2. It’s helping to build Keystone XL
South Mountain Freeway Public-Private Partnership Concept Advances
The Arizona Department of Transportation, in close collaboration with the Maricopa Association of Governments and the Arizona Division of the Federal Highway Administration, has selected the project-delivery approach that will be used to construct the South Mountain Freeway in the event that the Final Environmental Impact Statement (FEIS) indicates a preferred alternative rather than the no-build option. The South Mountain Freeway will be procured as a single project using a public-private partnership approach. The Design-Build-Maintain delivery mechanism will include a long-term maintenance component but will not include a private finance option.
This decision was made after more than a year's worth of analysis following the submission of an unsolicited proposal. The submission provided an opportunity for ADOT to explore several ways of delivering the project in the event the federal environmental impact process recommends a preferred alternative. This extensive analysis considered a traditional design-bid-build approach, several design-build options, and public-private partnership (P3) alternatives including those with maintenance options, private finance options, or both. Using a Value for Money approach, ADOT and its partner agencies determined which approach would provide the best value for Arizona taxpayers, which would allow the agency to mitigate risk most effectively, and which would provide the most efficient delivery option.
Nothing in this selection impacts the FEIS. No further procurement activities will move forward until the FEIS is released in mid to late September. Following the release of the FEIS, if it recommends a build alternative, ADOT will release a Request for Qualifications, which will serve to notify the industry of the qualifications that ADOT and its partners are seeking in potential bidders. Responders will have approximately six weeks to submit their required qualifications and will be notified approximately four weeks later of those firms or consortia of firms that are selected for the short list of potential bidders.
|From "Scientists on where to be in the 21st century based on sustainability"|
"This year’s plenary included the signing of an Agreement of Cooperation between the states of Arizona and Sonora through the Arizona Department of Water Resources and Sonora’s State Commission on Water. This agreement allows both states to jointly evaluate the feasibility of Sea of Cortez desalination to augment and increase water supply resiliency in Arizona and Sonora. This agreement is signed at a time where the Arizona-Sonora region is facing critical water supply challenges and experiencing extended droughts."It is highly unlikely that water desalinated and transported from the ocean will not be privatized, especially if the pro-P3 Arizona-Mexico Commission gets in the middle. Desalination plants are increasingly being built in the US for use with brackish water, including one in California which is a public-private partnership, and incidentally, Poseidon Resources Corp, the company behind this plant, held a presentation about this facility for the AMC 2014 Plenary Environment and Water Committee (titled 2-IDE Powerpoint Arizona.pdf within the zip file). Is a water pipeline a possibility for AMC's god-child CANAMEX/I-11?
"Here’s how they work: States borrow a couple hundred million dollars from a private company to start construction right away but pay the loan back slowly over many years with interest. It’s the transportation version of a mortgage, Larkin Thomason said."Promoted as "innovative financing tools," public-private partnership deals for infrastructure are essentially privatization with a bit more oversight on the part of the government and paid for with future tax dollars and/or tolls, in the case of roads.
"The first three miles of the bypass will be funded by NDOT, but the next 12 miles, costing between $350 and $450 million, will have to come from an outside company in a public-private partnership... The bypass could become part of an even bigger project - Interstate 11... Portions of I-11 could become public-private partnerships, according to Rosenberg, meaning additional toll roads.In more recent news, a public-private partnership was abandoned for the bypass in favor of a gas tax increase (source), despite a toll-road being studied, and the option having been legislated (Source).
Tolls look to be the fastest option to getting both projects built" (Source).
“[Nevada officials] recognize that the cavalry is not coming, so they’re trying to think of their own tailored solutions."While this may seem like the simple observation of an expert, the quotation fails to acknowledge the involvement of the Brookings Institute and Puentes in pushing for public-private partnerships, trade corridors and transportation infrastructure, and the concept of the megapolitan such as the Sun Corridor. This is not insignificant in the least.
"Every dollar in the MAG region, and this project is in the MAG region, that they anticipate coming in the next 20 – 25 years has been programmed. It will be a long time before there will be any new incremental money to do anything other than what was in the original program. Public / private money is reticent to be invested in projects where the alternative alignment study and where the environmental work has not yet been completed. The opportunity that is here is that the coalition that they have been working with has made a commitment to work with them on possible donation of a significant amount of Right of Way, if the alignment study ultimately shows that this road should go through their property. If it does not, all bets are off. If it ultimately does show that, they have committed to sit down and work with them on developing some sort of a donation agreement. If they have received that money, one of the costliest pieces of a major rebuild project is Right of Way. If they can get that Right of Way for little to nothing based upon this study, then when they go out with a solicitation and potentially do this road as a public / private partnership as a toll road, that is a cost that they do not have to incur... What they need is private capital to build the facility and then do this as a public / private partnership. That is the plan.” John McGee, Executive Director for Planning and Policy for the Arizona Department of Transportation (Source p 10).
Deanna Beaver: "...I would like just a little clarification... why originally was -- Congress passed the law that the section was just from Nevada to Phoenix as opposed to the full length of the state?"
Floyd Roehrich: "Now, Mr. Flores, Ms. Beaver, I've got to be careful here. I can request Congress, but they have to answer that. We have no idea. Nobody knew that was in there until it showed up... we'll never get satisfaction from Congress, because I -- I don't know why they put it in there. And we in staff have no -- we're not given justification around Congress's action."
Beaver: "Well, it just didn't seem logical to me if the whole thing was a corridor from north south, why they would stop it halfway.
Roehrich: "So you're equating logic with Congress right now?..."
Halikowski: "There were lots of supporters, Mr. Chairman, if you recall the media coverage. It was two big cities, Phoenix and Vegas, that weren't connected. And I think that's what a lot of supporters were focused on..." (Source).
|Arizona Trade Corridor Study, 1993|
|Figure 1. From AMC's Catalyst newsletter, winter 2014|
Nevada and Arizona are nearing the end of a two-year study of plans for I-11 connecting Las Vegas and Phoenix. That project received congressional designation in 2012, and work is expected to begin soon on a highway bypass around Boulder City as an initial phase of construction...
The study, to wrap up in July, covered seven possible I-11 corridors through Nevada and recommended two for further study. Its “most favorable” route follows US 95 north from Las Vegas to Interstate 80, then west to US 395 in Reno and north into California and Oregon.
The study also recommended further analysis of a route that loosely follows the U.S. 95 corridor through the Fernley/Fallon area, than [sic] on to Oregon and Idaho through Winnemucca (Source).
"The “CANAMEX Corridor” reflects a vision for supporting the priorities of the CANAMEX Coalition while also establishing a Southwestern High Speed Rail Network. The goal of actions in this corridor is to improve mobility, promote sustainability, and preserve environmental resources. The Plan calls for strategic investments in intracontinental transportation infrastructure and technology to increase competitiveness in global trade, create jobs and maximize economic potential. It is formed by two separate travel routes connecting the international border with Sonora, Mexico, with Las Vegas, Nevada. One leg includes the route adopted in furtherance of the North American Free Trade Agreement (NAFTA). This route follows a western alignment from Nogales, Mexico, through Tucson, Arizona, around the Phoenix metropolitan area to Wickenburg, then US 93 to the Las Vegas metropolitan area. A key element of transportation enhancements in this corridor include the proposed Interstate 11 Multimodal Corridor, which has evolved to represent the ultimate high-capacity travel corridor between I-19 south of Tucson and Las Vegas and beyond. The CANAMEX Corridor definition incorporates the concept of a Western Passage of the CANAMEX trade route with a focus on improving connections between western Arizona and Mexico. This connection would take the form of a new rail corridor linking Yuma, Arizona, with a proposed mega port at Punta Colonet, Mexico. The new rail corridor would have a linkage with UPRR Sunset Route while continuing north along the Colorado River to Las Vegas, Nevada. A resolution has been prepared in support of establishing this Western Passage, and recognition from the U.S. Congress has been requested. A second potential route for new rail service in Southern Arizona has been identified as the Hassayampa Rail Corridor, which would link the UPRR Sunset Route to the Burlington Northern Santa Fe (BNSF) Railway’s “Peavine” route in Wickenburg, Arizona with a potential connection to Sonora, Mexico, through Sonoyta" (Source).A 2013 document from the Yuma Metropolitan Planning Organization discusses this CANAMEX Western Passage as thought it exists, but information on this is not readily available (check back for an update on this blog about the Western Passage).
From the “Findings of the Public/Private Sector Dialogue on the Security and Prosperity Partnership of North America” report : “High-level attention from the private sector on the importance of North American cooperation is needed to establish a positive political profile for SPP. CEO-level engagement in this process is called for, participants said, and it is necessary for the private sector to communicate not only with governments but also with the public to help build greater understanding and support for a North American agenda... Strong, private sector-led initiatives resulting in regional transportation advancements are being put in place, initiated by local actors, with local interests... Transportation, it was observed, is fertile ground for public-private partnerships, but bureaucratic obstacles to the creation of cross-border infrastructure can be prohibitive of such efforts” (my emphasis).The good news is that it is evident that they haven't completely accomplished their goals if not everyone, such as Halikowski, is on the same page. However, they have accomplished a lot. CANAMEX exists in many ways, and the pieces are slowly falling together for I-11, assuming funding becomes available. That's the other goal they're seemingly accomplishing. These public-private partnerships are increasingly being used for infrastructure such as transportation. We've already seen it with a possible Loop 202 South Mountain Freeway public-private partnership. Perhaps this is just a warm-up for such a partnership for the I-11, which could potentially even be a toll road.
|From Interstate 11 Coalition's Steve Betts' presentation to the ACA on 1/11/2012|
|Figure 2. From MAG's 12/11/2013 Expanding Border Zones Statewide presentation|
showing a different trade route along with CANAMEX
|from Scott Omer's 3/14/14 Intermountain West Corridor presentation|