Alternative Transit Project Delivery Offers Attractive Options

Posted on March 18, 2013 by Alex Roman, Managing Editor

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Photo Courtesy DART
Photo Courtesy DART

What are some situations where alternative project delivery may be more ideal?

George Pierson (President/CEO, Parsons Brinckerhoff): Certainly, it’s best for Greenfield projects, as well as an extension off of an existing project or system where you have the ability to go out and really control the environment in which you’re working.
Where it is an upgrade to an existing line and is tied very closely into the existing system, it becomes less favorable. The reason for that is the more flexibility that one can give to the design-build contractor, the more room for innovation, cost savings and schedule savings there is.

Reffreger: There is no definition of a best project. Obviously when it’s going to be a Greenfield application, it might be easier because you are starting from scratch and don’t have any constraints or parameters that you need to fit into.

Brun-Brunet: Alternative project or procurement schemes really become relevant for projects with a total price tag of $150 million or greater. Beyond that, they can be applied to any type of project as long as the agency in question understands and accepts a few basic realities of a public private partnership as it pertains to their project.

First, the project has to be viable, and its structure should be thoroughly guided and vetted by experienced financial, legal and technical advisors.

Additionally, a public-private partnership is not a substitute for public transportation funding. It is a way to accelerate projects by leveraging some public money to attract private investment while controlling costs and guaranteeing certain performance criteria for construction, operation and maintenance of the system.

Also, private partners assume some of the risk associated with a new transportation project, but not all of it. Any risk linked to public activity, such as land acquisition, relocating utilities, changing laws or inflation, remains in the purview of the public agency or entity driving the project. In turn, the private partner or consortium assumes the risk of constructing the system on-time and on-budget, and operating and maintaining it profitably for as long as 30 years.

Finally, as with any large-scale effort to better serve the public, transportation projects need a political champion to drive them forward and build broader support throughout the community. After all, why would people ride a train they never wanted in the first place? The importance of community engagement in making these innovative transportation projects successful really cannot be understated.

What should agencies look for when choosing a partner?
Placilla: They want to look at the credentials of the company — their financial wherewithal, their performance records, the credentials of the people they are planning on putting on the job. Have they done a project like this before? Bottom line is can the company provide the bonding necessary for the project, and ultimately, can they write down a number that is competitive?

Barend: Consider if there is any ability to gather innovation through a PPP. A PPP can bring a lot more innovation than a traditional delivery, but if it’s a very simple construction project with a little design that’s needed, then there won’t be many benefits in terms of innovation. You need to consider the public policy ramifications and if there’s existing transit and maintenance already. If there’s a transit line that already exists and you’re going to expand, you have to consider what you’re going to do with your existing workforce and how you’d deal with that, if you embarked on a PPP.

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