Tolling and P3 Trends in 2009 by Robert W. Poole, Jr. Director of Transportation Policy, Reason...
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Transcript of Tolling and P3 Trends in 2009 by Robert W. Poole, Jr. Director of Transportation Policy, Reason...
Tolling and P3 Trends in 2009
byRobert W. Poole, Jr.Director of Transportation Policy,Reason Foundationwww.reason.org/[email protected]
Overview of Presentation
Financing after the credit crunch State-level interest and activitiesProject opportunitiesPolitical issues and opportunities
Credit crunch impacts
Miami port tunnel: delayed, team restructured, financed Oct. 14, 2009.Midway airport: cancelled; might be revived.Mississippi airport toll road: on hold, might be revived.I-95/395 HOT lanes: on hold, likely to be revived.
Deals that are getting financed are far less leveraged
Global Via purchase of Chile toll roads: 41% equity.Portugal Baixo Alentejo toll road: 31% equity (but partly availability payments).Abertis bid for PA Turnpike—reported to be 50% equity.Florida I-595 rebuild—only16% equity (but funding is via availability payments, hence no revenue risk).
Lots of equity available in infrastructure investment funds
Probitas estimates $84.5B as of end-2008, and another $92B being sought in 2009.Prequin estimates $115B as of early 2009; 94 funds seeking additional capital. U.S. pension funds now following the lead of Canadian and Australian funds.Problem is relative dearth of deals, not lack of capital.
States continue passing P3 enabling legislation
Enacted in 2009 so far:AlabamaArizonaCaliforniaMassachusettsPuerto Rico
Pending (and likely):MichiganPennsylvania
U.S. toll projects, 1992-2008
Stage Value ($B) Lane-miCompleted $40.0 3,900Construction 17.8 1,734Design/finance 19.4 1,887Enviro review 23.3 2,266Planning 60.5 5,900Totals: $161.0 15,687Source: FHWA, 2009
Types of projects (1): urban congestion relief
Rebuilding inadequate freeways (I-595)Adding Managed Lanes (LBJ, NTE, Beltway in northern Virginia)Building/operating Managed Lanes networks (Atlanta, San Francisco)Port-related toll truckways (Los Angeles, Miami, Tampa)
Types of projects (2):bridge repair & replacement
MO, NY bridge rehab programsVA—Jordan and Dominion bridgesCA—two LA port bridgesNY—Tappan Zee, Port Authority bridge replacementsMI—new Detroit River crossing
Types of projects (3):new and aging Interstates
New routes (tolled):Las Vegas to PhoenixI-69 Texas to Indiana
Rebuild with tolls + added capacity:Key long-haul truck routesMissing links in LCV network (see map)
Long-haul, multi-state TTWs
Debates over P3 concessions
Both national commissions said this tool should be encouraged.NCHRP synthesis 391: how to protect the public interest in P3s.Pew Center report: lessons learned from failed PA Turnpike lease.TX Legislative Study Committee report.
Federal surface transportation reauthorization
House bill (Oberstar) provisions include:
Federal regulation of all toll roads, public and private.Federal emphasis on reduced driving, increased transit.Possible new goods-movement program.
Need for P3 process reforms
Best practices, value-for-moneySeparate entities, as in Australia, Canada:
California’s Public Infrastructure Advisory CommissionMichigan’s new P3 officePuerto Rico’s new P3 agency
Principles for concession agreementsProject selection via Public Sector Comparator
15
Assessing Value for Money via PSC
Basic methodologyDevelop conceptual framework
Estimate costs and revenues
Identify and analyze risks
Assess uncertainty around the inputs to arrive at risk-adjusted values
Develop financial model and calculate net present value
Perform sensitivity analyses
0
200
400
600
800
1,000
1,200
PSC PPP Delivery
Risk Transfer
Cost
ConclusionsCredit crunch has slowed deal closure; debt less available and more costly.State interest in P3 continues to grow.Large backlog of project needs:
Urban congestion reliefBridge replacementInterstate modernization
Need to address political challenges via process reform and best practices.