Infra Insight Blog

Posted by guest blogger Ryan J. Orr

A recently published paper analyzes returns on infrastructure investments and produces some rather surprising findings. The paper, Risk, Return and Cash Flow Characteristics of Infrastructure Fund Investments by Florian Bitsch, Axel Buchner, and Christoph Kaserer, examines an extensive dataset of infrastructure and non-infrastructure deals and finds that the data does not back up the conventional wisdom that infrastructure investments offer long-term, stable and predictable, inflation-linked returns with low correlation to other ...

On June 15, House Transportation and Infrastructure Committee Chairman John Mica and Rep. Bill Shuster, Chairman of the Railroads, Pipelines and Hazardous Material Subcommittee, introduced the Competition for Intercity Passenger Rail in America Act.

Chairman Mica said: After 40 years of costly and wasteful Soviet-style operations under Amtrak, this proposal encourages private sector competition, investment and operations in U.S. passenger rail service. The legislation would force Amtrak to sell the Northeast Corridor (NEC) to the U.S. government, establish a committee ...

As discussed in our previous blog post, the U.S. Department of Transportation (USDOT) announced this week the availability of nearly $527 million in FY 2011 funds for the third round of USDOT’s wildly popular TIGER Discretionary Grant program.

Pre-applications for the funds are due by October 3, 2011, and final applications are due by October 31, 2011.  USDOT will host a half-day seminar and webcast providing information and guidance on the TIGER application process on July 18, 2011.

The TIGER program awards funds on a competitive basis to projects that will have a significant ...

The federal fiscal 2011 budget compromise authorized a third round of stimulus spending on transportation capital projects, dubbed TIGER III, under the Transportation Investment Generating Economic Recovery program. $527 million will become available from the U.S. Department of Transportation for selected projects.

Of this amount, up to $150 million will be slated for direct loans and other credit assistance on terms similar to the TIFIA program. This more than doubles up on the $122 million TIFIA budget authority for the 2011 fiscal year.

What we are interested in seeing is ...

The just ended InfraAmericas P3 conference in New York City brought together virtually every active participant, public and private, in the U.S. transportation P3 industry.  A number of public agencies showcased their plans and projects, and there was a palpable sense that opportunities to bring U.S. projects forward are growing significantly.

Perhaps the project producing the most buzz at the conference is the Knik Arm Bridge and Toll Authority’s Knik Arm Crossing project in Alaska.  KABATA came to the conference loaded for bear (a not infrequent pastime in this bountiful ...

The National Conference of State Legislatures (NCSL) and the Center for Excellence in Project Finance at the American Association of State Highway and Transportation Officials (AASHTO) recently released the report entitled "Transportation Governance and Finance: a 50-State Review of State Legislatures and Departments of Transportation," and will be hosting a free webinar on June 21 at 2pm ET to present the findings of the study (previewed during a committee meeting in January).

Listening to the webinar and reading the study is a must for anyone who wants to understand how ...

The International Bridge, Tunnel and Turnpike Association (IBTTA) is hosting a free panel on "Rebuilding America's Interstate Highway System" on June 21 from 8-10:30am ET. The program, which will be held at the Information Technology and Innovation Foundation in Washington, DC, will also be broadcast live over the Internet for those who cannot attend in person.

The event targets anyone interested in exploring real solutions to the challenge of funding improvements to interstate highways and other major road systems in America including congressional staff, transportation ...

The Railroad Safety Improvement Act of 2008 (RSIA) was the most comprehensive rail safety legislation in several decades.  Many railroads are busy with the rollout of positive train control, but there are many other rail safety initiatives underway at the same time.  This is the second in a series of posts on what else is going on in railroad safety, besides positive train control.

FRA is in the midst of a rule making to implement the RSIA requirement that  passenger and freight railroads to establish risk reduction programs.  As part of the programs, railroads would be required to produce ...

The roll-out of positive train control (PTC) is a daunting task for many railroads.  Even without PTC we would still call this a very busy time in the realm of railroad safety.  The Rail Safety Improvement Act of 2008 (RSIA), which included the PTC mandate, was the most comprehensive rail safety legislation in several decades.  It would be easy in light of PTC to lose sight of all the other RSIA initiatives underway, but that would be a mistake.

In an effort to help our readers stay current, we will devote some space here to a series of posts on RSIA implementation issues other than PTC.  I will be ...

During the recent legislative session, TxDOT received authority under Senate Bill 1420 to develop certain projects, including, among others, the SH 99 Grand Parkway project in the Houston area, as well as the I-35E Managed Lanes project in the Dallas/Fort Worth area through a public private partnership procurement process. On June 10, 2011, TxDOT intends to issue requests for information (RFIs) to assist in formulating strategies for the development of these urgently needed projects. Copies of each RFI will be available on TxDOT's website. TxDOT is seeking RFI responses from ...

The Riverside County Transportation Commission, which oversees funding and coordination of all public transportation services within Riverside County, is seeking a Toll Project Manager to manage delivery of toll projects from the environmental phase through design and construction.

This is a contract employee position that will terminate upon project completion or at the discretion of the RCTC. It is expected that the initial contract term will be three years and may be extended based on the needs of the toll program and RCTC.

Ideal candidates should have advanced knowledge of ...

Monday, U.S. Transportation Secretary Ray LaHood announced an additional $2 billion in High-Speed Intercity Passenger Rail Program funding, bringing the total awards for the program to $10.1 billion.  USDOT distributed the $2 billion to 22 projects in 15 states, but three big winners together received over $1.8 billion or about 90 percent of the additional money.

We said we will roll out our view of the big winners on three successive days, in reverse order.  On Monday, we explained why we think California is the third biggest winner in this latest round of funding. Yesterday, we ...

As discussed in yesterday's post on California, three big winners have emerged from the U.S. Department of Transportation’s announcement of $2 billion in federal funds to 15 states for 22 different high-speed and intercity passenger rail projects.  The second biggest winner of this funding round is the Midwest region.

Illinois received $186 million for upgrades and improvements to the Chicago – St. Louis corridor between Dwight and Joliet, Ill., to allow trains to operate at 110 mph (from 79 mph) and increase operational flexibility and reliability.  Also on the Chicago – St ...

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Today U.S. Transportation Secretary Ray LaHood announced an additional $2 billion in High-Speed Intercity Passenger Rail Program funding, bringing the total awards for the program to $10.1 billion.

The $2 billion awarded today by the Department of Transportation was largely redistributed from initial awards to Florida, whose governor canceled the state’s high-speed rail project due to concerns about cost overruns and operating subsidies.  DOT distributed today’s funds to 22 projects in 15 states, but three big winners together received over $1.8 billion or ...

Last week, the North Texas Tollway Authority scored a touchdown by closing on $1 billion of bonds and notes to finance an 11.5 mile extension of the President George Bush turnpike in the Dallas Metroplex, which provides convenient access to the new Dallas Cowboys football stadium.  A major factor in the success of the transaction is the participation of the Texas Department of Transportation in the financial structure.  The project was originally to be procured as a P3 under TxDOT's CDA Program, but state legislation gave NTTA an option to develop and operate the project, for which NTTA ...

The Reason Foundation, a non-profit, public policy think tank based in Los Angeles, seeks a policy analyst in transportation.  Qualified candidates should have a relevant degree, a solid understanding of free-market public policy, and an aptitude for written communication. 

Ideal candidates will be very familiar with Reason's transportation policy work and be able to describe what they can contribute to the organization.  Work location is negotiable and salary commensurate with experience.  Applicants at all levels of experience are invited to apply. The application deadline is ...

On Monday March 14, House Transportation Committee Chairman John L. Mica (R-FL) conducted the latest of a series of field hearings, this one in his home district in Central Florida, to discuss pending major transportation legislation. It was the only scheduled field hearing in Florida on the transportation bill. The hearing was focused on improving and reforming our nation's surface transportation programs.

Among those asked to testify were:

• Geoffrey Yarema, Partner, Nossaman LLP
• The Honorable Frank Bruno, County Chair, County of Volusia
• Ananth Prasad, Assistant Secretary for ...

The fiscally conservative House majority continues to pursue reductions in federal spending, and federal transportation spending is part of the mix.  Further use of the general fund to supplement the Highway Trust Fund motor fuel taxes, as well as increases in fuel taxes, are opposed by the House majority.  Cuts could come in several forms, including cuts in Title 23 programs overall or cuts to specific programs.

Given the diminishing role of the Highway Trust Fund in funding future transportation investment, federal credit assistance under the TIFIA program needs to grow in ...

On February 17, 2011, Judge Wynne Carvill of the Alameda County Superior Court filed a 38 page opinion denying the efforts of Professional Engineers in California Government (PECG), the union that represents Caltrans engineers, to stop Phase 2 of the Presidio Parkway project in San Francisco.  PECG sued the California Department of Transportation (Caltrans)  and the San Francisco County Transportation Authority (SFCTA), as well as the California Transportation Commission and officials of each of these agencies, seeking a halt to Phase 2, which had been awarded as a public private ...

The National Conference of State Legislatures (NCSL) has released the report "Public-Private Partnerships for Transportation: A Toolkit for Legislators."  The text of the report is short and concise (32 pages, with multiple appendices), yet provides a thorough overview of the the pros and cons of PPPs.  It also sets forth nine principles for consideration by legislators in deciding if and how to pursue public-private partnerships.  

The report is very well sourced, with examples of how projects and jurisdictions addressed matters that affected their programs and projects.  The ...

AASHTO, through its Center for Excellence in Project Finance, has released its final report on strategies for funding and financing surface transportation for the next decade. The report, Funding and Financing Solutions for Surface Transportation in the Coming Decade,is available for download via AASHTO’s website at the following address:

http://www.transportation-finance.org/pdf/featured_documents/sep_30_report_final_2011_02_02.pdf

In September 2010, AASHTO convened a forum of members of Congress, representatives of state and local governments, and ...

FHWA has extended the deadline for FY2011 TIFIA Letters of Interest (LOI) to March 1, 2011. The previous Notice of Funding Availability (NOFA), issued on January 19, had allowed less than a month for interested applicants to prepare and submit LOIs.

The January 25 revised NOFA included a new phrase addressing the role of tolling and pricing programs in enhancing environmental sustainability. Under the revised selection criteria, applicants can demonstrate that their projects help preserve and protect the environment through the use of tolling or pricing structures to reduce ...

The California Department of Transportation started off the New Year with a significant step in its public-private partnership program.  After an Alameda County Superior Court judge dissolved a temporary restraining order and denied a preliminary injunction sought by Professional Engineers in California Government, the California Department of Transportation, in cooperation with the San Francisco County Transportation Authority, awarded the contract for the Presidio Parkway Project to Golden Link Concessionaire, LLC, a consortium led by Hochtief PPP Solutions North ...

Continuing a string of awards recognizing its groundbreaking financial structure, The Bond Buyer named the Port of Miami Tunnel Project the 2010 Deal of the Year in the nontraditional financing category.  The ninth annual black tie event, held in New York City on Dec. 9, recognized some of the country’s most innovative municipal bond issuers for transactions in a range of sectors, including transportation, schools, water and sewer systems, wind, and public pensions.  The publication considered nearly 80 deals that closed between Oct. 1, 2009, and Sept. 30, 2010.

The $1 billion Port ...

This morning, members of the National Surface Transportation Infrastructure Financing Commission and National Transportation Policy Project of the Bipartisan Policy Center released a joint statement urging Congress to take steps toward several transportation policy principles designed to help guide deliberations over how to extend, fund and improve the federal surface transportation program in the face of dire fiscal realities. Some of the key proposals include the call for Congress to incentivize and remove barriers to increased state and local revenues from direct user ...

On Wednesday, the California Transportation Commission (CTC) approved the $950 million Gerald Desmond Bridge Replacement Project for one of 10 state project slots available under California’s Design-Build Demonstration Program. 

The CTC’s approval authorizes the Port of Long Beach and the California Department of Transportation (Caltrans) to deliver the project using the best-value design-build method contemplated under the program.  The Port of Long Beach and Caltrans released the request for qualifications (RFQ) for the project’s design-build contract on ...

AASHTO recently sponsored a Congressional Forum on funding and financing surface transportation in the coming decade.  Academic co-sponsors were America 2050 at the Regional Plan Association; Fels Institute of Government at the University of Pennsylvania; Georgia Institute of Technology; Humphrey Institute at the University of Minnesota; Keston Institute of Infrastructure and Public; Finance at the University of Southern California.

Over 25 staff members of Senate and House committees participated.  John Horsley, Executive Director of AASHTO, made one of the ...

Earlier this week USDOT Secretary LaHood announced the winners of the highly competitive TIGER II grant application cycle. Forty-two capital construction projects and 33 planning projects in 40 states will share nearly $600 million in grant funds.

According to the announcement, USDOT received nearly 1,000 construction grant applications for more than $19 billion from all 50 states, U.S. territories and the District of Columbia.  Roughly 29 percent of TIGER II money goes for road projects, 26 percent for transit, 20 percent for rail projects, 16 percent for ports, four percent ...

A short six months after shortlisting proposers, the California Department of Transportation and the San Francisco County Transportation Authority selected Golden Link Partners, a consortium led by Hochtief PPP Solutions North America and Meridiam Infrastructure North America, as the Preferred Proposer for Presidio Parkway Project.  Golden Link Partners submitted an annual availability payment of $28,549,189, well within the $35 million limit authorized by the California Transportation Commission in April 2010.  This significant event in the procurement follows closely ...

The Federal Railroad Administration (FRA) recently published a progress report (PDF) presenting its ambitious vision for the congressionally-mandated National Rail Plan (NRP).  The NRP is being developed as part of the Passenger Rail Investment and Improvement Act of 2008.  The progress report builds upon the Preliminary National Rail Plan (PDF) submitted to Congress last year.  When completed, the NRP is expected to present a framework for improving our transportation network for future generations.

The progress report emphasizes the importance of efficient and effective ...

Last week the National Governors Association strongly urged key Senators to stand with them against new restrictions on public private partnerships and tolling in the House T&I Committee’s draft surface transportation bill. In their letter to chairs and ranking members of the Senate Environment and Public Works, Finance, and Banking, Housing and Urban Affairs, the NGA highlighted the efforts of state and local governments to pursue innovative financing options to complement traditional sources, and asked the Senate to omit the proposals from the Senate’s ...

The Port of Long Beach, one of the largest and busiest Ports in the world and a major inter-modal center for the cargo movement throughout the Western United States and beyond, has reached a major milestone in the approximately $1B plan to replace the Gerald Desmond Bridge on a design-build basis using the authority granted by California’s design-build demonstration program. As the first cable-stayed bridge ever built in California, the project is expected to be a landmark structure for the Port and surrounding communities.

On September 30, the Long Beach City Council approved the ...

The Mineta San José International Airport Terminal Area Improvement Program was selected as the Best Overall Top Project and as the best Transportation Project in Northern California for 2010 by California Construction magazine during its annual statewide competition that recognizes construction and design excellence.  The project represents the first major airport design-build project in California and includes design and construction of a new terminal, access and roadway improvements, parking facilities, tenant relocations, demolition of existing facilities, and ...

On August 30 the Metro Gold Line Foothill Extension Construction Authority issued a Request for Proposals (RFP) to three teams vying for the Foothill Extension Phase 2A light rail alignment work. The design-build-finance project includes 11.5 miles of new track, a 25+ acre light rail maintenance facility, six stations in five cities, and multiple bridges along with the needed utilities and crossing systems. Phase 2A is anticipated to generate 7,000 jobs and $1 billion of economic output for the region during construction and will be the first Measure R rail project to break ground ...

The Virginia Department of Transportation (VDOT)'s commitment to public-private partnerships can be seen in the new opening for a Public Private Transportation Act (PPTA) Program officer. This position is part of the new Administration's efforts to re-invigorate the PPTA program by developing a comprehensive, programmatic approach to its public-private partnerships procurement process.

As described in the full job description, this position will focus on providing "multi-modal solutions to Virginia's transportation challenges by providing strategic leadership for ...

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 ...

Indicative of the progress and forward momentum of the project, the California High-Speed Rail Authority is hiring.  The executive management team is expanding as the project makes advancements such as the recent award of $2.25 billion in federal grants.  With newly appointed CEO Roelof Van Ark at the helm, the Authority is seeking a Regional Director for Southern California to add to the team.

As described in the full position dossier, The Regional Director is responsible for ensuring the high-speed train project in Southern California continues forward on the planned schedule and ...

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 ...

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.

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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 ...

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.

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 ...