Transcript Northwest Corridor Project

Northwest Corridor Project
AUGUST 11, 2014
Darryl D. VanMeter, P.E.
State Innovative Delivery Engineer
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Project Overview
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Project Overview
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Project length of 29.7 miles
•
Utilizes Public Private Partnership (P3)
delivery
•
Design-Build-Finance (DBF) contract of
$598.5M
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Begins at Akers Mill Road and
terminates at Hickory Grove Road on
I-75 and Sixes Road on I-575
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Two (2) reversible barrier separated
express lanes along the west side of I-75
from I-285 to I-575/I-75 interchange
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One (1) reversible barrier separated
express lane in the median on both I-75
and I-575 from the I-75/I-575
interchange
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Southbound operations in morning and reverses to northbound operations in evening
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Six (6) express lane interchanges on I-75; three (3) slip ramp locations on I-575
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Dynamic tolls manage volumes in express lanes
Northwest Corridor Project Rendering
Barrier separated express lanes on I-75 south of the I-575 and I-75 interchange
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Northwest Corridor Project Rendering
Barrier gate to enter the Northwest Corridor (NWC) express lanes at Roswell Road
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Northwest Corridor Project Rendering
Northbound slip ramp to enter NWC express lanes
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Project Benefits
• Increased travel options between general purpose and express
lanes
• Reliable trip times - travel time savings to range from 5.4 to 43.5
minutes, depending on the trip segment and travel direction*
• Supports transit service and expansion - transit buses and
registered vanpools travel free in the express lanes allowing
customers to enjoy the benefits of the express lanes without
paying anything beyond the normal transit fare
• Supports economic growth by improving access to jobs and
attracting new businesses to the region and state
* Compared to the No-Build Alternative for 2018
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Project Status
• Private sector partner, also known as Developer, is Northwest
Express Roadbuilders (NWER) a joint venture of Archer
Western and Hubbard Construction
• Project contract with NWER was executed in November 2013
• Design and pre-construction activities underway
• Construction expected to begin in summer/fall of 2014
• Project anticipated to open to traffic in summer of 2018
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Innovative Project Delivery
Delivery Options Considered
• Public-Financed Design-Bid-Build
• Public-Financed Design-Build
• Public Private Partnership (P3) Design-Build-Finance
(DBF)
• P3 Design-Build-Operate-Maintain
• P3 Design-Build-Finance-Operate-Maintain
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Innovative Project Delivery
Evaluation Factors
• Project cost
• Open to traffic
• Number of contracts
• Price and date certainty of delivery
• Potential benefits from private section innovation
• Transportation Infrastructure Finance and Innovation Act
(TIFIA) credit worthiness
• Lifecycle optimization
• Private sector term of commitment
• Risk allocation to State and Developer
• Toll rate control after open to traffic
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Innovative Project Delivery
P3 Design-Build-Finance Selected
• Provided shortest time for FHWA environmental approval
• Included single contract approach
o Avoided coordination risk on GDOT
o Maximized innovation
o Least cost for overall project management and overhead
• Allowed for design-construction innovation and cost savings via
implementation of Alternative Technical Concepts (ATCs)
• Maximize cost and risk sharing
• State maintains control to set toll rate
• Developer financing – Allows flexibility in GDOT program
finances and delay debt issuance
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Innovative Project Delivery
• First P3 DBF project for GDOT
• Sophisticated procurement required technical, legal, and
financial expertise in P3
• Enhanced collaboration with industry to ensure
procurement transparency and contract clarity
o Proposers reviewed draft DBF documents
o Extensive one-on-one meetings with each proposer
• Procurement goals
o Keep construction cost low by inviting innovations
o Select the “right” team
o Let procurement work for GDOT
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Innovative Project Delivery
• Technical Advisor – Magnitude of project and innovation placed
additional challenges on overall decision making requiring
collaboration of multiple GDOT Divisions with Technical Advisor
to obtain technical recommendations and develop technical
contract documents
• Legal Advisor – Typically provided internally, however
development of new DBF contract and extent of potential risk
required outside experience from a firm with previous P3
experience
• Financial Advisor – GDOT’s first privately funded project
prompted retaining of a financial firm with expertise in P3
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Project Procurement
• Alternative Technical Concept (ATC) process – Confidential process that
allowed for innovations and project savings (ATCs are proposer
requested deviations from contract requirements)
• Developer financing at 10% of design-build-finance contract cost
• Design-build approach reduced utility relocation costs
• GDOT initiated ROW activities during procurement phase to accelerate
start of construction
• First use of a web-based project management system – Design submittal
review, contract change request, monthly invoice review, noncompliance
management, construction document review, etc.
• Use of TIFIA Loan
• Best value selection – Based on a combination of the price and
evaluation criteria
• Payment for Work Product
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Project Procurement
Alternative Technical Concepts (ATCs)
• Developed State’s first web-based ATC process
• Three teams submitted 146 ATCs during process leading up to final
proposal submission
• Process included incentives for revenue generation and enhanced
operation since long-term maintenance of the Northwest Corridor
project was under State control
• Total estimated savings from ATC process reduced the project cost
by an estimate of $60 million
• Further reductions were realized through negotiation of
unsuccessful proposers’ ATCs into final contract with NWER
• GDOT shared schedule risk to further enhance innovations
without penalizing Developer
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Project Procurement
Payment for Work Product
• Non-selected proposers (2) received a payment of $1.5M
each for their ATCs – Proposers’ choice
• Encouraged competition by generating market interest
• Encouraged proposers to expend the time, money, and
resources to provide creative and innovative solutions
• Provided proposers compensation in exchange for innovative
ideas (ATCs) included in their proposals
• Demonstrated State’s commitment to the project
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Design-Build Phase
• Considered a “Major” Project by
Federal Highway Administration
(FHWA) – Projects with Federal
financial assistance with an estimated
total cost of $500M or more
• Required to satisfy FHWA Major
Project requirements – Annual
Financial Plan and Project
Management Plan
• GDOT and State Road and Tollway
Authority (SRTA) share project delivery
responsibilities
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Design-Build Phase
Design Overview
• Typical GDOT project provides all design reviews internally with no
consultant assistance
• GDOT retained a Submittal Review Consultant who is providing
subject matter experts for review of design submittals in all
disciplines of design
• Review times specified by contract
• Submittal process conducted via a web-based project management
program to provide accountability and decrease review times by
prescribing exact review period for each step of the review process
• Coordination and communication between design-build team and
Submittal Review Consultant SMEs to minimized “surprises” for both
sides
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Design-Build Phase
Construction Overview
• Typical GDOT day to day construction management provided by GDOT
Division of Construction via either internal staff or consultants know as
construction engineering and inspection (CEI)
• NWC GDOT Project Manager responsible for day to day management
during construction
• Design-build team required by contract to retain its own CEI services – First
ever in GDOT history
• Design-build team CEI performs quality control and quality assurance
activities including materials testing and inspection
• Owner’s Construction Engineering and Inspection (OCEI) Consultant
responsible for construction quality oversight – Quality assurance to ensure
design-build team CEI is performing to contract requirements
• GDOT Division of Construction provides limited construction oversight
responsibilities known as independent assurance
• FHWA approval required for project Quality Assurance Plan
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Project Management Structure
GDOT
• Procurement
• Project Management
(Design-Build Phase)
• Long Term RoadwayRelated Operations and
Maintenance (O&M) and
Renewal and Replacement
(R&R) Costs
• Financial Backstop of
Tolling O&M and R&R
Costs
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• Intergovernmental
Agreements
• Memorandum of
Understanding
(“MOU”)
• Estate for Years
(Ground Lease) for
Life of the Project
• Design-BuildFinance Agreement
• TIFIA Application
SRTA
• Toll Rate Management
• Toll Collection and
Enforcement
• Customer Service Center
Operations
• Toll Revenue Bonds
• TIFIA Borrower
Project Financial
SOURCES OF FUNDS
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AMOUNT
GDOT Transportation Improvement Program
$
265,879,855
Motor Fuel
$
232,938,325
Private Sector Financing / Developer Financing
$
59,853,386
TIFIA Loan
$
275,000,000
TOTAL SOURCES OF FUNDS $
833,671,566
Project Financial
USE OF FUNDS
Design-Build-Finance Costs
$
Preliminary Engineering
$
Right of Way
$
Prior Preliminary Engineer Costs
$
GDOT Agency Costs
$
Project Contingencies
$
TOTAL PROJECT COSTS $
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AMOUNT
598,533,817
35,000,000
26,000,000
37,033,872
113,976,612
23,127,265
833,671,566
Project Financial
• DBF Contract with Developer for an amount of
$598,533,817 for design and construction of project
• Developer provided financing is $59,853,386 (10% of DBF
Contract)
• Repayment of 50% to Developer begins upon Substantial
Completion
• Final repayment of 50% to Developer is anticipated upon
project Final Acceptance
• Provides incentive for Developer to complete all punch list
items
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Project Financial
Developer Financing
• Developer provided basis of financial contribution timing and
amount with proposal
• 10% of Developer financing made on monthly basis –
Included as part of monthly payment requests
• Amount of monthly Developer financing update at beginning
of every fiscal year
• Developer financing required to be fully funded no later than
one year (12 months) prior to Substantial Completion
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Project Financial
Monthly Payment Requests
• Monthly payments to Developer based on progress during designbuild phase
• Total payment requests for each fiscal year cannot exceed maximum
available public fund – No monthly maximum established
• Payment requests are reviewed and verified for completion of work
• Amount of monthly Developer financing included on payment
requests also verified
• Monthly progress payments managed by GDOT and SRTA
• Looking for compliance with DBF contract invoice by invoice
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Conclusion
• The Northwest Corridor project is vital to the State of Georgia because it
will help reduce congestion, provide more reliable travel times, and help
improve air quality in a heavily travelled region
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Northwest corridor project will continue the vibrant economic
development in the area and will enhance the quality of life for
residents of Cobb County and students of Kennesaw State University
• Largest toll project in State’s history lead to unique challenges
• Model for future large managed lane project
• Emphasis on innovation
• Approximately 10 years to obtain environmental approval and 4 ½ years
for design and construction of project
• Overall project implementation period of 15 years – Challenges resulting
from changes in State leadership
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Questions
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Questions & Answers
Contact:
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Darryl D. VanMeter, P.E.
State Innovative Delivery Engineer
Georgia Department of Transportation
One Georgia Center
600 West Peachtree Street
Atlanta, Georgia 30308
Telephone: (404) 631-1703
Email: [email protected]