Rail

Chicago Transit approved to pursue PPPs

Posted on February 9, 2012

The Chicago Transit Authority (CTA) was approved to engage financial advisors to pursue innovative, alternative financing options to invest in transit projects in the coming years.
 
With more than $5 billion in capital needs envisioned for the Red Line, CTA is taking steps to explore a range of opportunities for revenue, investment and financing, including public-private partnerships that would reduce reliance on traditional funding sources, officials said.
 
“Traditional federal, state and local funding sources are uncertain, and may be insufficient to meet our needs within the next several years,” said CTA President Forrest Claypool. “This agreement will allow the CTA to pursue innovative ideas and possible new funding sources to complete some of the important projects we have planned.”
 
Among those projects are the modernization of the Red and Purple Lines north of Belmont (known as Red-Purple Modernization, or RPM) and an extension of the Red Line from 95th Street terminal south to 130th Street.
 
Public-private partnerships, or P3, could entail transit-oriented development, new non-farebox revenue sources and other ways to capture real-estate value created by the Red Line.
 
In the first year of the four-year agreement, the financial advisors will not be paid, as they complete an intensive due diligence process to assess how P3 approaches could add value and/or reduce costs for Red Line projects.
 
The lead financial advisor would be Goldman Sachs, supported by two co-financial advisors — Chicago-based Loop Capital Markets LLC and Estrada Hinojosa & Co.
 
They will be paid a monthly fee in the remaining years, as well as small percentage of any successful transactions. The advisors were chosen through a professional services agreement, and their selection was based on their industry expertise and strong experience with P3s, transit finance and municipal financing.
 
Public-private partnerships have helped improve transit and transportation systems across the country and throughout the world. Notable examples of P3s for transit include the Canada Line in Vancouver and the Docklands Light Railway in London.
 
In the U.S., a key precedent for such deals is the Denver RTD Eagle P3, a $2 billion new commuter rail project currently under construction. The project represents the first transit public-private partnership in the country in which a private consortium will design, build, finance, operate and maintain a new transit line in return for payments from the public agency based upon performance. The Eagle P3 project is being recognized nationally as a model for efficient transit project delivery, cost control and risk transfer.
 
Financial Advisor Fees
The first year of these agreements is free. CTA can terminate the agreements before starting to incur fees if we don’t think there are viable P3 opportunities to pursue further. Only if CTA decides to proceed past the first year of work will retainer fees be paid.

View comments or post a comment on this story. (0 Comments)

More News

Apple to introduce transit maps to iOS9

The directions would offer the ability to plan trips, getting estimated travel times for bus, train and subway transit methods.

NJ TRANSIT refutes report that its trains break speed regulations

CBS went to Secaucus Junction, a major rail hub, and the South Orange station armed with a speedometer app and a radar gun to clock trains as they passed through the stations, with a couple of trains traveling in excess of the 60 mph recommended for trains passing through stations.

San Francisco completes Central Subway tunnel portal entrance

The identical twin TBMs weighed-in at 750 tons each and were affectionately named Mom Chung — for Dr. Margaret “Mom” Chung, the nation’s first Chinese-American physician — and Big Alma — for San Francisco philanthropist and socialist “Big Alma” de Bretteville Spreckles.

House passes short-term extension of MAP-21

The Highway and Transportation Funding Act of 2015, sponsored by House Transportation and Infrastructure Chairman Bill Shuster (R-PA) and House Ways and Means Chairman Paul Ryan (R-WI), passed by a vote of 387 – 35 – 1.

Virginia Railway, GlobeSherpa rolling out new mobile app

The app, developed by GlobeSherpa, has an animated screen, with an image of the Washington, D.C., skyline and a constantly moving VRE train. The moving image serves as a security measure to keep hackers from using screen shots to mimic the app.

See More News

Post a Comment

Post Comment

Comments (0)

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The resource for managers of class 1-7 truck Fleets

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

LCT Magazine

Global Resource For Limousine and Bus Transportation

Please sign in or register to .    Close