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2. Virginia’s Public-Private Transportation Act (PPTA) Northern Border Finance Workshop December 11, 2006 Thomas W. Pelnik III, P.E. Director, Innovative Project Delivery Division

3. 3 Route 895 PPTA 2002

4. 4 Overview Public-Private Transportation Act –Law and Policy –Program Status –Current Route 460 Project –Practical Issues and Lessons Learned

5. 5 Background Virginia PPTA, §56-556 … Broadly stated legislative authority Policy: –Public need for timely development –Traditional methods may not be adequate –P3 may be more timely or effective –Encourage private investment

6. 6 PPTA Overview 10 years old (enacted 1995) Substantive revisions to law during 2005 GA session (Chapters 504 & 562) from lessons learned

7. 7 PPTA 2005 – What Changed? § 56-566.1, and § 56-573.1 Interim Agreements § 56-560 C (2), and § 56-563 B The proposal …will address the needs identified in the appropriate state, regional, or local transportation plan by improving safety, reducing congestion, increasing capacity, and/or enhancing economic efficiency § 56-558.C and § 56-573.1.2 Emphasis on private investment, risk sharing and an increase in funding § 56-573.1 (2) Revise the state guidelines to conform with the act no later than October 31, 2005

8. 8 Guideline Goals and Principles Address the needs identified by Appropriate State, Regional or Local Policies and Plans Multimodal Solutions NEPA Promote private investment, risk sharing and an increase in funding

9. 9 Guideline Goals and Principles (cont’d) Transparency and Accountability –Public Participation –Limited Confidential Information –Limited Advocacy Encourage Competition for Private Sector Innovation and Investment –Stable Investment Climate –Limit State-Supported Debt –Disclose Public Financial Commitments

10. 10 Guidelines - Process 2005 Process: 1.Quality Control –Public Notice 2.Independent Review Panel 3.Oversight Board (CTB) 4.Submission and Selection of Detailed Proposals 5.Negotiations 6.Interim or Comprehensive Agreement (Commissioner’s Decision)

11. 11 Oversight Board Checks and Balances PPTA –Phase 3 Oversight Board Recommendation –Phase 6 Presentation to Oversight Board Rationale for decision Major business points Project Development –Funding allocations –Location studies

12. 12 Public Involvement PPTA –Phase 1 Quality Control Public notice –Phase 2 Independent Review Panel Public comments Local government comments Project Development –SYP meetings –State, regional or local transportation plans –NEPA Process

13. 13 Guidelines - Schedule 1.Quality Control 5 to 6 months (m) [Proposal meets requirements of Act 1 m] [Public Notice3 to 4 m] [QC Review1 m] 2.Independent Review Panel [goal]5 to 8 m [Assemble Panel and schedule meetings 1 to 2 m] [Panel meetings4 to 6 m] 3.Oversight Board 2 m 4.Submission and Selection of Detailed Proposals [goal]6 to 10 m [RFDP1.5m] 5.Negotiations[goal]2 to 6 m 6.Review and Sign Interim Agreement or Comprehensive Agreement 1 m Schedule goals contingent on project complexity and private sector objectives

14. 14 PPTA Program Status Summary of VDOT’s PPTA Portfolio Value of all 11 Contracts= +$5 Billion Completed 5 Contracts = $767 Million Value of 6 Active Contracts = +$4 Billion Value of projects in development = +$3 Billion

15. 15 ProjectContract Value in Millions Date Signed VMS – Interstate Maintenance$132December 1996 Route 895$ 324June 1998 Route 288$ 236December 2000 VMS – R (Renewed)$ 162June 2001 Coalfields Expressway$ 2,500January 2002/06 Route 28$ 321September 2002 Route 199$ 32October 2002 Route 58$ 20December 2003 Dulles Rail Phase 1 (DRPT)$1,8002004 I- 495 HOT Lanes$ 900April 2005 Route 895 Concession$ 520June 2006 I-95/395 HOT Lanes$ 913October 2006 Total Value$ 5,540**(not including 895 Concession and DRTP) PPTA Contracts

16. PPTA Program Status

17. 17 Project Description Proposals Procurement Schedule Route 460 PPTA Topics of Discussion

18. 18 Route 460 PPTA 55 miles of new highway along U.S. Route 460 Corridor from the existing I-295 interchange in Prince George County to a new interchange with U.S. Route 58 along the Suffolk Bypass. The typical section is a 4- lane divided, limited access highway on new location. NEPA ROD Anticipated by Spring 2007 Project Description

19. 19 Route 460 PPTA Proposal Teams –Virginia Corridor Partners (VCP) –Itinere –Cintra 460 Conceptual Proposals Submitted September 14, 2006

20. 20 Route 460 PPTA Base Proposal: Range of Total Design-Build Price is $1,051 million to $1,550 million. Public Funds include Private Activity Bonds, TIFIA loans, Federal and State Appropriations and/or Allocations, etc. Range of Public Funds needed to make the project financially feasible is $624 million to $2,068 million. Range of Tolls is consistent with the Route 460 Toll Feasibility Study. Proposal Ranges

21. 21 Route 460 PPTA Procurement Schedule RFPFebruary 06 Proposals submittedSeptember 06 QC Review submitted to Secretary October 06 –Proposals are in accordance with PPTA Law PPTA Guidelines Solicitation for Proposals (SFP) Secretary Appoints Independent Review PanelNovember 06 Local Jurisdiction Comments DueDecember 06 Independent Review Panel RecommendationApril 07 CTB ResolutionJune 07 Solicit for Detailed ProposalsJuly 07 Detailed Proposals DueJanuary 08 Interim or Comprehensive AgreementJune 08

22. 22 Practical issues P3 program implementation –Resources –Impact on agency –Policies and procedures System operations –Impact on existing system –Performance standards –Toll rates

23. 23 Lessons Learned –Set clear policy goals –Establish a business process Solicit proposals - know what you want Each agreement will establish precedents Require at-risk and equity participation Ensure process results in a contract DBFOM v DB – long term view –Provide adequate resources - Requires significant time investment of senior staff VDOT established two new divisions in 2003 –P3 is not for every project – but it can be an important part of program

24. 24 VDOT’s PPTA Program Additional Information VDOT Innovative Project Delivery Division Website: http://www.virginiadot.org/business/ppta-default.asphttp://www.virginiadot.org/business/ppta-default.asp. Thomas.Pelnik@vdot.virginia.gov Dusty.Holcombe@vdot.virginia.gov

25. Virginia’s Public-Private Transportation Act (PPTA) Northern Border Finance Workshop December 11, 2006 Thomas W. Pelnik III, P.E. Director, Innovative Project Delivery Division