Stop CANAMEX, Stop the Intermountain West Corridor and I-11! Stop the Sun Corridor! Stop the 202!

Thursday, July 31, 2014

Loop 202 P3 Update

For an updated exploration on the public-private partnership for the South Mountain Freeway, see "Freeway Could Take a Toll on Arizona" posted February 2016. 

ADOT posted the following on their website:
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.

See also: 8/12/14: Loop 202 Extension Public-Private Partnership: a primer
and older updates:
Loop 202 Public-Private Partnership Rejected but Another P3 a possibility
Companies seek partnership with ADOT to profit on freeway, Part1: The Networks
Companies seek partnership with ADOT to profit on freeway, Part 2: The Methods

Friday, July 4, 2014

Privatized Roads, Privatized Water

You might not think Interstate 11 has anything to do with water privatization, but it does. Considering our water shortages, we should be worried.

Pushes for water privatization cannot be separated from the increased move towards public-private partnerships (P3 or PPP) for infrastructure projects--especially when both consultants for the I-11 study are steeped in P3s in transportation and water.
2014 618 priv st
Image: Denis Bocquet / Flickr

This is not to imply that these consultants, CH2MHILL and AECOM, are involved with Interstate 11 because they also want to privatize our water (although it's possible). But the depth of their involvement in water privatization and P3s in general shows a likelihood that I-11, or parts of it, is intended to be a P3. The more experience Arizona has with P3s, the easier it will be to implement various projects including water. Water is privatized in many other countries, often due to conditions for loans by the World Bank, a tendency seen with structural adjustment programs. P3 arrangements make it more likely that the private side will call the shots. We might get a road we don't even want, just because some companies can make some money. And we may end up with a bigger water problem.

Obama made water privatization in the US easier, when on June 13 of this year, he signed the Water Resources Reform and Development Act (WRRDA) into law. This included the Water Infrastructure Finance and Innovation Authority (WIFIA) which is a 5-year pilot program providing financing for P3s for water projects.

WIFIA, mirroring the "Transportation Infrastructure Finance and Innovation Act" (TIFIA), was a concept developed and promoted by the American Water Works Association (AWWA). What does this have to do with the I-11 Study consultants? AWWA, a non-profit, is supported by CH2MHILL and closely affiliated with AECOM. AECOM Senior Consultant Jim Chaffee was president of the AWWA until very recently.

There is no doubt that both consultants are immersed in the world of infrastructure P3 promotion. CH2MHILL supports The National Council for Public-Private Partnerships and has a couple members on the steering committee of the NCPPP's Water Institute. The Senior Vice President of the investment arm of AECOM, Samara Barend's testimony to congress back in May was meant to encourage federal facilitation of P3s on a larger scale. 

AECOM put out the white paper, Fostering a Larger Private-Sector Role in United States Infrastructure in which their number one recommendation in the executive summary reads, "Expand the use of PPPs for surface transportation projects. This can be achieved by extend [sic] the successful TIFIA and [Private Activity Bond (PAB)] programs before they expire in 2015." Their second recommendation includes, "Pass the proposed 'WIFIA' pilot program to provide long-term, flexible low-interest subordinated debt financing terms to water utilities...
Enable the WIFIA program funds to be partnered with PABs, as has proven successful with TIFIA."

TIFIA loans and availability payments, and possibly tax-exempt PABs, are being considered for I-11, especially since collection of tolls on the future Interstate 11 would be controversial, even while concessions are still an option. You can listen to AECOM's Samara Barend, brimming with enthusiasm, break down different types of P3s and the financing options in the video Public-Private Partnerships: Lipinski Symposium On Transportation Policy & Strategy.

A previous post on this blog, Companies seek partnership with ADOT to profit on freeway, Part 2: The Methods, explains the draw these options have for companies seeking to make money off of infrastructure projects. These and more are listed as options in the I-11 Study draft Implementation Report.

As Ellin Dannin of Truthout pointed out, with programs like TIFIA and WIFIA, "rather than the private partner coming to the rescue of cash-strapped governments, it is the public that must subsidize private contractors."

ADOT just released a Request for Information regarding its Statewide Assets, on July 2 as part of their Public Private Partnership Initiative. Since ADOT has several projects on the table, this step allows them to feel out the industry's interest before putting out a Request for Proposals, either for the Loop 202 South Mountain Freeway, the Interstate 11, a North-South corridor, SR 189, or other projects listed on their website.

While P3s are often framed as a better option for the public sector to accomplish their goals with their limited resources, in that they can leverage their assets, P3s are widely promoted by large companies who seek to make money. Construction companies, engineering firms, consultants, and banks all see dollar signs in these projects, and they host conferences and make other efforts to reach out to local officials to steer them in that direction. For example, JP Morgan, Morgan Stanley, and Goldman Sachs are involved with P3 conferences like the National P3 Symposium. Both AECOM and CH2MHill are sponsors and attendees of the ARTBA P3s in Transportation Conference and the 2015 Global Water Summit who uses the phrase "the water value revolution" and whose website is

Many such companies worry about their fate if the economy doesn't allow for governments to implement as many infrastructure projects. For example, Goldman Sachs listed AECOM as one of the companies that would go under if government spending was severely limited, considering that AECOM has 62% sales exposure to government. Their survival largely hinges on access to P3 deals. No wonder they're pushing the idea.

They have already made some money from the the I-11 Study which cost approximately 2.5 million dollars. While it would likely be a conflict of interest for either consultant to get a Design-Build, etc. deal on I-11, their interest in P3s remain. Corporate Accountability International warns that private water companies often get a foot hold on further water privatization deals by entering into consultation partnerships first.

An interesting fact is that Mike Kies, the ADOT project director for the I-11 Study has worked for AECOM. He worked for AECOM on the Arizona Rail Framework Study and the State Rail Plan. He was an AECOM project consultant on an ADOT project to make I-10 5 lanes each way from Tangerine Road to I-8. The article on this project stated, "An improved I-10 can 'support the objectives of the CANAMEX trade corridor, which includes this important segment of I-10,' literature indicates. The CANAMEX corridor presumes greater traffic between Mexico and Canada through the U.S. I-10 is 'not only an important east-west freight route,' but decision-makers 'expect freight movements to increase north and south.'"

Also interesting is that John McNamara of AECOM, then of BRW, Inc., was involved back in 1993 on an Arizona Trade Corridor Study, which is one of the earlist references to CANAMEX.

The Arizona Transportation and Trade Corridor Alliance (TTCA), which "encompasses the former CANAMEX Task Force" just released their Strategic Roadmap, which primarily promotes trade corridors through Arizona, and P3s, with an emphasis on encouraging an effort to get local policy makers and others to understand the "benefits" of trade infrastructure and private involvement in financing. The TTCA was started in 2012, bringing together the public and private sector, including Jim Kolbe, CANAMEX expert of the Arizona Mexico Commission (AMC). This sort of public-private partnership unit allows private interests to influence policy behind closed doors.

From "Scientists on where to be in the 21st century based on sustainability"
Trade and transportation infrastructure of the scale intended by organizations like the AMC/TTCA would require massive amounts of natural resources including water. In addition, the more roads, the more traffic, the more sprawl, the more pollution and use of resources. It's an endless cycle. At the June 25 I-11 in the Phoenix area, Franco Habre asked, "With the current and looming water shortages shouldn't we be applying a moratorium on proposed infrastructure projects?" to which ADOT's Mike Kies responded that it's not his job to be concerned about water. Those whose job it is to be concerned about water, such as the Arizona Department of Water Resources, toured Arizona stating that water desalination is a likely necessity a few years from now. The desalination would likely occur in Mexico or California and be transported to Arizona.

AMC is already moving forward on this, and just announced that,
"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?

AMC's interest in water may also have something to do with their relationship with Freeport McMoran, one of their biggest sponsors who's also had someone on their board for several years. Freeport is responsible for massive pollution and human rights violations, particularly in West Papua. In January, Freeport hired the previous director of the Arizona Department of Water Resources as their director of water strategy. And while Freeport has been key in changing Arizona water legislation to be in their favor, they might be worrying that Arizona will mandate that mines use desalinated water as Chile, another location of Freeport's mines, has recently done. Even if Freeport is not worried about being required to use desalinated water, they may be looking ahead to when they've used all other options, having bought up farm land for their water rights and swindling native water rights from various tribes. It may also be significant that Michael J. Lacey, Director of Arizona Department of Water Resources is co-chair of AMC's Environment and Water committee.

The AMC and the World Bank, are interested in opening up public services to market forces, and businesses want to make money off of these deals. Private water companies across the world have experienced resistance to their plans. They therefore know they have to frame their project in a way that is more acceptable to people, such as a public-private partnership leveraging the assets of the municipal government, despite many of the pro-P3 arguments being false. And what is a worse to privatize than a basic need which is a finite resource? Privatizing water means poor people go without it, and conservation is counter to the profit-interest of companies.

With all these plans for transportation infrastructure, water is an issue even if it's not privatized. The more development, the more pollution and wasting of water. They may try to sell their projects as "green" or "sustainable" but increased growth in this region is not sustainable. Additionally, private or not, desalinated water will cost more. We need to halt development and many of the wasteful industrial projects such as the Freeport McMoran mines.

Wednesday, July 2, 2014

Phoenix I-11 Meeting Report-back

It becomes apparent, attending public meetings about infrastructure such as the future Interstate 11, that the interest is primarily in just being able to say they allowed forums for public input. During the Q & A portion of the public meeting about I-11 in Phoenix on June 25, ADOT's Mike Kies showed his skill in answering questions without actually answering them.

While some of the questions were about the likelihood and timing of specific routes, these questions could not be answered. It was reiterated that the purpose of the meeting was for public feedback on the potential routes--that no specific route had been determined.

Many of the questions could've been answered but we can assume that very few were satisfied with the answers. One question was about how the I-11 relates to the NAFTA highway. Kies essentially said that there is nothing called the NAFTA highway, and that most likely the question was about CANAMEX, but there was no adequate description of the relationship between the I-11 and CANAMEX.

Another question was about the relationship between the I-11 Study consultants and banks and construction companies that could make money off the trade corridor and/or public-private partnerships. Even though these relationships exist and consultants are making money right now, Kies said this question could not be answered yet, probably referring to the fact that there are no specific construction companies contracted at this time. However, it is clear that consultants do have these relationships.

There were a couple questions about a port in Mexico that has been referenced as a potential key part of I-11. Kies stated that this port is not part of I-11. He didn't acknowledge that the Corridor Justification Report mentions the expansion of the Port of Guaymas which is the southern point of the CANAMEX Corridor. While the port may not be part of I-11, there is certainly a relationship and a plan.

Someone asked if, considering the looming water shortage, there should a moratorium on infrastructure projects. Kies seemed to get a little tongue-tied about that question, but essentially said "it's not my job to worry about water." He stated that ADOT's focus is on transportation and they get data from demographers on projected population of the area which they then plan for.

There was a question about border security and it's relationship to I-11 and something about whether MAP-21 was part of AGENDA-21.

A couple questions were answered. One was about the potential of the use of immenent domain to acquire lands for I-11. This is a possibility. Another question was whether pipelines could be part of this multi-modal project and Kies said that there is that potential.

The Q & A period involved writing questions on cards and having them read aloud by a facilitator. It seems this might partly be an attempt to keep critics of the project from becoming acquainted. If the questions are anonymous, people can't get together afterwards to join forces.

A virtual meeting continues until July 18. Post your comments.