WVDOH Experience... thus far

 Public-Private Partnerships = PPP=3P = P3 ... Most folks in industry refer to them as P3, so that’s what I go with.

 A contractual agreement between a public agency and a private sector entity that allows for greater private participation in the delivery and financing of transportation projects.

Design Build Finance Operate Maintain

“ Greenfield” projects  Involve the development of new infrastructure. Most transportation P3’s are Greenfield. “ Brownfield” projects  Operate, maintain, preserve, or improve existing infrastructure. Generally limited to long-term operations and maintenance contracts or lease concessions. Blended “Greenfield- Brownfield” projects  Example: adding additional high-occupancy toll lanes to an existing highway to increase capacity

 Changing economic conditions  Delayed federal transportation reauthorization bill  Declining value of fuel taxes  Reluctance to increase fuel taxes  Growing infrastructure needs

 WV Code Chapter 17 Article 27  Went into effect July 1, 2013  Construction contracts shall be awarded to the lowest qualified responsible bidder.  Unsolicited proposals may be submitted, but the DOH has no obligation to accept or even consider them.  State Road Fund money may be used if project is >$20 million and contained in six-year plan.  Current legislation is set to expire June 30, 2017

Access to private capital Reduce costs borne by DOTs Accelerate project delivery Shift project risk Spur innovation Provide for more efficient management

 Project was to grade and drain a partially controlled access facility on new location from east of Wyoming CR 12/1 to Mullens (1.72 miles) including the Mullens Connector (1.08 miles)  Awarded to the Bizzack/TRC team on , who was the low bidder in the amount of $45.25 Million (Engineer’s Estimate was approx. $63.27 Million)

 Page 11 of the Agreement (Contract) states: “Proposer is to provide Gap Financing for this project. Gap Financing, for the purposes of this agreement, is defined as the incurrence of a temporary financial obligation on the part of the CONTRACTOR resulting from DOH’s payment period extending beyond the project completion date. Payments will be made monthly based upon the project’s CPM schedule and performance. Payments will be limited to a maximum amount of $ 1,600, per month. Payments are contingent upon satisfactory progress and will cease if project is behind schedule. Payments will resume upon reaching CPM schedule adherence in accordance with the 2010 Standard Specifications, as amended by the 2014 Supplemental Specifications.”

 Final payment will not be made until the project is deemed complete. Completion will be based on DOH acceptance of final grade, drainage structures, and sediment and erosion control features.  Completion anticipated in Fall 2017.

 Design, construct, and finance a facility on new location from WV 869 in Putnam County to CR 40 in Mason County, a distance of approximately 14.6 miles  Grade and drain only.  The Bizzack/TRC team was again the low bidder at $ Million.  Monthly payments are in the amount of $4.9 Million.  Payment period of approximately 3 years

 Corridor H section 1 from Kerens to the US 219 connector – scheduled for October 20, 2015 letting. Anticipated payout will be $4.5 M/month  Wellsburg Bridge  Corridor H sections 2 & 3  Building & Grounds Project (New County Headquarters at 7 facilities; 2 new Substations)

 Long-term concessions can improve asset management-the same party that constructs the project is responsible for long- term operation. This creates incentives to build a higher quality facility that is easier to maintain.

 P3s can be valuable options for states seeking innovative approaches and funding to repair existing and build new infrastructure projects. However, they are only one piece of the funding puzzle. They are best suited to large scale projects that have ongoing maintenance needs.

P3s can offer alternative project delivery methods or financing mechanisms, but in the long term do not provide new money for infrastructure. Revenues to repay the private investment must come from the same source of public financing: tolls, fees, or taxes.

 If the private sector provides financing, it will need to cover costs and also make a return on its investment, either from a revenue generated by the facility (such as tolls) or from public sector compensation.

P3 Defined Detailed description of the graphic P3 Options fall into three categories; options fall along a continuum from Public Responsibility to Private Responsibility. New Build Facilities (Private Contract Fee Services, Design Build, Design Build Operate Maintain, Design Build Finance, and Design Build Finance Operate Maintain Concession) and Existing Facilities (OM Concession, Long Term Lease). Public-private partnerships (P3s) are contractual agreements formed between a public agency and a private sector entity that allow for greater private sector participation in the delivery and financing of transportation projects. This section of the FHWA P3 website identifies and defines some of the more common types of P3 arrangements. There are many different P3 structures, and the degree to which the private sector assumes responsibility - including financial risk - differs from one application to another. Additionally, different types of P3s lend themselves to the development of new facilities and others to the operation or expansion of existing assets. These relationships are depicted in the diagram above. Select any P3 option from the diagram to learn about distribution of roles and responsibilities between the public and private sectors for that specific P3 option.