PARTNERSHIPS ACCELERATE ECONOMIC DEVELOPMENT & JOB CREATION

J. Douglas Koelemay, Director

VIRGINIA LEADERSHIP IN PUBLIC-PRIVATE PARTNERSHIPS

• PPTA enabling legislation 1995 • Numerous revisions to PPTA

Guidelines over time • Creation of VAP3 office in 2010 • 2014 – Substantial update to

PPTA Implementation Manual & Guidelines

• Goal is to build strategic program, extend VAP3 leadership

• Virginia is a national leader and # 2 globally in P3 project development

PARTNERSHIPS CREATE HUGE PUBLIC BENEFITS

P3 Project Project Cost State Contribution

% of Total Cost

Jobs Supported

Economic Activity

495 Express Lanes

$ 1.9 B $ 409 M 22 % 31,000 $ 3.5 B

95 Express Lanes

$ 925 M $ 71 M 7.6 % 8,000 $ 2 B

Midtown Tunnel

$ 2.1 B

$ 420.5 M

20 %

1,700

$ 170-254 M

Total Benefits $ 4.9 B $ 901 M 18.4 % 40,700 jobs ~ $5.7 B

I-95 & I-495 EXPRESS LANES PROJECTS

I-495 Express Lanes • Opened to traffic November 2012 • Virginia’s $409 million investment

leveraged a $1.9 billion project • Transurban increased its equity

investment in 2014 • Over 10 million users in first two years I-95 Express Lanes • Opens in December 2014 • Virginia contribution of $71 million

leveraged $925 million project • Adds to managed lanes system that

include I-495 Express Lanes

ELIZABETH RIVER TUNNEL PROJECT

• Two-lane tunnel connects Norfolk and Portsmouth

• Parallels existing Midtown Tunnel under Elizabeth River

• Includes maintenance, safety improvements for existing Midtown and Downtown Tunnels, extension of MLK Freeway

• VDOT maintains ownership and oversight

• Private partner ERC will finance and build facilities, operate and maintain for 58-year concession period

NEW 2014 PPTA MANUAL AND GUIDELINES

Spencer Townsend Deputy Project Manager

FEEDBACK ON 2012 PPTA MANUAL & GUIDELINES

• 2012 PPTA Implementation Manual and Guidelines were used as foundation to solicit 100+ responses

• Broad cross section of respondents

• Key responses were:

– Overwhelmingly positive

– Both broad and specific

– Included in new 2014 PPTA Manual & Guidelines

PPTA PROJECT DELIVERY FRAMEWORK

*Parties to be notified and briefed upon request after the Oversight Board decision: ‒ Chairs of General Assembly committees ‒ MPO’s ‒ Interested members of General Assembly ‒ Special interest groups ‒ Regulatory Agencies ‒ Public

Briefing Focus: ‒ RFI results (as appropriate) ‒ Schedule ‒ Refresh on the high points from Project Development ‒ Preliminary Procurement documents ‒ Risk Analysis and Value-for-Money ‒ Estimated project cost ‒ Potential public subsidy ‒ Potential economic benefits ‒ Preliminary Business Points ‒ Initial Finding of Public Interest

Briefing Focus: ‒ Detail-Level Screening Report ‒ Desirability as P3 ‒ Feasibility as P3 ‒ HB 2 Prioritization ‒ Duration of P3 development and procurement

Briefing Focus: ‒ Major Business Points ‒ Updated Risk Allocation & Management Plan ‒ Statutory Audit results ‒ Final Value-for-Money Analysis ‒ Updated economic benefits ‒ Project bid results ‒ Public subsidy (if required) ‒ Final Finding of Public Interest

Draft and Final Contract Documents posted on P3 Website for review & comment

Final Contract Documents posted on P3 Website

KEY CHANGES IN 2014 PPTA MANUAL & GUIDELINES

Increase Transparency • Brief Oversight Board at their public

meetings • Findings of Public Interest • Brief General Assembly

Transportation Committee Chairmen

Enhance Competition • Coordinate P3 process with HB 2 • Additional review when there is only

one proposer • Additional review if material change

in project scope or risk allocation

KEY CHANGES IN 2014 PPTA MANUAL & GUIDELINES

Increase Public Engagement • Develop P3 Public Engagement

Guidelines • New VAP3 website information • 24/7 website comment opportunities

Improve Risk Assessment and Management

• Revise Risk Management Guidelines • Include risk workshop and

discussions, risk registers and risk management plans

I-66 MULTIMODAL PROJECT

Morteza Farajian Program Manager

I-66 PROJECT LOCATION

ENVIRONMENTAL APPROVALS

Purpose and Need: • Improve multimodal mobility along the I-66 corridor by providing diverse

travel choices in a cost-effective manner • Enhance transportation safety and travel reliability

• Tier 1 EIS/Record of Decision (ROD) approved November 2013. Roadway and major transit concepts can proceed separately to a Tier 2 study as long as the following criteria are met:

• Connect logical termini and be of sufficient length • Have independent utility • Not restrict consideration of alternatives for other reasonably foreseeable

transportation improvements

• Tier 2 EA initiated in summer 2014 and expected to be complete by the end of 2015.

I-66 MULTIMODAL PROJECT

Two express lanes (convert existing HOV lane and add one lane) • HOV-3 and buses travel free • Non-HOV tolled • Congestion-based tolls • Convert HOV-2 to HOV-3 by 2020,consistent with region’s Constrained Long Range Plan

Three general lanes • Open to all traffic • No tolls • Ramp-to-ramp connections (auxiliary lanes)

Rapid bus service • High frequency of service beyond peak hours • Travel in express lanes for predictable travel times Park & Ride Facilities

PROPOSED TYPICAL SECTIONS

290’

206’

246’

Alt. 1 – Concrete Barrier with Full Shoulders and Median for Future Center Transit (with auxiliary lanes, if needed)

Alt. 2A –Flexible Barrier with Buffer and Median for Future Center Transit (with auxiliary lanes, if needed)

Alt. 2B –Flexible Barrier with Buffer and No Median (with auxiliary lanes, if needed)

STATUS IN THE PPTA PROJECT DELIVERY FRAMEWORK

Project Development

TENTATIVE MILESTONE SCHEDULE

Milestone Anticipated Date

Refine Project Scope Oct 2014 – Jan 2015

CTB Project Briefing January 2015

Public Information Meetings January 2015

Issuance of RFQ February 2015

NEPA Public Hearing May 2015

Announcement of Short-listed Teams Late Spring 2015

Issuance of Draft RFP Late Spring 2015

NEPA / FHWA Decision End of 2015

Issuance of Final RFP End of 2015

Financial Close Late 2016

Start of Construction 2017

PROJECT SCREENINGS AND THE PIPELINE

Alexandra Lauzon Deputy Project Manager

PPTA Steering

Committee

Project Development

Returned to Agency or Proposer

Unsolicited P3 Projects

Detail-Level Screening with

Recommendations

Policy Review with Recommendations

Solicited P3 Projects

Oversight Board*

Agency

NO

High-Level Screening with

Recommendations

NO

PROJECT SCREENING PROCESS

PROJECT SCREENING PROCESS

PPTA Steering

Committee

Project Development

Returned to Agency or Proposer

Unsolicited P3 Projects

Detail-Level Screening with

Recommendations

Policy Review with Recommendations

Solicited P3 Projects

Oversight Board*

Agency

NO

High-Level Screening with

Recommendations

NO

High-Level Screening Criteria • Ability to Transfer Risk

• Funding Requirement

• Ability to Raise Capital

• Complexity of Effectively Leveraging Private Sector Innovation/Expertise

• Consistent with Federal Requirements

• Accelerated Project Development

• Satisfies Public Transportation Need

• Addresses Priorities in State, Regional and/or Local Transportation Plan

• Project Efficiencies through PPTA Delivery

PROJECT SCREENING PROCESS

PPTA Steering

Committee

Project Development

Returned to Agency or Proposer

Unsolicited P3 Projects

Detail-Level Screening with

Recommendations

Policy Review with Recommendations

Solicited P3 Projects

Oversight Board*

Agency

NO

High-Level Screening with

Recommendations

NO

Detail-Level Screening Criteria • Public Need and Benefits

• Economic Development

• Market Demand for PPTA Delivery

• Stakeholder Support

• Legislative Considerations

• Technical Feasibility

• Systematic Interface and Compatibility

• Financial Feasibility

• Legal/Legislative Feasibility

• Project Risks

• Life Cycle Management

CURRENT VAP3 PIPELINE

Status of VAP3 Pipeline

Projects in current VAP3 Pipeline 15

Projects have completed High-Level Screening 12

Projects have advanced to Detail-Level Screening 7

Projects Detail-Level Screening underway 4

Projects with completed Detail-Level Screening 3

Projects advanced as P3’s into Project Development 1

CURRENT PPTA PIPELINE

CURRENT PPTA PIPELINE

FUTURE OF VIRIGINIA P3 PROGRAM

Jacqueline Cromwell Communications & New Business

Program Manager

FUTURE OF VIRIGINIA P3 PROGRAM

• New 2014 PPTA Manual and Guidelines will continue to strengthen transparency, competition, public engagement, risk assessment and management

• P3 benefits -- equity, risk sharing, life-cycle costs, timely delivery

• Continue review of P3 process, decision-making, & accountability

FUTURE OF VIRIGINIA P3 PROGRAM

• VAP3 Pipeline will broaden in scope: 1. Real Estate transactions 2. Optimizing existing assets

• Current VAP3 Pipeline contains several procurement types:

1. PPTA 2. PPEA 3. VPPA

• VAP3 Pipeline is continuously updated and on Website

P3 PROGRAM NEXT STEPS

• Final 2014 PPTA Implementation Manual and Guidelines

• Coordinate other transportation agencies adoption of the 2014 PPTA Manual

• Finalize Guidelines in early 2015: 1. Public Engagement 2. Risk Management 3. Project Identification and

Screening 4. Value for Money Analysis

P3 PUBLIC ENGAGEMENT

• VAP3 new website – live in early December and serves as basis

• Twitter - VAP3 live and serves as quick release of information

• Apps – under consideration to share and interact with consumers

LESSONS LEARNED, CHALLENGES AHEAD

Douglas Koelemay Director

P3 LESSONS LEARNED

• Permanent office acts as champion, catalyst, guide

• Consistent, detailed guidelines facilitate delivery, realization of public benefits

• Continuous reviews of assumptions and conclusions improve project decisions

• Effective communications focus on benefits produced, broad policy goals advanced

• Steady flows of information to agencies, officials, planners, media build understanding and trust

• Others have good ideas, too, and competition is growing

P3 SHARED CHALLENGES

• Public funds are shrinking • Traditional delivery methods are not filling the gap • Political focus too often is short-term and small, not strategic • Engagement allows us to see members of the public as customers

and consumers of services willing to pay for what they value • P3s remain unnecessarily complex, mystery to many • More standard approaches, terms are needed • New P3 approaches can help fill gaps beyond transportation

THANK YOU

PARTNERSHIPS ACCELERATE ECONOMIC

DEVELOPMENT & JOB CREATION

www.p3virginia.org

J. Douglas Koelemay Director, Virginia Office of Public-Private Partnerships

Douglas.Koelemay@P3.Virginia.gov