The San Francisco County Transportation Authority (SFCTA) has been granted approval to initiate the bidding process for California’s first Public Private Partnership (P3) project.
Signed by the Governor of California in February 2009, the landmark Senate Bill (SB4) was passed to permit the increased use of design-build and P3 delivery methods to facilitate major infrastructure projects in the state.
This transportation project represents a significant milestone in the development of the relatively new P3 delivery model in California, and is the first in a pipeline of potential projects with total investment expected to exceed US$17bn over the next 5 years.
The recently approved P3 project involves replacing portions of the existing Doyle Drive – which serves as the southern approach to the Golden Gate Bridge – with a six-lane roadway. With construction costs estimated at just under US$1bn, bids are expected to be received this Fall with second phase construction starting in late 2011 or early 2012.
Following announcements regarding California’s new enabling legislation, Arup was invited to conduct a detailed technical and financial evaluation to determine whether the second phase of the project would benefit from adopting a P3 model. Arup developed and compared the project delivery options, concluding that a well structured and implemented P3 procurement is likely to provide the best value for money for the client and other stakeholders.
Arup is acting as lead advisor to the SFCTA for all technical, commercial and financial matters and is responsible for overseeing the procurement of the project’s second phase. Arup’s involvement in the project began in 2003. During the early stages of the project Arup developed the innovative concept for a Parkway design in collaboration with Michael Painter of landscape architecture and urban design firm, MPA Design, and supported by the San Francisco Planning + Urban Research Association (SPUR). In the next phase of the project, Arup completed the preliminary and detailed design for the 1.8-mile stretch of roadway, in joint venture with Parsons Brinkerhoff.
"Arup is uniquely placed to service P3 (PPP) projects in North America, integrating technical and financial advice for public and private sector clients" explains Arup Project Director and JV Chairman, Ignacio Barandiaran.
"Developments in the North American project finance market, and in California in particular which is the 7th largest economy in the world, present a number of opportunities for Arup to draw on an extensive global pool of experience in public private partnerships”.
Mark Harrington , Head of Project and Corporate Finance, adds "In today’s global economy, it is imperative that we deliver infrastructure projects like Presidio Parkway with the technical, commercial, strategic and financial expertise to optimize business return."
Arup’s recommendation later formed the basis for achieving project approval, enabling SFCTA to proceed with finalizing short list bid consortia and preparing RFP documentation. The legal, commercial, technical and financial terms of the transaction have been developed in collaboration with the client and its other advisors. Arup continues to advise on the overall procurement strategy, including agency funding and relationships.