Image From ..blog.cleveland.com
Construction on major infrastructure repairs and improvement projects is being advanced now by 'P3s' --public private partnerships, according to the Ohio Dept. of Transportation.
ODOT and Governor John Kasich announced that, for the first time in ODOT history, the state is implementing P3 financing that will eliminate construction delays for the Innerbelt Bridge project despite ODOT's $1.6 billion budget deficit.
The Innerbelt Bridge is a truss arch bridge in Cleveland, Ohio carrying Interstate 90/Innerbelt Freeway over the Cuyahoga River, a major state transportation corridor. With the announcement, Ohio became the 30th state in the U.S. to enact legislation permitting P3 financing.
According to the Cleveland Plain Dealer, ODOT will seek bids for an engineering, construction and financing team to pay for the estimated $332 million project up front and have the Interstate 90 span erected by 2016. The state would then pay the design-build-finance team with principal and interest.
If Ohio had elected to finance and construct this bridge under conventional methods, construction wouldn't start until 2016, when the agency had money in hand. The bridge wouldn't be finished until 2019, meaning prolonged traffic congestion on a major east-west artery near downtown.
And it would mean extended use of an aging bridge that's similar in design to one that collapsed in Minneapolis in 2007.
Cleveland Mayor Frank Jackson said he appreciated ODOT choosing the second bridge to roll out a new policy that appears to set the project back on track, but he said he has concerns about whether the new approach will limit the number of bidders, who presumably must show they can finance a $332 million project.
"Does that give us the lowest and best bid or not?" Jackson said, who also wondered how the state will handle terms of the pay back to contractors.
ODOT says that in addition to the Innerbelt Bridge, it may explore similar financing for additional projects such as the Brent Spence Bridge in Cincinnati; the Portsmouth BYpass in Scioto County and an interchange for U.S. Route 36 and SR 37 on I-71 in Delaware County.
ODOT officials said they expect to pay back the contracting team over three years, from 2016 to 2018. Interest and other terms will be shaped by the bids.
Such deals are growing in popularity as states deal with a squeeze on gas-tax dollars, according to the Federal Highway Administration. But, states must be careful that the deals are cost effective.
Your thoughts? Are P3s the way to go?