History of Public Private Partnerships

in Washington State

Tacoma Narrows Bridge

1940 - “Galloping Gertie” original span collapses in wind storm.

1950 - Old span replaced by new bridge.

1993 - Population growth triggers call for an additional span.

Legislature enacts initial P3 law identifying five possible pilot projects. Second Tacoma span is chosen. (Bechtel-Kiewit)

Tacoma Narrows Bridge

2000

Final EIS filed, but lawsuit invalidates financing scheme.

P3 changed to D/B and legislature appropriates funding.

This prompts review of state P3 statute.

Mortgage Statement: Total Principal and Interest Over 24 Years Estimated at $1.572 billion

Tota

l Bor

row

ing

$711

m

Mortgage Statement: Total Principal and Interest Over 34 Years Estimated at $1.908 billion*

Tota

l Bor

row

ing

$794

m

*United Infrastructure Washington (UIW) Preliminary Financing Plan dated January 25, 2001.

It is estimated that toll-payers will save at least $336 million over 24 years. But there is a price associated with these savings: more risk.

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2007 2009 2011 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039

Original TNB “Private Public Partnership”: 63-20 financing

**Seattle Northwest Securities, assumptions as of May 10, 2005 (interest rates as of 5/10/2005 + 50 BP with CABs issues 7-9).

Traditional State Bond Financing**

“Cost Savings by reversing the financing of TNB

What’s happened since?

Design / Build Takes Off

Gas-tax increases of 14.5 cents in 2003-2005 provides massive project rollout.

Consultant design work increases from 15% to 54% of all projects by dollar value.

What’s happened since?

Transportation Innovative Partnership Act (TIP) - RCW 47.29

• TIFIA (low-cost loans)

• SAFTTE-LU (allows tolling on Interstate highways, etc.)

• Allows transportation-related projects and programs of all modes to be eligible for

development as a public-private partnership under the Transportation Innovative

Partnership Program (TIP);

• For transportation projects funded with toll revenues, any bonded indebtedness must

be state-issued debt;

• Requires citizen advisory committees for projects > $300 million.

• Requires comparison with the department's internal ability to complete the project

that documents the advantages of completing the project as a partnership versus

solely as a public venture.

P3 Laws Revised

P3 Proponents Not SatisfiedDue to political resistance, P3 proponents nibble around the edges at legislature:

• 2011 – SB 5771 (Failed)Separates non-toll projects from current law. (Ferry terminal, West Coast Green Highway)

• 2011 – P3 Study Appropriated $425,000 study of P3s and their effective implementation.

• 2012 - SB 6350 (Failed)Repeals TIP. Finds that the act has not met the needs and expectations of the public or private sectors for the development of transportation projects, and states a legislative intent to continue to search for ways to bring innovative methods of transportation project delivery and finance to Washington.

The private consultants were representatives of AECOM, Nossamon, and KPMG. (http://www.leg.wa.gov/JTC/Pages/PublicPrivatePartnershipsStudy.aspx)

For more information contact: Vince Oliveri, PTE 17vince@pte17.org