How RISKY Is This??

How RISKY is This?? Buy a lottery ticket Only 3 will be sold Cost for a ticket $80 million Jackpot $2,000,000,000 Where is the RISK!!

The Program 1 lump sum contract 4 years 5 light rail lines 30 miles of infrastructure 100 vehicles $2,000,000,000 investment

Lets Talk RISK The Relationship Risk Development agreement Design/Build contract Operations & maintenance contract Financing plan

Development agreement Design/Build contract Operations & maintenance contract Financing plan Facility Provider Integrated Master Development Structure Lets Talk RISK The Relationship Risk

The Evolution RISK - Team Building Civil Engineer + Facility Provider D/B Contractor(s) Financiers + Vehicle Supplier

The Evolution RISK - Team Building Civil Engineer + Facility Provider Financiers + Vehicle Supplier O & M Contractor

Development Agreement CE & facility provider marriage Scope & definition Transparent costing Construction sequencing & schedule Utility agreements Property acquisition Risk register

RISK Register 154 Items  92 Facility provider  62 METRO / owner 35 Categories 30% - 15% Project value $460M - $250M

RISK Register Imputed risks Real (equity) risks Cost going in = Cost coming out Risk take of last resort

The Ultimate RISK METRO will not buy/own the project Availability payment  Debt service – year five (5) onward  Operating – year one (1) Avoid latent defect risks Long term business model  Long term lease Buy out in increments Buy out total  Private or public operation

The Vehicle RISK METRO takes what industry makes No specs No custom work No kidding!

Design / Build 3,000’ – 5,000’ segments one & done No change order No claims No litigation No liquidated damages Target cost pricing mechanism  Risk vs. Incentives

Would you RISK IT??