by the Fiscal Research Center at Georgia State University, the report focused on the short-term effects of the project and found:

The project will result in an estimated 9,705 private sector jobs in Georgia (including 9,169 jobs in the Atlanta metro region) that would not otherwise exist;
The project will generate over $528 million in additional income in the state of Georgia and an additional $507 million in the Atlanta metro area;
The project will increase the total economic output in the Atlanta metro area by more than 57%.

A full copy of the report is available from the Fiscal Research Center, which frequently writes about the economic implications of policies and public sector projects of significance to the state.

The West by Northwest Project is the first of several P3 projects in the pipeline for the state. GDOT issued a Request for Qualifications for the project earlier this month, and is expected to shortlist proposers next week.

A Rest Stop on the Road to the Future

Geoffrey Yarema — Wed, 28 Apr 2010 14:26:44 -0800

The National Journal Transportation Expert Blog this week asked whether states should be allowed to commercialize rest stops. I thought this was a timely question, and responded with the following:

The upcoming reauthorization will present an excellent opportunity for Congress to rethink its outdated blanket prohibition on the commercialization of state-owned safety rest stops.

This is no longer simply a question of who gets to sell fast food to weary travelers. The question is: how will we maintain our interstates to truly serve motorists’ changing needs at a time when increasing funding shortfalls and skyrocketing liability concerns are causing states to close existing rest areas in unprecedented numbers?

A more nuanced balancing of interests seems overdue.

As just one example of how these rest stops might be valuably utilized without impinging on off-right of way private sector services, the Pacific Coast states (California, Oregon, and Washington) are trying to ensure the availability of alternative fuels along the I-5 corridor from British Columbia to Baja California, one of USDOT-designated critical “corridors of the future”. A backbone like this would serve to jumpstart the development of a wider distribution network essential to spur a wider acceptance of alternative fuels vehicles in passenger and freight fleets and consequently substantially reduce emissions. Private fuel distribution networks will be less likely to make this investment in advance of a large customer base demanding the service.

There are other examples of how the use of rest areas within the interstate system should be allowed, while at the same time protecting the many excellent and important businesses off-right of way currently serving the traveling public. It is increasingly clear that a black and white policy, based upon 1950’s definitions of commercial activity, no longer reflects an optimal transportation policy combination of technology. In key areas policy appears to be unnecessarily protecting businesses at the expense of innovative and integrated ideas for the future of our transportation infrastructure.

USDOT Outlines $600M "TIGER II" Grant Program, $150M Available for TIFIA

Adam Horsley — Tue, 27 Apr 2010 14:24:12 -0800

USDOT has published interim guidance on its new “TIGER II” competitive grant program, a $600M successor to the popular $1.5B TIGER program included in the American Recovery and Reinvestment Act (ARRA). The guidance outlines application deadlines, eligibility and project selection criteria, and indicates a shift in the focus of the program from near-term job creation to long-term outcomes.

TIGER II is not constrained by ARRA’s focus on “shovel ready” projects and immediate job creation (funds must be awarded by 9/30/2012, but there is no deadline for expenditure or project completion). Instead, TIGER II seeks long-term outcomes, though these outcomes fall in the same general areas as TIGER I: safety, economic competitiveness, livability, sustainability, and state of good repair (the extent to which a project improves the condition of existing infrastructure and minimize life-cycle costs).

Click below for additional details about the focus and requirements of TIGER II.

Focus on Livability, Sustainability, and Innovation

In keeping with the DOT-HUD-EPA Partnership for Sustainable Communities, TIGER II’s evaluation criteria will emphasize lowering the average cost of transportation. Proposed improvements in economic competitiveness will also need to demonstrate environmental sustainability. The program will give special priority to multi-modal projects that incorporate new technologies or innovative approaches to finance, contracting, project delivery, congestion management, safety, asset management, or long-term operations and maintenance.

$150M for TIFIA, USDOT Flexibility in Awarding TIFIA Assistance

Up to $150M will be available for “TIGER II TIFIA Payments” which could support as much as $1.5B in federal credit assistance. The TIFIA assistance program generally follows the same model used under ARRA – applicants must submit a TIFIA letter of interest with their TIGER II application, and may apply for both grant funding and credit assistance concurrently. However, the new program would allow USDOT to award TIFIA assistance to applicants who did not ask for it – even if USDOT denies the project’s application for grant funding.

It will be interesting to see how much of the $150M TIGER II funds the USDOT actually doles out -- only $60M of an authorized $200M was allocated through TIGER I. USDOT’s new authority to award TIFIA assistance in lieu of, or in addition to, grant funding should pave the way for greater utilization of the TIFIA program under TIGER II. Awarding the full $150M in TIFIA assistance could more than double the impact of this program.

Additionally the TIGER II guidelines include several notable details:

· Grant Restrictions TIGER II grants must be for at least $10M and cannot exceed $200M. No state can receive more than 25% of the funds.

· Federal Share Capped at 80% For most projects, the federal share will be limited to 80%, requiring a 20% local match. This requirement was waived under the ARRA program.

· Rural Projects In a significant shift from the ARRA program, TIGER II is required to invest at least $140M in rural projects, which are exempt from the 20% local match and the minimum grant size described above. Grants for rural projects must be for at least $1M.

· Planning Grants and USDOT-HUD Coordination TIGER II can provide up to $35M in planning grants to activities related to the planning, preparation or design of Eligible Projects, including transportation corridors or regional transportation systems. USDOT intends to coordinate implementation of these planning grants with HUD’s $40M Community Planning Challenge Grant program. As with the TIFIA funding, USDOT can provide planning grants even if it decides not to fund the applicant’s grant request and regardless of whether the applicant requested planning grant assistance.

· Funding Availability ARRA gave priority to projects expected to be completed by February 17, 2012. TIGER II is not subject to any similar requirements, although TIGER II funds are only available for obligation through September 30, 2012.

· Application Deadline

· Pre-application forms will be available on June 15, 2010 at: www.dot.gov/recovery/ost/TIGERII Pre-applications are due by 5pm EST on July 16, 2010.

· Applications are due by 5pm EST on August 23, 2010 and must be submitted through www.grants.gov. Applicants must be registered with the site, a process that takes 2-4 weeks.

· USDOT will announce recipients on or after September 15, 2010.

Oberstar's Subcommittee Discusses P3s

Barney A. Allison — Tue, 27 Apr 2010 11:31:50 -0800

Jeffrey Parker, President of Jeffrey A. Parker and Associates, has worked closely with Nossaman on several projects, including two recent projects in Florida. We are pleased to include his comments here as a guest to Infra Insight.

The House Subcommittee on Highways and Transit invited me to participate in a hearing on April 14, 2010 on “Using Innovative Financing to Deliver Highway and Transit Projects.” As a participant on the panel, I was pleased to share my firm’s experiences with availability payments and answer questions from the Subcommittee Members on the I-595 and Port of Miami Tunnel transactions. My testimony is available online. It was gratifying to see the subcommittee’s interest and the potential for these examples to help shape future federal policy.

In addition to the P3 discussion, the Subcommittee demonstrated a strong interest in enlarging the current TIFIA loan program at USDOT, as well as in making railroad infrastructure loan financing (RRIF) more attractive.

USDOT Chief Financial Officer Chris Bertram explained a number of concepts the Administration is developing for reauthorization of federal transportation programs, including the new national infrastructure loan and grant program. Subcommittee members also sought feedback on the Federal Transit Administration’s “PentaP” Program and its impact on expediting the approval process for New Starts Projects. Video of the entire hearing and a written summary are both available online.

- Jeffrey Parker

The Future of Interstate Tolling

Geoffrey Yarema — Wed, 14 Apr 2010 13:51:15 -0800

The IBTTA is discussing the future of tolling existing interstate capacity in light of the Federal Highway Administration’s decision to reject Pennsylvania’s application to toll Interstate 80.

My opinion?

The political barriers to tolling existing interstate capacity are just as real and monumental as raising the gas tax. In the short to mid term the more likely scenario is an acceleration of the trend to toll new capacity within existing interstate rights of way. The Ft. Lauderdale I-595, the Ft. Worth North Tarrant Express, and the Dallas I-635 are all recent examples of blending existing nontolled interstate upgrades with new tolled lanes. I project many more such projects which will benefit all concerned with less political friction. In reauthorizing the highway program Congress should follow the recommendations of the National Surface Transportation Infrastructure Financing Commission and give the states more leeway to utilize this tool.

You can see what others have to say about it at the ITBBA’s blog Tolling Points.

CTC Authorizes First Regional Design-Build Projects

Brian Papernik — Fri, 09 Apr 2010 10:34:38 -0800

On April 7, 2010, the California Transportation Commission (CTC) authorized the first two regional design-build projects under the state's innovative contracting authority under Senate Bill 4, SBX2 4.

The ExpressLane Project is a joint state/local project of the Los Angeles County Metropolitan Transportation Authority (LA Metro) and the Department of Transportation (Caltrans), which will be implemented by Caltrans. The project will convert existing carpool lanes on Interstates 10 and 110 to high-occupancy toll (HOT) lanes, or ExpressLanes.
The Riverside County Transportation Commission (RCTC) SR-91 Corridor Improvement Project is a local transportation entity project slated for implementation by a regional entity. It will widen State Route 91 with the addition of new freeway lanes, toll/express lanes, expanded freeway-to-freeway connectors and better access to and from the freeway at congested locations.

Other regional transportation agencies will no doubt be encouraged by the CTC’s unanimous approval of these two projects.

SBX2 4, which authorizes alternative contracting for certain projects was approved on February 20, 2009. The CTC developed its related P3 policy guidance on October 14, 2009.

Alternative Financing - the New Mainstream?

Barney A. Allison — Tue, 30 Mar 2010 14:11:17 -0800

State and local strategies to bridge the gap between traditional funding and current needs – which has been referred to as alternative finance – are now becoming mainstream.

Consider Los Angeles Mayor Antonio Villaraigosa’s plan to speed up the development of LA’s transit infrastructure, which the LA Times reports would include financing from ‘a combination of private financing and bonds, such as Build America Bonds, established in the economic recovery bill to cut interest costs for local and state infrastructure projects.’

In fact, this model has already been used in several states for highway projects (see Texas and Florida for recent examples). Recent changes in TIFIA rules and the Obama administration’s so-called ‘livability’ criteria may indicate the federal credit program’s shift of emphasis toward funding transit programs. And enhanced versions of existing credit programs, such as the proposal to establish and capitalize a National Infrastructure Bank, could present a new vehicle to make these financing options available.

Public agencies responsible for developing high speed rail will also have to consider alternative financing methods. The ARRA grant funds allocated for these projects, although impressive, will only make up a portion of the monies necessary to provide a viable service. The choice comes down to this: wait years or even decades for the federal government to dole out enough funds on a pay-as-you-go basis to build the infrastructure we need, or creatively finance critical deals using low cost federal credit, bonds, and private equity so that we can reap the benefits of increased mobility sooner. After sitting in L.A. traffic this morning, I can certainly tell you which option I would prefer.

Infrastructure Journal Honors Texas, Florida, and Nossaman

Barney A. Allison — Wed, 17 Mar 2010 04:00:00 -0800

A week after the Project Finance Awards honored the Florida deals, the Infrastructure Journal Awards honored the Texas DOT’s North Tarrant Express project as its 2009 Global Transport Deal of the Year. The Florida DOT’s I-595 Project was nominated along with one other project for the honor.

The North Tarrant Express was nominated with two other projects for the IJ’s 2009 Global Deal of the Year – which selects from projects in all sectors, including: power, renewables, oil and gas, PPPs, and transport.

Nossaman was nominated along with two other law firms for the 2009 Transport Legal Advisor of the Year award for our work in the industry, including our work on the North Tarrant Express, the I-595, and the Port of Miami Tunnel.

Photo source: Infrastructure Journal
Angus Melville, IJ Editor, with Nossaman’s Geoff Yarema and Meridiam's Thierry Déau.

We heartily congratulate the Texas and Florida Departments of Transportation on their impressive accomplishments and appreciate the opportunity to have been associated with their successful projects.

Infrastructure Journal reported that the North Tarrant Express deal “marks the first time a US pension fund has come on board as a direct equity shareholder in a toll road concession, and the first time long-term investment grade transportation private activity bonds (PABs) have been issued, sold "unwrapped"." It is the only road development project in the country to have closed in 2009 in which the private sector assumed revenue risk. IJ notes the North Tarrant Express deal "has the potential to kick start a trend across the States of pension funds becoming more active in infrastructure investment.”

The London-based IJ called the I-595 a “pathfinder deal” and remarked that the “nomination of US law firm Nossaman is an indicator of where the market is heading, with three landmark deals in the States making it away in 2009 - Port of Miami Tunnel, North Tarrant Express (Transport Deal of the Year) and the I-595.”

Background and analysis about the NTE, the I-595, and the POMT are available on nossaman.com and Infra Insight blog.

Florida Department of Transportation Honored for Two Projects

Barney A. Allison — Mon, 08 Mar 2010 14:32:56 -0800

The Port of Miami Tunnel Improvement Project was named the 2009 Global Deal of the Year and the 2009 North American PPP Deal of the Year by Project Finance Magazine

The I-595 Corridor Roadway Improvements Project was named the 2009 North American Transport Deal of the Year

Project Finance Magazine, a leading global infrastructure industry trade publication, announced the honors at its awards ceremony in New York on March 4th and profiles both the Port of Miami Tunnel and I-595 projects in its current issue. Nossaman is honored to have had the opportunity to work on both of these projects with the Florida Department of Transportation and congratulates the department on its vision and success.

"We are excited to see this landmark project begin construction. We assembled an excellent team of FDOT employees and consultants to deliver this project. Nossaman, under Patrick Harder's leadership, was an integral team member whose creativity and excellent judgment helped deliver the project on time and within budget."
- Gerry O'Reilly, FDOT Director of Transportation Development

Background and analysis about the I-595 and the POMT, both precedent-setting availability payment PPP projects, are available on nossaman.com and Infra Insight blog.

Photo Source: Florida Department of Transportation

Another Hurdle for Infrastructure Projects? The White House Draft Guidelines on Greenhouse Gas Emissions

Sandra Kanter — Mon, 08 Mar 2010 10:14:48 -0800

The White House’s Council on Environmental Quality has issued two draft guidance memos regarding important NEPA compliance issues that may add another regulatory layer to infrastructure project development.

The draft guidelines on greenhouse gas (GHG) emissions, issued on February 18, 2010, require that environmental impact evaluations by federal agencies address GHG. Among other things, federal agencies are required to quantify and describe expected direct and indirect GHG emissions, to discuss measures to reduce GHG emissions, and to qualitatively discuss the link between the proposed action's GHG emissions and climate change. By adding to the list of matters an environmental impact statement or environmental assessment must address, the new guidelines not only are likely to increase the cost and time necessary to prepare NEPA documents, but also may provide additional avenues through which project opponents could challenge projects.

Draft guidelines on NEPA mitigation and monitoring requirements are intended to require federal agencies to adopt (1) binding commitments to implement mitigation measures, (2) monitoring programs to "ensure" the mitigation is implemented, and (3) reporting systems so that the public knows if and how the mitigation measures are implemented. The guidelines "are intended to reinforce existing requirements and responsibilities", but nevertheless could increase the impact of mitigation requirements on projects, in terms of both cost and time.

The draft guidelines are open for comment for a 90-day period.

Nossaman has issued an E-Alert providing a more detailed analysis of these new guidelines.

USDOT Announces $1.5 Billion in TIGER Grants - $60M in TIFIA Allocations

Adam Horsley — Thu, 18 Feb 2010 12:37:21 -0800

USDOT Announces $1.5 Billion in TIGER Grants – $60M in TIFIA Allocations

On February 17, the one year anniversary of the landmark American Recovery and Reinvestment Act, USDOT announced the final list of TIGER grant recipients. Grants range in size from $3.15M for a roadway rehabilitation/reconstruction in Burlington, VT to a $105M grant for construction of two new intermodal facilities in Memphis, TN and Birmingham, AL to support freight rail service from the Gulf Coast to the Mid-Atlantic.

When combined with state and private funds, the TIGER funds will support approximately $4 billion in transportation investment, according to AASHTO, which estimates that States have already started or completed 12,250 recovery projects worth $26.4 billion.

Shortly after releasing the final list of grantees, USDOT released a statement outlining key areas for investment, which included:

Freight Rail: 11 national freight projects to help get freight off America’s highways and onto rail.

Road and Bridge Repair: 13 highway infrastructure projects to make critical repairs to roads and bridges that are in dire condition.

Community Livability: 22 livability projects aimed at giving Americans more choices about how they travel and improving access to economic and housing opportunities in their communities.

These investments may be signaling a shift in federal policy, and build upon the HUD-EPA-DOT partnership to promote livability and sustainability which the Obama Administration announced last June. Each project was evaluated for its ability to help achieve the following goals:

A state of good repair for our existing transportation facilities;
Enhanced economic competitiveness;
Safer streets and communities;
Environmental sustainability; and
Enhanced community livability.

The Administration seems to be applying these principles to other discretionary programs as well, notably the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which received $60M in new funding under the TIGER grant program, nearly half of the $122M annual apportionment it had been receiving under SAFETEA-LU.

Five grantees will be eligible for the TIGER TIFIA Payment program, which allows grantees to pay the subsidy and administrative costs of the TIFIA credit assistance program using TIGER grant funds.

The TIFIA TIGER payments will be leveraged with state and other funds to support several larger projects. The largest of these grants – $20M allocated to the North Texas Toll Authority for improvements to a high-growth corridor near Dallas-Ft. Worth – could support a federal loan of approximately $300-$400M.

TIFIA Eligible Grantee	Project / Cost	TIGER Funding:
North Texas Tollway Authority (NTTA)	State Highway 161 $1.3 billion	$20M to support a direct TIFIA loan of approximately $400M.
North Carolina Department of Transportation (NCDOT)	I-85 Corridor Improvement and Yadkin River Crossing ~$374 -$461M	$10M with optional innovative financing enhancements to support a direct loan for up to one-third ($125 -$154M) of the project costs
South Carolina Department of Transportation (SCDOT)	I-95 Interchange & Access Project $360M	$10M with optional innovative financing enhancements to support a direct loan for up to one-third ($120M) of the project costs
Arkansas State Highway and Transportation Department (AHTD)	Bella Vista Bypass $358.1M	$10M with optional innovative financing enhancements to support a direct loan for up to one-third ($119M) of the project costs
Colorado Department of Transportation (CDOT)	U.S. 36 Managed Lanes/Bus Rapid Transit ~ $160 - $260M	$10M with optional innovative financing enhancements to support a direct loan for up to one-third ($53 -$87M) of the project costs

The TIGER TIFIA allocation fell short of the statutory cap, which would have allowed USDOT to apply up to $200M of the TIGER funds to federal credit assistance. In the past year, competition for TIFIA funds has intensified and USDOT has reinstated the competitive application process it abandoned in 2002.