PPPs: INSIGHTS FROM NORTH AMERICA. Presenter: Brian Middleton. worldwide

Transcription

1 PPPs: INSIGHTS FROM NORTH AMERICA Presenter: Brian Middleton

2 AGENDA Overview of US PPP market Case studies of sample projects Summary/Conclusions PPPs: An insight from North America

3 SUMMARY OF PPPs IN NORTH AMERICA Total Value per Year (US$ millions) Projects per year PPPs: An insight from North America

4 TRADITIONAL PROJECTS STRUGGLING ON TIMELINESS & COST One study found only: 47% on budget 55% on time Second study found that as projects grow in value, the likelihood of over-running also grows 80 th Percentile of traditional project performance PPPs: An insight from North America

5 MORE U.S. OWNERS CONSIDERING PPPs Transportation PPP projects Study of 10 PPPs showed All substantially on or ahead of completion dates Projects were an average of 22.6% below owner s estimates Reasons include: Alternative technical concepts and risk transfer Innovation and market Contractual structure PPPs: An insight from North America

6 HISTORY OF TRADITIONALLY DELIVERED MEGA PROJECTS Oakland Bay Bridge, San Francisco Original estimate $1.4 billion and 5-years Final cost $6.4 billion and 12- years 400% over budget and 7-years late Eastside Access, New York Projected cost is $4.5 billion over budget 14-years later than planned and still incomplete Oakland Bay Bridge PPPs: An insight from North America

7 MEGA PPP PROJECT HISTORY On average PPPs 15% less than estimated cost Eagle Project, Denver 12% below estimate and almost one year ahead of plan PennDOT bridge project 25% below estimate and 8- months ahead of 50 month planned completion Port of Miami Tunnel 33% under budget PPPs: An insight from North America

8 GENERAL LESSONS LEARNED Many PPP projects complete or underway, sophistication of market developing Owners should have expert technical, legal and financial advisors proposers will have Value for money assessments should be done and take into account qualitative and quantitative factors PPPs can deliver lower costs, budget certainty and guaranteed delivery PPPs: An insight from North America

9 Alternative Delivery Examples

10 TREX, DENVER COLORADO US$1.67 billion transit and highway D&C project Design and construct new 31 kilometre light rail and additional capacity to 27 kilometres of highway Leveraged multiple funding sources in combined project to address corridor problems Provided valuable experience in alternative delivery $39 million under budget, 22 months ahead of plan Payments on earned value during design and construction

11 EAGLE PROJECT, DENVER COLORADO US$2.3 billion Rail PPP project 34-year concession Built on experience from Trex $450 million in private debt and equity $300 million under estimate and 10 months ahead of plan Payments on earned value during design and construction and availability payments during O&M

12 US 36 EXPRESS LANES PROJECT, COLORADO Upgrade of arterial motorway Reconstruct 26 kilometres of US 36, including building one express lane in each direction 18 kilometres Phase 1 8 kilometres Phase 2 Bus Rapid Transit, HOV, SOV Reconstruct six bridges Widen five bridges New commuter bikeway Phase 1 Complete in 2015 Phase 2 Complete in 2016

13 US 36 PHASE 1 DESIGN-CONSTRUCT RFP Project defined by contractual drawings in RFP Defined limits of mainline reconstruction, typical sections Defined structures to be replaced or widened Defined limits of bikeway construction Limited ability to be innovative

14 PHASE 2 PROJECT OVERVIEW Concessionaire will: Construct remaining 8 kilometres Finance portion of remaining construction Operate and maintain entire corridor, and I-25 Express Lanes between US 36 and Denver Receive toll revenue from US 36 Express Lanes Concession term: 50 years

15 PENNDOT BRIDGE PROGRAM $899 million program to replace and maintain 558 bridges across Pennsylvania 58 structurally deficient bridges to be replaced in first year, remainder to be complete in 42- months $835 million in private debt and equity Payments on milestones during design and construction and availability payments Bridges are spread across the 120,000 sq km of Pennsylvania

16 Lyndon B. Johnson Freeway PROJECT LIMITS, TEXAS Project comprises 4 elements Improvements to I-635 Improvements to I-35E Two new interchanges

17 I-635 CORRIDOR 8 Reconstructed General Purpose Lanes 4 to 6 New Managed Toll Lanes 2 and 3 Lane Continuous Frontage Roads

18 I-35E CORRIDOR 4 Elevated Managed Lanes Miscellaneous Ramps/Frontage Roads Existing Main Lanes to Remain in Place Capacity Improvement (Optional)

19 FUNDING AND SCHEDULE Public funds amount is $489 million TIFIA/PABS financing amount is approximately $1.45 billion Construction cost is approximately $2.2 billion Debt retirement and O&M cost through tolling revenue PPPs: An insight from North America

20 SUMMARY PPPs are coming of age in North America Mix of availability and revenue risk models Best value obtained from performance led RFPs Value for money obtained Lower upfront and life cycle costs Earlier and guaranteed delivery PPPs: An insight from North America