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1 Detroit River International Crossing (DRIC) New International Trade Crossing (NITC) Briefing for the Transportation Border Working Group November 8,

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Presentation on theme: "1 Detroit River International Crossing (DRIC) New International Trade Crossing (NITC) Briefing for the Transportation Border Working Group November 8,"— Presentation transcript:

1 1 Detroit River International Crossing (DRIC) New International Trade Crossing (NITC) Briefing for the Transportation Border Working Group November 8, 2012

2 2 -1- Windsor-Detroit Trade Corridor: Critical for Canada’s Economic Security Canada’s Busiest Crossing –$126 billion of two-way surface trade – 28% of total Canada-U.S. trade –Over 220,000 jobs in the region depend on this border crossing –Consists of four crossings: Windsor-Detroit tunnel, Ambassador Bridge, truck ferry and Canadian Pacific Railway tunnel Ambassador Bridge carries a third of Canada-U.S. truck traffic

3 3 Corridor is facing capacity challenges Inadequate direct highway access (through central Windsor) and customs facilities New bridge a key priority for shippers and manufacturers Only major Ontario-U.S. crossing without significant redundant capacity for truck traffic Rationale for the Project

4 Project Location—Windsor-Detroit 4 -4- I-75

5 Negotiated a Crossing Agreement with Michigan for Canada to implement project Continuing outreach and advocacy efforts in Michigan and Washington policy Vigorously defending legal actions against DRIC Developed a legal strategy to shield DRIC from existing and future legal challenges in Canada legal Working with U.S. government to fund U.S. plaza Committed $550 million to fund Michigan project components Developing Business Case for P3 arrangement and project funding Purchasing land and undertaking utility relocation financial 5 Canada pursuing a three-pronged strategy to advance the project

6 6 Policy: Canada-Michigan Crossing Agreement, June 2012 Framework for each party’s roles and responsibilities Project funded and delivered by Canada—no cost to Michigan –US responsible for its customs plaza Buy America waiver to use only Canadian & American iron and steel Requires U.S. Presidential permit to become effective in U.S. “an investment in the future of the North American economy” —Prime Minister Harper

7 Policy: Governance Structure 7 State of Michigan (Governor) Michigan Strategic Fund Michigan DOT International Authority Government of Canada Windsor-Detroit Bridge Authority Concessionaire

8 Policy: Crossing Agreement Windsor Detroit Bridge Authority responsible for management and procurement –Responsible for delivery of project on behalf of Canada and Michigan –Conducts procurement process and enters into contractual agreement with concessionaire –Oversees construction and manages operation of the crossing –Vehicle to flow Canada’s investment to project Windsor-Detroit Bridge Authority created October 2012 –Approved by the Prime Minister – Canadian Crown corporation with 1 interim director –Complete Authority to be established in 2013 – 5 directors International Authority reflects shared governance –50/50 participation – 3 Canadian and 3 Michigan members (after Authority fully established) –Approves procurement process and final agreement 8

9 9 SECRET Legal: Bridge to Strengthen Trade Act Introduced in October 2012 as part of the Budget Implementation Act II –Exempts DRIC construction from requiring certain permits, approvals or authorizations under a number of federal laws – Clarifies corporate governance issues and provides minor amendments to the International Bridges and Tunnels Act Provides certainty to private sector bidders that the project will not be delayed or stopped by frivolous lawsuits on the Canadian side DRIC must meet all obligations under relevant federal legislation pertaining to fisheries, species at risk and navigation DRIC must comply with the commitments made in the federal environmental assessment report

10 10 Windsor-Detroit Bridge Authority Canada Canadian Port of Entry I-75 Interchange Bridge International Authority CanadaMichigan Approvals/oversight as per the Crossing Agreement Michigan Funding/Payments Provides assistance as requested by the Crossing Authority U.S. POE MI POE Financial: Procurement Structure

11 11 Financial – Timelines Budget 2007 confirmed Canada’s intention to pursue a P3 – To design, build, finance and operate new crossing system under long-term concession DRIC received environmental approvals in both Canada & U.S. in 2009 Windsor Essex Parkway construction underway, completion expected 2015 – Budget 2007 committed Canada to contribute up to 50% of eligible capital costs Property acquisition and utility relocation – Several industrial properties still to be acquired in Canada, utility relocation design beginning – No properties have been acquired in the U.S., utilities also have to be relocated Project business case being completed – Based on an investment grade traffic and revenue forecast; robust project cost estimates; and market soundings Timelines once approvals obtained and pre-procurement work completed – 18 months for actual project procurement process (Request for Qualifications - Request for Proposals - financial close) – Construction expected to take up to 5 years

12 12 Procured as part of the P3 package? Yes will be included in P3 GSA works with Transport Canada/Crossing Authority to determine specifications and funding Economies of scale Integrated construction completion Canada will require cross default provisions to ensure the delivery of the U.S. POE on a consistent timeline to avoid payment of penalties to concessionaire Canada requires a firm assurance from U.S. Government on construction and operating commitments, including staffing, and timeframes before proceeding with the project Financial: Procurement of U.S. port of entry No Independently procured by GSA

13 Confirm U.S. commitment for funding and required approvals Develop project business case –Complete U.S. due diligence –Seek approvals in Canada Complete establishment Windsor-Detroit Bridge Authority Establish International Authority Continue with property acquisition and utility relocation design in Canada Continue to manage legal risks –Vigorously defend legal and trade challenges –Passage of Bridge to Strengthen Trade Act 13 Next Steps

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