February 21, 2012 · 7:16 AM
A couple of my blog posts have mentioned the use of public-private partnerships (“PPPs”) as an alternative source of highway construction financing, including my February 6, 2012 story about NCDOT’s plans to widen I-95 (by the way, last Friday, the Federal Highway Administration gave tentative approval to tolling on I-95).
It remains unclear whether any private money might be utilized to finance the I-95 widening project. What is clear is that PPPs present a host of legal issues that all project participants (and their attorneys) would need to wrestle with should the NCDOT seek private money for I-95, or any other state highway project.
The purpose of this blawg post is to supply three resources for enhancing our collective understanding of the practical implications of PPP financing. A good place to start is this blog post from the blawg “Best Practices Construction Law,” authored by attorney Matthew J. DeVries, who practices in Virginia and Tennessee. Mr. DeVries links to the second resource you should consider, and that’s the AGC’s White Paper on Public-Private Partnerships. Contractors may want to jump to page 13 of the White Paper, which includes a chart summarizing how a PPP could shift typical risk allocations:
For additional depth, consult the National Cooperative Highway Research Program’s Major Legal Issues for Highway Public-Private Partnerships. It presents several representative case studies and concludes that several successful projects have given PPP participants the flexibility to select the optimal project delivery system for their particular project. Such flexibility, of course, could mean procurement outside the sealed bid process.
I’ll be keeping an eye on subsequent I-95 developments. Should the NCDOT begin exploring PPPs, it is hoped that these three resources will provide the contracting community with a foundation for understanding the legal ramifications of this alternative highway financing framework.
Filed under Feature story, Local law, policy & news, Project Delivery Systems, Projects of Interest, State law, policy & news
Tagged as AGC, alternative project financing, construction contract risk allocation, Highway construction, I-95 widening, NCDOT, PPP's, public bid, public-private partnerships
October 4, 2011 · 10:53 PM
Creative carpool-lane scofflaws, like this artiste from New York, might soon be able to retire their mannequins, at least in the Charlotte area. As reported in today’s Charlotte Observer, N.C. Department of Transportation Secretary Gene Conti informed the Charlotte City Council on Monday that a contractor could be selected to convert high-occupancy vehicle (“HOV”) lanes to high-occupancy toll (“HOT”) lanes on I-77 as soon as this time next year. Once the conversion is complete, high-occupancy vehicles would be authorized to use the HOT lanes without charge, but solo motorists trying to shorten their morning and evening commutes would have to pay a toll via electronic transponder.
Image by CountyLemonade via Creative Commons license
The project could cost upwards of $200 million, but it wasn’t the price tag that caught my eye. Rather, I’m interested in the possibility that the conversion could be financed through a public-private partnership. A number of other states have either utilized or are considering utilizing “PPP’s” in developing HOT lanes. In fact, Georgia appears primed to build new toll lanes alongside I-75 and I-575 in Cobb and Cherokee counties through a PPP, at a price tag over $1 billion.
Which got me to thinking:
- What are the potential legal issues that must be considered before the NCDOT engages in a PPP for an HOT?
- What are the public policy considerations?
- Might the politics of developing so-called “Lexus Lanes” be too HOT to handle?
I hope to give these questions some additional thought in the days ahead and provide some additional insights in a subsequent blog post.
Filed under Local law, policy & news, State law, policy & news
Tagged as Conti, high occupancy toll, Highway construction, highways, infrastructure, N.C. construction law, N.C. Department of Transportation, N.C. DOT