Road building model less traveled dubbed quick fix to congestion

							Road-building model less traveled dubbed quick fix to congestion
North Tampa East-West project proposed, eight firms interested
Tampa Bay Business Journal - August 4, 2006 by Agustina Guerrero Staff Writer

The proposed beltway around Tampa Bay is not the only project that's keeping the
Tampa-Hillsborough Expressway Authority busy these days. The Expressway Authority
also has launched an RFP for the North Tampa East-West Road project, a development
that could become the first of its kind in Florida.

The RFP calls for a public/private partnership, known as a P3 model, a type of
collaboration that has proven successful in road projects in Europe, South America and
Australia but has yet to gain traction in the United States.

In the model, a concessionaire or developer provides the money and builds, maintains
and operates it as a toll road, and after the agreement is over returns it in good condition
to the Expressway Authority. The concession is for more than 40 years, but the winning
group will be able to negotiate the exact duration of the concession and how much the
concessionaire will charge users, said Steven A. Anderson, an attorney with Ruden
McClosky in Tampa, general counsel to the Expressway Authority.

A workshop to explain the proposal attracted eight international players: Granite
Construction, AECOM Enterprises, Atlantic Capital, Plenary Group/PLC, Skanska,
Ferrovial/Cintra, RBC/RBC Capital Markets and Macquarie Bank. Bids are due Sept. 14,
and at least three of the firms are expected to present offers, said Ralph C. Mervine,
executive director of the Expressway Authority.

The 3.1-mile road that will run from Commerce Park Boulevard westerly to Interstate
275 has an initial estimated cost of $150 million and could take up to two years to be
built.

Some engineering and revenue studies still need to be done, and a contract won't be fully
negotiated for six to eight months, Anderson said. Construction is set to begin next year.

Needs exceed resources
Just seven P3 projects have been built in the United States so far and none are in Florida.
But the transportation needs here are growing faster than the funds available, making P3
projects a suitable solution, Mervine said.

The Florida Department of Transportation estimates a funding shortfall of $23 billion for
the next 10 years. "And that's just to maintain the current transportation conditions," said
Douglas J. Callaway, president of Tallahassee-based Floridians for Better Transportation.

With the population in Florida growing at 2 percent a year and the vehicle miles traveled
(the measure for how heavily a highway is used) increasing at 5 percent annually, it's
easy to predict the perfect storm ahead, Callaway said.

"People are driving more and more. We need more money for transportation to keep
Florida moving," he said. "Toll roads are one of the options, and an attractive one."
The Expressway Authority chose this project to break into the P3 arena because it is "a
relatively small project, not overly complicated or expensive, but very much needed by
residents of North Tampa," Anderson said.

"It needs to be built but no one has it in their construction budget for the foreseeable
future, so the P3 concept is perfect," he said. "Otherwise it wouldn't have commenced for
10 to 15 years."

The road would have always been built as a toll road, he said, whether funded by the
Expressway Authority or not.

Building confidence
One of the challenges is to get the public and private sectors to have an open mind and
work together for a win-win situation so that both can benefit, said Jack Finn, senior VP
and national director of toll services at engineering firm HNTB, the general consultant for
the Expressway Authority.

But transportation authorities and private companies around the country seem to be
getting the idea.

"We are seeing a lot more activity than we saw 10 years ago. It is starting to snowball,"
Finn said.

For those who worry about a private company in charge of a public road, Callaway
offered this piece of advice: "The private sector has probably a closer connection between
customer service and continuing to get their paycheck," he said.

Similar projects in Florida
There are two projects in Florida similar to the Tampa-Hillsborough Expressway
Authority's P3 proposal. But the one in Tampa is the only one in which repayments
would be based on a revenue stream from the tolls paid by users.

The addition of lanes to Interstate 75 in Fort Myers relies on a public/private partnership
model. But the private sector will build the lanes, and the Department of Transportation is
expected to repay it in five years.

A Port of Miami tunnel project also requires private investment for its construction, but
the government will make annual payments, as well.

agguerrero@bizjournals.com | 813.342.2463