Market Analysis” - AIAI-Infra · AIAI Roundtable Jan. 29, 2014 Editor William G. Reinhardt...

AIAI RoundtableJan. 29, 2014Editor William G. ReinhardtWestfield NJ(908) [email protected]

U.S. P3 Market Attracts World-Class PlayersSource: Public Works Financing newsletter (10/13)

Investor DevelopersMeridiamMacquarie GroupTransurbanStar AmericaInfraredPlenary GroupGoldman, SachsMorgan StanleyKKRFengate

Builder DevelopersACS Group/DragadosHochtiefFerrovial/CintraSkanskaKiewitWalshFluorLaneVINCIBalfour BeattyBechtelGraniteOHLSNC LavalinBouyguesZachryAccionaTraylor Bros.Global ViaOdebrechtSamsungIsoluxFIGG

Public AdvisorsLegal/procurement:NossamanAllen & OveryHawkins DelafieldMayer BrownFreshfieldsNixon Peabody

Financial/procurement:KPMGErnst & YoungRBC Capital MarketsMacquarie Capital AdvisorsMorgan StanleyGoldman SachsCitiPublic Financial ManagementInfrastructure Management GroupScully CapitalFirst SouthwestPriceWaterhouseCoopersUBSWilliam Blair & Co.

Design-BuildersFerrovialDragadosHochtiefFlatironFluorGraniteKiewitWalsh/Archer WesternBalfour BeattySkanskaWebberTutor PeriniLane ConstructionTraylor Bros.BechtelZachrySundtClark ConstructionHerzogOdebrecht

Design PartnersParsons TransportationJacobsURSAECOMHNTBHDRParsons BrinckerhoffLochner MMMCDM SmithPBS&JO.R. ColanMoffatt NicholRaba KistnerCH2M HillDewberryLanagan

Public AdvisorsTechnical:HNTBHDRAECOMParsons BrinckerhoffJacobsRaba KistnerArupLochner MMM GroupCDM SmithStantecHalcrow/CH2M HillSAICBlack & VeatchSteer Davies GleaveAtkins

Private Advisorsto developers:MacquarieBarclays CapitalBMO Capital Marketsto banks:Hatch Mott McDonaldArupParsons BrinckerhoffLouis BergerMilbank TweedLatham & WatkinsSkadden ArpsOrrickWinston & StrawnCleary GottliebHogan Lovells

Banks/UnderwritersDeal: DBFOM Goethals Bridge,NY-NJ. 11 /13 close ($457m 38yrPABs avail. pay) BoA Merrill Lynch,Barclays

Deal: DBFOM No. Tarrant Ex-press 2, Texas, 9/13 close.($273m PABs revenue risk) Bar-clays, JP Morgan, BoA Merrill Lynch

Deal: DBFOM I-95 HOT lanes,Virginia, 8/13 close. ($261m30yr PABs revenue risk)

Deal: DBFOM East End Crossing,Indiana-Kentucky. 3 /13 close($677m 38yr PABs avail. pay) BoAMerrill Lynch

Deal: DBFOM I-95 managedlanes, Virginia, 8/12 close, ($261m30yr PABs, toll revenuerisk+shadow toll) RBC

Deal: DBFOM untolled PresidioParkway, San Francisco, CA 6/12($170m 3yr bank loans, TIFIAtakeout, appropriations risk) fivebanks

Deal: DBFOM Midtown Tunnel,Norfolk, Va. 4/12 ($663m 30-yearPABs, toll revenue risk) Barclays,BMO, BoA

Deal: Long Beach, Calif., court-house 7/10 ($443m, 7-yr bankloan, state appropriation risk) BBVA,RBC, BNP Paribas, Credit Agricole,Deutsche Bank, Scotiabank

Top-ranked firms pursuing DB F/O/M opportuni�esin the US. heavy civil public works infrastructure market

“P3MarketAnalysis”January 2014byPublicWorksFinancingnewsletterforAIAIRoundtable

“DeliveringCivilInfrastructureSystems”

Jan. 24, 2014New York City

2 PWFinancing /Jan. 29, 2014

STAR AMERICA

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Serving the Industry Since 1908

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Global Transportation Deal Flow (2008-2013)

DBF/O/M Concessions (revenue-risk and availability)Source: Public Work Financing newsletter

YYeeaarr ooff U.S. Canada Europe Latin America TOTALffiinnaanncciiaall (# projects– (# projects– (# projects– (# projects– (# projects–cclloossee nominal US$ bn) nominal US$ bn) nominal US$ bn) nominal US$ bn) nominalUS$ bn)

2013 (10 mos.) 5–$5.2 3–$4.0 7–$9.8 6–$8.8 21–$27.82012 4–$5.0 3–$2.9 11-$10 7–$4.5 25–$22.42011 0 0 9–$20 11–$6.4 20–$26.42010 3–$4.8 7–$5.9 12–$13.8 6–$2.5 28–$272009 3–$5.1 0 11–$14.6 11–$6.6 25–$26.32008 1–$1.3 2–$1.7 22–$19 15–$9.6 40–$31.6TOTAL 15 – $21.4bn 15 – $14.5bn 72 – $87.2bn 56 – $38.4bn 159 – $161.5bn

Indiana DOT/IFA–$1.2bnOhio River Bridges Project,

East End CrossingFinancial close 3/13

Availability pay– 35yr +constructionDBFOM, new construction of I-265East End Bridge, one component ofthe bistate Ohio River Bridges Proj-ect to improve mobility in metroLouisville-southern Indiana. Capital–equity: $78m. debt: $677mPABs by BOA Merrill Lynch. IFA topay $392 in milestone payments.Developer– Walsh/Vinci/ Bilfinger

Indiana DOT–$200m ClineAve. Bridge, East Chicago.

Financial close 6/13.Toll revenue risk–BOO toll bridgeDeveloper–FIGG/Lane/AmericanInfrastructure MLP Funds)

Texas DOT–$1.4bnNo. Tarrant Express, I-35W

Financial close 9/13Toll revenue risk–43yr DBFOM10.5 miles of 2x2 managed lanes toI-35WCapital–equity: $446; debt: $273mPABS (Barclays, JP Morgan, Bankof America, Estrada Honosa);$531m TIFIA loan; $89.5m NorthCentral Texas COGDeveloper– Cintra/Meridiam

Virginia DOT–$940m I-95HOV/HOT Lanes Financial close 8/13

Toll revenue risk–73yr DBFOM I-95HOV/HOT/Bus Lanes in NorthernVirginia from I-95 beltway 29misouth on I-95 to Massaponax.Capital–equity: $386m. debt:$261m PABs: $82.6m GARVEEbond proceeds: $71m-additional federal highway funding$100m

The Port Authority of NewYork and New Jersey–$1.5bnGoethals Bridge Replacement

financial close 11/13Availability pay–40yr DBFM 1,700-ft cable-stay bridge NY-NJCapital–$113m equity, debt: $474mTIFIA, $457m PABs Bank of Amer-ica / Merrill Lynch & BarclaysDeveloper–Macquarie/Kiewit

U.S. DEALS CLOSED IN 2013

California, ARTI P3 bundleCalifornia, I-710 Freight CorridorCalifornia, I-710 Gap Closure No.Colorado, U.S. 36 HOT lanesFlorida, I-4 Ultimate Illinois, Chicago, Red Line Illinois-Indiana, Illiana ExpresswayIndiana, I-69, Section 5Maryland, Purple Line LRTMichigan, DRIC BridgeNevada, I-15 Project Neon

U.S./CANADA PIPELINE

New York, LaGuardia Terminal North Carolina, I-77 HOT LanesOhio/Kentucky, Brent Spence Br.Ohio, Portsmouth BypassPennsylvania, Bridges Texas 183 managed lanesTexas, SH 288, HoustonTexas, SH 99 Grand Parkway

Virginia, I-66 Virginia, Cheasapeake Bay Bridgeand Tunnel second tubeVirginia, Virginia Beach light-railWest Virginia US 35CanadaMontreal, Champlain BridgeToronto, Eglinton LRTToronto, Highway 407 east ext.Toronto, GO Transit MaintenanceOntario, Waterloo LRT

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U.S. / Canada Transportation P3 Projects ScorecardSource: Public Works Financing newsletter (12/13)

Project Costin nominal Private Notice to($ millions) Project Name Owner Risk Proceed Sponsors ($DB component)

3,850 Indiana Toll Road, IN Indiana Finance Authority 75-yr lease (toll) 6/06 Cintra Concessions/Macquarie

3,600 ETR 407, Toronto, ON Ontario Ministry of Trans. 99-yr lease (toll) 5/99 Cintra Concessions/SNC Lavalin/CDPQ

2,800 I-635 LBJ Managed Lanes, TX Texas DOT DBFOM (toll) 6/10 Cintra/Meridiam ($2.1bn Ferrovial Agroman)

2,100 Midtown Tunnel, Norfolk, VA Virginia DOT DBFOM (toll) 4/12 Skanska/Macquarie ($1.47bn Skanska/

Kiewit/Weeks)

2,100 Denver Eagle P3 Rail, CO Denver RTD DBFOM (ap) 8/10 Fluor/Laing/Uberior ($1.27bn Fluor/BBRI)

2,100 Confederation Line LRT, ON City of Ottawa DBFM (ap) 2/13 ACS Infra./SNC Lavalin/ Ellis Don

($1.8bn Dragados/SNC/EllisDon/Veolia)

2,047 No. Tarrant Express, 1-2W, TX Texas DOT DBFOM (toll) 12/09 Cintra/Meridiam/Dallas Police and Fire Pension

Fund ($1.7bn Ferrovia

2,000 Canada Line, Vancouver, BC Vancouver Trans. Auth. DBFOM (ap) 8/05 SNC Lavalin/Serco ($1.2bn SNC Lavalin)

1,998 I-495 HOT Lanes, VA Virginia DOT DBFOM (toll) 7/08 Transurban/Fluor ($1.4bn Fluor/Lane)

1,830 Chicago Skyway, IL City of Chicago 99-yr lease 1/05 Cintra Concessions/Macquarie

1,814 I-595 Managed Lanes, FL Florida DOT DBFOM (ap) 2/09 ACS Infra. ($1.2bn Dragados/EarthTech)

1,800 NE Anthony Henday Drive, AB Alberta Transportation DBFOM (ap) 5/12 Hochtief/ACS/Meridiam

($1.3bn Flatiron/Dragados/LaFarge)

1,674 Hudson-Bergen Lt. Rail, NJ NJ Transit DB/Equip+O&M 10/96 Wash. Group/Itochu ($1.15bn Perini/Slattery)

1,500 Goethals Bridge, NY/NJ Port Auth NY/NJ DBFM (ap) 11/13 Macquarie/Kiewit ($934m Kiewit/Weeks/

Massman + Parsons)

1,430 A30, Montreal, Que. Ministry of Transport DBFOM (ap/toll) 9/08 Acciona/Iridium (1.4bn Dragados/SICE/Arup)

1,400 Evergreen Light Rail, BC TransLink BC DBF (ap) 2/13 SNC Lavalin+Jacobs/MMM

1,400 No. Tarrant Express, 3A, TX Texas DOT DBFOM 9/13 Cintra/Meridiam/APG Infrastructure/

Dallas Police ($1.1bn Ferrovial)

1,358 SH 130 Segments 5-6, TX Texas DOT DBFOM (toll) 3/08 Cintra/Zachry ($968m Ferrovial/Zachry)

1,350 Windsor-Essex Parkway, ON Infrastructure Ontario DBFOM (ap) 12/10 ACS/Acciona/Fluor (Dragados/Acciona/Fluor)

1,340 Anthony Henday Drive NW, AB Alberta Transportation DBFOM (ap) 7/08 Bilfinger Berger ($1.3bn Flatiron/Graham)

1,180 East End Crossing, IN INDOT/Indiana Finance Authority DBFOM (ap) 3/13 Walsh/Bilfg/Vinci ($763m Walsh/Vinci+Jacobs)

1,080 PR-22, PR Puerto Rico Hwy & Trans Auth. 40-yr lease (toll) 9/11 Abertis/GS Global Infrastructure Partners II

1,007 Grand Parkway F1-2, TX Texas DOT DBOM 3/13 Zachry/Odebrecht

1,000 ETR 407 East extension, ON Infrastructure Ontario DBFM (ap) 5/12 Cintra/SNC Lavalin (Ferrovial/SNC Lavalin)

998 RiverLINE Light Rail, NJ NJ Transit DB/Equip+O&M 6/99 Bechtel/Conti/Foster/Bombardier

980 Jamaica-JFK Airtrain, NY Port Auth. NY/NJ DB/Equip+O&M 9/99 Skanska/Bombardier ($980m Slattery/Perini)

940 I-95 Express HOT Lanes, VA Virginia DOT DBFOM (toll) 8/12 Transurban/Fluor ($618m Fluor/Lane)

914 Port of Miami Tunnel, FL Florida DOT DBFOM (ap) 10/09 Meridiam ($607m Bouygues/Jacobs)

890 Skytrain, Vancouver, BC Translink DBF 2/13 SNC-Lavalin/Graham Building/Int’l Bridge

845 I-35E managed lanes, TX Texas DOT DBM (toll) 12/12 Archer Western (Walsh)/Granite/LANE

814 Golden Ears Bridge, BC TransLink/Partnerships BC DBFOM (ap) 3/06 Bilfinger BOT ($746m Bilfinger/CH2M Hill)

773 SR 125 So. + Connectors, CA San Diego Expressway L.P. DBFOM (toll) 5/03 Macquarie ($653m Washington/Fluor

765 Southeast Stoney Trail, AB Alberta Transportation DBFOM (ap) 5/10 SNC Lavalin/Acciona (same DB)

730 Confederation Bridge, PEI Public Works Canada DBOM 10/93 Vinci/BPC Marine/Ballast Nedam/SCI

705 So. Fraser Perimeter Road, BC BC Ministry of Transportation DBFOM (ap) 7/10 ACS/Ledcor ($650m Dragados/Ledcor)

689 JFK Terminal 4, NY Port Auth. NY/NJ DBFOM 5/97 Schiphol/LCOR ($689m Fluor/Morse Diesel)

611 Pocahontas Parkway Lease, VA Virginia DOT 99-yr lease (toll) 6/06 Transurban ($45m Fluor/MK)

603 Northwest Parkway Lease, CO Northwest Parkway Authority 99-yr lease (toll) 5/07 BRISA/CCR

599 Northwest Corridor, GA Georgia DOT DBF 11/13 Arch Western/Hubbard + Parsons ($599m DB)

597 Sea-to-Sky Highway, BC BC Ministry of Transportation DBFOM (ap) 9/05 Macquarie ($354m Kiewit/Miller/Capilano)

559 Palmetto Expwy, sec. 5, FL Florida DOT DBF 9/09 Community Asphalt/Condotte/De Moya

555 Northeast Stoney Trail, AB Alberta Transportation DBFOM (ap) 2/07 Bilfinger ($345m Flatiron/Graham/Parsons)

540 Route 1, NB Province of New Brunswick DBFOM (ap) 4/10 Dexter Group ($540 Dexter Construction)

538 A25 Montreal, Que. Quebec Ministry of Transport DBFOM (ap) 9/07 Macquarie ($207m Kiewit/Parsons)

(ap) availability payments� public credit (toll) toll collections�project revenue creditBoldface indicates developer-financed P3 project


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U.S. / Canada Transportation P3 Projects ScorecardSource: Public Works Financing newsletter (12/13)

ProjectCostin nominal $ Private Notice to($ millions) Project Name Owner Risk Proceed Sponsor ($DB component)

508 Trenton River Light Rail, NJ NJ Transit DB/Equip+O&M 6/99 Bechtel/Conti/Foster/Bombardier

500 Trans Canada Highway, NB NB Trans Ministry DBOM 11/98 Dragados-FCC/Vinci/Miller Paving

469 I-75, Collier + Lee Counties, FL Florida DOT DBF 5/07 Anderson Columbia Co., and Ajax Paving

446 I-4 Connector, Hillsboro, FL Florida DOT DBF 1/10 PCL Civil/Archer Western ($400m DB)

431 IROX I-75, FL Florida DOT DBF (toll) 6/07 Anderson Columbia/Ajax Paving

395 Anthony Henday Drive SE, AB Alberta Ministry of Trans. DBFO (ap) 1/05 Macquarie/PCL ($365m PCL/LaFarge)

385 Route 3 North, MA Mass. Highways DBF/Maint 8/00 Modern Continental/Roy Jorgenson

365 Presidio Parkway, CA CalTrans DBFOM (ap) 10/12 ACS/Meridiam ($245m Flatiron/Kiewit)

350 Dulles Greenway Toll Road, VA TRIP II DBFOM (toll) 9/93 TRIP II ($150m Brown & Root)

343 Las Vegas Monorail, NV L.V. Monorail LLC DB/Equip+O&M 10/00 Bombardier/Granite

300 Ontario Service Centres, ON Ontario Min. of Transportation DBFOM (ap) 8/09 HMS Host/Kilmer Van Nostrand (Ellis Don)

295 US 550 (was SR 44), NM New Mexico SH&TD D/CM/Warranty 9/98 Koch Materials ($295m CH2M Hill/Flatiron)

236 Rt. 288, VA Virginia DOT DB/Warranty 12/00 Koch/APAC/CH2M Hill

211 I-95 Widening, FL Florida DOT DBF 12/07 Community Ashpalt

200 Kicking Horse Canyon, BC BC Min. of Trans. DBFO (ap) 2005 Bilfinger ($114m Flatiron/Parsons)

195 Disraeli Freeway Bridge, MB City of Winnipeg DBFM (ap) 3/10 Plenary Group ($195m PCL Constructors)

191 Southern Connector, SC Connector 2000 Assn. DBFOM 2/98 Interwest ($191 Thrift Bros.)

190 Palmetto Expressway, sec. 2, SR 826/SR 874 Florida DOT DBF 9/08 Condotte/De Moya

177 Palmetto Exp. Widening, FL Florida DOT DBF 8/08 Condotte-De Moya

175 York BRT, ON Regional Muni. of York DBFOM (ap) 9/02 Kiewit/Delcan

144 Okanagan Bridge, BC BC Dept. of Transport DBFOM (ap) 6/05 SNC Lavalin ($145m SNC)

140 I-485, Charlotte Loop, NC North Carolina DOT DBF 6/10 Blythe Construction/Wilbur Smith

140 So. Norfolk Jordan Bridge, VA Cheseapeake, Va. BOO 1/11 Figg/American Infra. ($75m Lane/Figg)

130 CPTC 91 Express Lanes, CA Caltrans DBFOM (toll) 7/93 Level 3/Cofiroute/Granite ($90m Granite)

121 95 Express Lanes, FL Florida DOT DBF 1/08 FCC/MCM

111 US-1 Improvements, FL Florida DOT DBF 11/07 Community Asphalt

85 Camino Colombia Bypass, TX Texas DOT DBFOM (toll) 6/99 Camino Colombia Inc. ($85m Granite)

83 Hwy 104 Cobequid Pass, NS Nova Scotia MOT DBOM 5/96 CHIC: Aecom/AMEC/Dufferin

82 Hathaway Bridge, FL Florida DOT DB/Warranty 6/00 Granite

(ap) availability payments� public credit (toll) toll collections�project revenue credit

Boldface indicates developer-financed P3 project

IRIDIUM CONCESIONESDE INFRAESTRUCTURAS, S.A.(Formerly Dragados Concesiones de Infraestructuras, S.A)

.

WORLDTRANSPORT

LEADER

1994-20052007-2011

56 HIGHWAYS & ROADS 3,861 miles16 AIRPORTS18 PORTS & TERMINALS5 RAILROADS & SUBWAYS 987 miles

26 BUILDINGS & FACILITIES3 PUBLIC TRANSPORT HUBS

21 COUNTRIES


Virginia I-66, HOT lane conversion

• 12/13—19 RFIs; RFQ to be issued 3/14 and RFP by 2/15.

• Virginia DOT

• Contract form to be determined

California SR 156 West

• 12/13 Industry sounding on possible toll road to serve week-end visitors

• Caltrans

• Contract form to be determined

• est. $264 million

Pennsylvania Bridges

• 1/31/14 SOQs due

• PennDOT

• DBFOM with availability payments

• Replace at least 500 bridges in five year

Indiana-Illinois Illiana Expressway

• 12/13 qualifications submitted by five teams for Illinois por-tion of 47-mile toll road. Indiana quals due January 2014.

• Indiana/Illinois DOTs.

• 35yr DBFOM with availability payments.

• est. $1,000m

Maryland Purple Line LRT, Baltimore

• 11/13 RFQ; six responses received 12/13; shortlist to beannounced in January.

• Maryland DOT/Maryland Transit Administration

• 35-40yr DBFOM with availability payments

• $2,200m

Ontario Highway 407 East Extension

• 3/13 RFQ

• Ontario Ministry of Transportation/Infrastructure Ontario

• 30yr DBFM with availability payments

• $1,000m

Texas SH 99 Grand Parkway

• 9/13 quals submitted; shortlist and RFP to be released inspring 2014; contract execution 6/15

• Texas DOT

• CDA concession

• $1,020m

Toronto Eglinton LRT

• 12/13 shortlisted 2: (1) ACS Infrastructure Canada/ SNC-Lavalin/ Ellis Don/ AECON; (2) Bechtel/ Fengate Capital/OHL

• Metrolinx/Infrastructure Ontario

• DBFM with availability payments

• Cnd $4bn

Nevada Project Neon, Las Vegas

• 10/13 shortlisted 3: (1) Kiewit/Meridiam (2) Las VegasPaving Corp./Macquarie (3) ACS Infrastructure/ FengateCapital/ Star America

• Nevada DOT

• 35yr DBFOM with availability payments

• $1,500m

Los Angeles ARTI Bundle

• 9/13 shortlisted 4; (1) Cofiroute (Vinci)/Flatiron/Hochtief/InfraRed Capital/ Parsons/Skanska (2) Granite/ Macquarie(3) Aecom/ Clark/ Edgemoor/ Meridiam/ Transfield/ Walsh(4) Balfour Beatty/ CC Myers/ Fluor/ Parsons Brinckerhoff

• Los Angeles County Metropolitan Transportation Authority(Metro)/ CalTrans

• RFP to be released 3/14, probably later


• $750m

Projects at the RFI/Prequal stage

Projects at the RFQ stage

Projects with Teams Shortlisted

CIVIL INFRASTRUCTURE P3 PROJECTS IN PROCUREMENT


Ohio Portsmouth Bypass, SR 823

• 9/13 shortlisted 3; proposals due 6/14. Shortlist: (1) Cintra(2) Plenary/Walsh/Parsons Enterprises (3) ACSInfrastructure Development/ Infrared Capital Partners/ StarAmerica Fund

• Ohio DOT


• $820m

Texas SH 288 Toll Lanes

• 9/13 shortlisted 3; proposals due 5/14. Shortlist: (1) OHLConcesiones/ Macquarie Capital Group (2) ACS Serviciosy Concesiones/ InfraRed Capital Partners (3) Cintra

• Texas DOT/ Central Texas RMA

• DBFOM with revenue risk.

• $600m

Texas SH 183 Managed Lanes

• 8/13 shortlisted 4; proposals due 5/14(1) Plenary Group (Canada)/ Kiewit Development (2)

Macquarie Capital Group/ OHL Concesiones (3) FluorEnterprises/ Balfour Beatty Investments (4) MeridiamInfrastructure/Dallas Police and Fire Pension System/CintraInfraestructuras/Ferrovial

• DBF with $250m gap financing


• $876m

Indiana, I-69, section 5 upgrade

• 7/13 shortlisted 4; proposals due 1/14. Shortlist: (1)Macquarie/ Lane (2) PSP Investments (Canada)/ IsoluxC o r s a n(3) Plenary (4) Walsh/ Meridiam

• Indiana DOT.


• $390m

LaGuardia Airport Central Terminal Building

• 7/13 shortlisted 4; (1) Aéroports de ParisManagement/ADPI/TAV (2) Meridiam/ Vantage/Skanska(3) Highstar Capital / Aeroporto de Cancun (4)Macquarie/Lend Lease

• Port Authority of New York and New Jersey

• DBFOM with availability payments

• $3,600m

Florida I-4 Ultimate Improvements,

• 6/13 shortlisted 4; preferred bidder to be chosen 3/14.Shortlist: (1) Skanska/ John Laing (2) Macquarie/ OHL/F C C(3) Vinci/ Meridiam/ Walsh (4) Infrared/ Fluor/ Kiewit

• Florida DOT


• $2,100m

Ontario Waterloo LRT

• 3/13 shortlisted 3; (1) Plenary/Meridiam/Aecon/Kiewit/Keolis/CIBC (2) Gracorp Capital, Fluor and Investec(3) SNC-Lavalin/EllisDon Capital/Fengate Capital/URS

• Government of Waterloo Region

• 10 (+10+10) yr DBFOM

• $820m

Ontario GO Transit East Rail Maintenance Facility

• 2/13 shortlisted 3; (1) SNC-Lavalin/ACS (2) Aecon/BalfourBeatty/Investec (3) Plenary/Kiewit/TD Securities

• Metrolinx (government of ON)/ Infrastructure Ontario

• 30yr DBFM with availability payments

• $600m

North Carolina I-77 HOT Lanes

• 3/12 shortlisted 4; proposals due 3/14. Shortlist: (1) ACSInfrastructure Development/ InfraRed Capital Partners (2)Cintra (3) OHL Concesiones (4) Vinci Concessions

• North Carolina DOT

• 50yr DBFOM with revenue risk

• $600m

Colorado US 36 Express Lanes

• 4/13 preferred bidder selected: Plenary/Ames/ Granite

• Colorado HPTE

• 50yr DBFOM with revenue risk

• $115m �


We are at a critical point in this country as we attempt to“Americanize” the Public Private Partnership (P3) model for pub-lic infrastructure construction. To date, 35+ states have passedP3 enabling legislation—yet there is still considerable confusionabout the role of surety bonds on P3 projects and varying sure-ty bonding requirements in the existing enabling legislation.

Part of the problem is the fact that the P3 model was devel-oped in Europe which in general does notutilize surety bonds to support public infra-structure construction. The non-US P3model uses letters of credit or parentalguaranties to secure performance obliga-tions and does not include any form of pay-ment guaranties. As we know, the USrequires surety performance and paymentbonds to support public construction con-tracts (Miller Act & state Little Miller Acts)for several reasons. First, a surety perfor-mance bond is a contract completion guarantee and thereby pro-tects public funds. Second, the bonding process also providesthe public owner with a prequalification benefit that the publicowner likely would not otherwise be able to perform. Finally, asurety payment bond provides payment protection for subcon-tractors and suppliers who in general are not able to assert lienson public projects. A surety payment bond helps to level theplaying field for these critical project participants.

So how do surety bonds stack up against more traditionalEuropean P3 guaranties such as letters of credit? As notedabove, a surety performance bond is a contract completion guar-anty (typically 100% of the contract value) whereas a letter ofcredit is not (typically 7 – 10% of the contract value). A letter ofcredit may provide an owner with funds to make a few months ofprincipal & interest payments while trying to sort out the situa-tion—but it won’t get the project built. It is also important tonote that letters of credit do not provide any payment support forsubcontractors and suppliers who are often the only “local” par-ticipants on these projects.

That said, the P3 model does depend upon the project’s abil-ity to structure financing (investment grade rating contingent)and rating agencies currently provide a higher value to letters ofcredit than surety bonds as surety bonds are not as liquid as let-ters of credit. A multi-line insurance company is not permitted toprovide unconditional liquidity guaranties and in the constructioncontext, its guaranties must be tied to the performance of con-tractual obligations.

It’s up to the surety industry to educate or re-educate thestakeholders in US P3s (public bodies, concessionaires, contrac-tors, financing entities, rating agencies) as to the value that sure-ty bonds add to infrastructure construction projects. Hopefullythrough this process, we can assure that surety bonds arerequired as part of any P3 enabling legislation. Further, the sure-ty industry may need to modify the nature of the performancebond to include a remedy, still tied to the performance of con-

tractual obligations, which is more liquidthan the traditional remedies. Some form ofan advanced liquidated damages compo-nent or possibly some type of demand bondmay be potential ways to address the liquid-ity concerns of the rating agencies yet stillcomply with financial guaranty insurancerestrictions. While surety bonds with liquid-ity aspects have been discussed in the US &Canada, at this point no such bond has beenissued to date.

Overall, we need to Americanize the P3 model and certainlysurety bonds should be an integral component of that model. �

AMERICANIZE THE P3 MODELby Stephen Rae, General Counsel

Liberty Mutual Surety


U.S./Canada Design-Build Transportation Projects ScorecardSource: Public Works Financing newsletter (12/13)

Project Costin nominal

($m) Project Name Owner Risk NTP Constructors

6,400 SF-Oakland Bay Bridge, east Caltrans DB 04/06 American Bridge/Fluor

3,141 Tappan Zee Bridge, NY NYS Thruway Authority DB 4/13 Fluor/Granite/American Bridge/Traylor

2,800 Dulles Metrorail ph.1, VA MWAA/WMATA DB 3/09 Bechtel/URS

2,460 Port Mann Bridge, BC BC Ministry of Transportation DB 2/09 Kiewit/Flatiron

1,624 Intercounty Connector, MD MD Hwy Admin./ Trans. Auth. DB 6/07 I. Granite/Corman/GA & FC Wagman

II. Kiewit So./Corman/Wagman

III. Shirley Contr./Clark/Atkinson

1,400 Route 460 toll, VA Virginia DOT DB 12/12 Ferrovial

1,386 I-15 Reconstruction, UT Utah DOT DB 3/97 Kiewit/Granite/Washington Group

1,369 SH 130 Seg. 1-4, TX Texas DOT DB 7/02 Fluor/Balfour Beatty/DMJM + Harris

1,350 Alaskan Way Viaduct, WA Washington State DOT DB 1/11 Dragados USA/Tutor Perini

1,272 Crenshaw/LAX Transit, CA LA County Metro Trans Auth DB 9/13 Walsh/Shea Corridor Constructors

1,259 SR 520 Bridge/ HOV, WA Washington State DOT DB 4/12 I. Kiewit/General/Manson

II. Granite/PCL /Lochner

1,186 I-25 T-REX Road/Rail Exp., CO Colorado DOT/RTD DB 5/01 Kiewit/Parsons Trans. Group

1,177 Dulles Metrorail Phase 2, VA MWAA/WMATA DB 8/13 Clark/Kiewit

1,100 I-15 CORE, UT Utah DOT DB 9/09 Fluor/Ames/Wadsworth + HDR

1,089 SR-99 tunnel, WA Washington State DOT DB 12/10 ACS/Tutor Perini

1,002 DFW Connector, TX Texas DOT DB 10/09 Kiewit/Zachry

985 HSR, Madera-Fresno railbed, CA CA HSR Auth DB 7/13 Tutor Perini/Zachry/Parsons

860 Ohio R. Bridges, Downtown, KY Kentucky Trans. Cabinet DB 12/12 Walsh + Jacobs/Buckland Taylor

803 Foothill Eastern Toll Road, CA Trans. Corridor Agencies DB 6/95 Flatiron/Wayss & Freitag/Sukut/Obayashi

790 San Joaquin Hills Toll Rd., CA Trans. Corridor Agencies DB 9/91 Kiewit/Granite

715 I30/35 Horseshoe, Dallas, TX Texas DOT DB 11/12 Fluor/Balfour Beatty + Parsons Brinckerhoff

712 Alameda Corridor, CA Alameda Corridor Trans. Auth. DB 11/98 Tutor-Saliba/O&G Indus/Pars. Grp + HNTB

710 BART SF. Airport Ext., CA Bay Area Rapid Transit Dist. DB 5/98 Tutor-Saliba/Slattery + HNTB

685 Safe and Sound Bridges, MO Missouri DOT DB 4/09 Kiewit/Traylor Bros. + HNTB/LPA

650 Gerald Desmond Bridge, CA Caltrans DB 7/12 Shimmick/FCC/Impregilo

645 Foothill South Toll Road, CA Trans. Corridor Agencies DB 11/98 Flatiron/HBG/Sukut/Fluor Daniel

632 SR-91 HOT Lanes, CA Riverside County Trans. DB 5/13 Atkinson/Walsh + Parsons Brinckerhoff/URS

615 Tacoma Narrows Bridge, WA Washington State DOT DB 11/02 Bechtel/Kiewit

610 I-95 Relocation, Providence, RI Rhode Island DOT DB 6/97 Maguire Group/Cardi Construction

600 Eastside Light Rail, CA Los Angeles County MTA DB 7/04 Washington Group/Obayashi/Shimmick

547 Los Angeles light-rail ext., CA Los Angeles County Metro DB 4/11 Skanska/Rados + Parsons Brinckerhoff

541 Cooper River Bridge, SC South Carolina DOT DB 7/01 Flatiron/Skanska + Parsons Brinckerhoff

486 Metro Gold Line Foothill Ext., CA Foothill Extension Const. Auth. DB 6/11 I.. Skanska, II. Kiewit/Parsons Trans. Group

III. Webcor

446 Triangle Expressway ph. 2+3, NC NC Turnpike Authority DB 8/09 Archer Western/Granite + The LPA Group

420 I-64 St. Louis, MO Missouri DOT DB 12/06 Granite/Parsons Trans. Group/URS

414 Highway 161, TX No. Texas Tollway Auth. DB 8/09 Fluor/Balfour Beatty + AECOM

390 Route 28 Expansion, VA Virginia DOT DB 10/03 Clark Constr./Shirley Contracting Corp.

390 SR 22 Improvements, CA Orange County Trans. Auth. DB 9/04 Granite/C.C. Myers/Steve P. Rados Inc.

390 LA Expo Lt. Rail, CA Expo Line 1 Const. Auth. DB 9/06 Flatiron/Fluor/Parsons Trans. Group





($m) Project Name Owner Risk NTP Constructors

386 Conway Bypass Highway, SC South Carolina DOT DB 3/98 Fluor Daniel

350 I-225 Light Rail, CO Denver RTD DB 8/12 Kiewit+AECOM (unsol. proposal)

348 Audubon Bridge, LA Louisiana DOT DB 2/06 Flatiron/Granite/Parsons Trans. Grp.

329 Hiawatha Light Rail, MN Minnesota DOT DB 9/00 Granite/C.S. McCrossan

328 281 North Toll, TX Alamo Reg. Mobility Auth. DB 5/08 Fluor/Balfour Beatty

324 E-470 Beltway, Seg. 2&3, CO E-470 Public Hwy Auth. DB 8/95 Washington Group Intl/Fluor Daniel

323 E-470 Seg. 1, CO E-470 Public Hwy Auth. DB 7/89 Fluor/Morrison Knudsen

314 Pocahontas Parkway, VA Virginia DOT DB 7/98 Fluor/Morrison Knudsen/URS)

312 US 36 Express Lanes, ph. 1, CO Colorado DOT DB 7/12 Ames/Granite

310 183-A Turnpike, Austin, TX Central TX Reg.Mobility Auth. DB 3/05 Granite/JD Abrams

309 Heartland Freight Corridor, VA US DOT DB 10/07 Johnson,Granite/RJ Corman/LRL+ HMM

287 I-90 Innerbelt Bridge (west), OH ODOT DB 12/10 Walsh/HNTB

284 Metro Gold Line,-Pasadena, CA Blue Line Construction Auth. DB 4/00 Kiewit Pacific/Washington + Parsons

272 Innerbelt Bridge (east), OH ODOT DB 9/13 Trumbull/Great Lakes/Ruhlin + URS

260 Anacostia River Bridges, DC Washington DC DOT DB 9/09 Skanska/Facchina

251 I-15 North, NV Nevada DOT DB 9/07 CH2M Hill/Las Vegas Paving Corp.

243 I-10 Bridges Escambia Bay, FL Florida DOT DB 4/05 Tidewater Skanska/Flatiron

241 Herbert C. Bonner Bridge, NC North Carolina DOT DB 9/11 PCL Civil + HDR

238 TH 212, MN Minnesota DOT DB 8/05 Fluor/Edward Kraemer/Ames

238 I-15 Bridge Replacements, UT Utah DOT DB 1/06 Granite/Ralph L. Wadsworth Const.

234 St. Anthony Falls Bridge, MN Minnesota DOT DB 11/07 Flatiron/Manson + FIGG

233 E-470 Beltway, Seg. 4, CO E-470 Public Hwy Auth. DB 1/00 Kiewit/Washington Group

232 Palm Beach-Ft. Laud. Rail, FL Tri-County Commuter Rail Auth.DB 8/01 Herzog/Granite/Washington Group

232 US 52 Reconstruction, MN Minnesota DOT DB 2/03 Fluor/Edward Kraemer/Ames

226 Carolina Bays Pkwy, SC South Carolina DOT DB 11/99 Flatiron/Tidewater

221 I-5 Everett HOT Lanes, WA Washington State DOT DB 5/05 Atkinson/CH2M Hill

220 Blue Line Extension, DC WMATA DB 4/02 Lane/Granite/Slattery Skanska

207 Manor Expressway, Austin TX CTRMA DB 6/11 Webber/Texas Sterling

200 I-71/670 Intrchg, Columbus, OH ODOT DB 11/11 Kokosing Const./CH2MHill

198 Rt. 28 Corridor, VA Virginia DOT DB 9/02 Clark Const./Shirley Contracting Corp.

195 Pitt R. Bridge Interchange, BC Partnerships BC DB 2/07 Kiewit

192 US 17 Washington Bypass, NC North Carolina DOT DB 2/06 Flatiron/United Contractors

191 Atl. City-Brigantine Tunnel, NJ New Jersey DOT DB 10/97 Mirage Resorts ($191m Yonkers/Granite)

184 U.S. 60 Upgrade, AZ Arizona DOT DB 5/01 Granite/Sundt

180 Northwest Parkway, CO NWP Public Highway Auth. DB 6/01 Washington Group/Kiewit Western

180 I-205 LRT Extension, OR TriMet Portland DB 1/06 Stacey & Witbeck/Granite

178 US 183, Austin, TX Central Tex. Mobility Auth. DB 12/04 Granite/J.D. Abrams + URS

171 Reno ReTRAC, NV City of Reno DB 7/02 Granite/Parsons Trans. Group

149 University Line LRT, UT Utah Transit Authority DB 08/00 Flatiron/Stacy and Widbeck/WW Clyde

148 US Route 1, Key West, FL Florida DOT DB 11/04 Granite + Jacobs

140 SH 45, Southeast Tpk., TX Texas DOT DB 9/04 Balfour Beatty/TJ Lambrecht

137 MOPAC, TX Central Texas RMA DB 5/13 CH2M Hill

136 I-494 Reconstruction, MN Minnesota DOT DB 8/04 Granite/C.S. McCrossan

134 I-4 Widening, SR 44 to east of I-95 Florida DOTDB 5/12 Condotte/De Moya

132 U.S. 64 Knightdale Bypass, NC North Carolina DOT DB 6/02 Flatiron/Lane Const. Corp.

130 U.S. 20, OR Oregon DOT DB 7/05 Granite/TY Lin International


PWFinancing /Jan. 29, 2014



($m) Project Name Owner Risk NTP Constructor

129 U.S. 70, NM New Mex. SH&TD DB 7/02 Granite/Sundt/James Hamilton + URS

127 Orange Line Bridge, OR TriMet Portland DB 12/10 Kiewit

125 Portland Airport Max Rail, OR TriMet Portland DB 10/98 Bechtel

102 I-4 Over St. John’s River, FL Florida DOT DB 1/01 Granite/PCL Civil Constructors

92 I-485/85 Interchange, NC NCDOT DB 6/11 Lane/STV

90 Loop 101 HOT Lanes, AZ Arizona DOT DB 1/11 Kiewit/Sundt + Parsons/URS

86 I-17 Thomas to Peoria, AZ Arizona DOT DB 1/99 Granite/Sundt

82 Hathaway Bridge, FL Florida DOT DB 6/00 Granite

82 Loop 1604 Western Ext. TX Texas DOT DB 12/13 Williams Bros.

81 Sawgrass Expwy Widen, FL Fla. Turnpike Enterprise DB 4/05 APAC/Parsons Trans. Group

59 I-77 Rehab, NC NC DOT DB 3/07 The Lane Construction Corp. + HDR

57 Anton Anderson Tunnel, AK Alaska DOT DB 9/98 Kiewit + Hatch Mott MacDonald

56 Belt Parkway, NY NYC DOT DB 7/02 Granite Halmar + Gannett Fleming

54 Carolina Bays, ph. 2, SC South Carolina DOT DB 5/03 APAC + Wilbur Smith Assoc.

53 New River Bridge, FL Tri-County Commuter Rail DB 2/03 Washington Group


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AbertisStudies and Corporate CommunicationsDirection (34) 93 230 50 39

AIAILisa Buglione (516) [email protected],

China Construction America, Inc.Jietai Huang (201) [email protected]

Cintra, S.A.Ricardo Bosch [email protected] Ugarte [email protected]+34 91 418 5606

EGIS ProjectsAlain Poliakoff in Paris (33) 1 30 48 48 [email protected]

Ferrovial AgromanDaniel Filer (512) 637-8587

Global Via InfrastructureRafael Nevado, [email protected] Lapolla, (908) [email protected]

Granite Construction Inc.Bob Leonetti (831) 728-7580

Herzog Contracting/Herzog TransitServices Inc.

(816) 233-9001Joe Kneib [email protected] Francis [email protected] Norman [email protected] Perry [email protected] Hackbarth [email protected]

Iridium ConcesionesSalvador Myro (34) 91 703 85 [email protected]

KiewitJoe Wingerter (402) [email protected] Bennett (647) [email protected]

Meridiam InfrastructureJane Garvey [email protected] Aiello [email protected] Dionisio [email protected]

OHL ConcesionesJosé María Lopez de Fuentes (U.S.)Ignacio Garcia (Spain)[email protected]

SacyrCarlos Mijangos [email protected]+34 91 545 50 00

United WaterTom Brown (201) [email protected]

AECOMSamara Barend (212) [email protected] Graul (212) [email protected] Yelds 44 20 7776 [email protected]

ArupIgnacio Barandiaran, (415) [email protected] Karn (415) [email protected]

CDM Smith AssociatesEd Regan (803) 251-2072Kamran Khan (630) 874-7902Grant Holland (404) 720-1283Joe Ridge (603) 222-8320

Ernst & YoungMike Parker +1 (215) [email protected] Zukerman +1 (212) [email protected]

HDR | InfraConsultMichael Schneider, (213) [email protected] Placilla, (714) [email protected]

HNTBTim Faerber (312) [email protected]

JacobsPamela Bailey-Campbell (303) 968-7897

KPMGAndy Garbutt +1 (512) 501-5329Brad Watson +1 (416) 777-8142

Lochner MMM GroupTom Stoner, PE (727) [email protected] Jull, PE (905) [email protected]

Louis Berger Group Inc.Nick Masucci (973) 407-1000

O.R. Colan AssociatesSteve Toth [email protected]

Parsons Brinckerhoff StrategicConsultingDavid Earley (202) [email protected] Bieschke (202) [email protected]

Raba KistnerGary Raba (866) [email protected]

Scully Capital Services, Inc.Brian T. Oakley or John G. Ravis(202) 775-3434

Raymond Tillman

(917) 328-2265

Elias GroupDan Elias or Michael Siegel (914) 925-000fax (914) 925-9344 orwww.eliasgroup.com

Hawkins Delafield & WoodEric Petersen in NY (212) 820-9401Ron Grosser in NY (212) 820-9423Rick Sapir in Newark (973) 642-1188

Nossaman LLPGeoffrey S. Yarema (213) [email protected] Harder (213) [email protected] Santiago (202) [email protected]

Osler, Hoskin & Harcourt LLPBob Beaumont (416) 862-5861Lorne Carson (403) 260-7083Tobor Emakpor (416) 862-4268Rocco Sebastiano (416) 862-5859

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