On January 4, 2016 the three shortlisted proposers competing to enter into a public-private partnership (a “P3”) with the Pennsylvania Department of Transportation (“PennDOT”) submitted their proposals. The award of the P3 contract, which calls for constructing 27 compressed natural gas (“CNG” fueling stations) along the Commonwealth’s public highways as well as making modifications to transit agencies’ vehicle maintenance and storage facilities, is expected to come sometime in February or March of 2016.
The goals and objectives of the Project include
- Providing cost-effective CNG fuel availability to enable transit fleets to switch from diesel and gasoline to CNG;
- Achieving operational cost savings for transit agencies;
- Reducing greenhouse gas emissions;
- Providing retail CNG fueling to the public (where feasible); and
- Establishing consistency between transit agencies for the deployment of CNG fueling infrastructure.
To accomplish those goals and objectives PennDOT is seeking a private partner that will make the necessary utility upgrades, compress gas and make it available for fueling for transit agencies and third parties, and operate and maintain fueling stations. The private entity will be compensated for its capital and operational costs but will be subject to PennDOT for liquidated damages in the event it fails to perform and will pay royalty payments to PennDOT based on third party sales of CNG.
As of October 2015, twenty three regional transit agencies opted into the CNG program and were divided into three tiers (Tier 1 includes five transportation agencies, Tier 2 includes seven transportation agencies, and Tier 3 includes eleven transportation agencies). CNG facilities for Tier 1 agencies have completion deadlines between fall 2016 and spring 2017, CNG facilities for Tier 2 agencies have completion deadlines between spring and summer 2017, and CNG facilities for Tier 3 agencies have completion deadlines between fall 2017 and spring 2021.
More information about the CNG Fueling Station P3 Project, including a list of the shortlisted proposers and their partners, can be found by visiting PennDOT’s CNG Fueling Station website.
On September 29, 2014, the Pennsylvania Department of Transportation (“PennDOT”) issued a press release announcing that the Pennsylvania Public-Private Partnership (“P3″) Board approved a project seeking a private partner to design, build, finance, operate and maintain compressed natural gas (“CNG”) filling stations at as many as 37 transit facilities throughout the state. According to PennDOT, the CNG filling stations must be designed to provide CNG for public transportation vehicles as well as for private parties with CNG vehicles. Once the fueling stations are build and operating, PennDOT will retain an unspecified portion of the fuel sales revenue for use in future capital projects. The rest of the fuel sales revenue will presumably go directly to the private partner.
The press release indicates that PennDOT will soon issue a Request for Qualifications to solicit interested parties and that PennDOT expects to invite qualified teams to submit proposals as early as next year, with a project team selection coming as early as summer 2015. Additional information regarding the P3 CNG Fueling Station Project is available at Pennsylvania’s P3 website.
The February/March 2014 edition of Foundation Drilling Magazine features an article written by Babst Calland attorneys Richard D. Kalson and Marc J. Felezzola entitled “P3: The Future of the Construction Industry?” The article discusses the growing popularity of public-private partnerships as an alternative means for public construction and the most common public-private delivery methods.
Foundation Drilling Magazine is published by the International Association of Foundation Drilling. For more information regarding Foundation Drilling Magazine, including how to obtain a copy of the February/March 2014 edition of Foundation Drilling Magazine containing the article referenced above, please visit the International Association of Foundation Drilling’s website or contact one of the article’s authors via the links provided above.
The Pennsylvania Department of Transportation (“PennDOT”) has announced that based upon responses to PennDOT’s request for qualifications for its Rapid Bridge Replacement Project, a public-private partnership involving the construction of more than 500 bridges, it will invite four teams to submit proposals for the project. Those four teams are:
- Plenary Walsh Keystone Partners: Plenary Group, The Walsh Group, Granite Construction Company, HDR Engineering, HNTB Corporation and Infrastructure Corporation of America
- Keystone Bridge Partners: InfraRed Capital Partners, Kiewit, Parsons, The Allan A. Myers family of companies, DBi and American Infrastructure;
- Commonwealth Bridge Partners: John Laing Investments, Fluor, American Bridge Company, Traylor Bros. Inc., Joseph B. Fay Co., STV Incorporated and Infrastructure and Industrial Constructors;
- Pennsylvania Crossings: Meridiam, Lane Construction, AECOM, Trumbull, Wagman Companies and Cofiroute.
PennDOT expects to release the final project details and requirements to the four teams this summer and select a preferred proposal this fall. Construction is anticipated to begin in the summer of 2015.
According to PennDOT, the selected team will manage the design, construction and maintenance for at least 500 bridges throughout the Commonwealth for yet-to-be determined number of years under one contract. The team will be responsible for financing the effort and PennDOT will make payments based on the team’s adherence to the terms of the contract.
To learn more about the Rapid Bridge Replacement Project, you can visit PennDOT’s public-private partnership website.
According to a recent PennDOT press release, five teams have submitted Statements of Qualifications for PennDOT’s public-private partnership (“P3”) Rapid Bridge Replacement Project. The project would help repair or replace at least 500 bridges in Pennsylvania. You can read more about the five teams and this P3 project here.
As a service to its clients and prospective clients, the law firm of Babst Calland will provide a complimentary “year in review” breakfast seminar which will cover an overview of 2013’s significant developments (both statutory and case-law) in the area of construction law. This year’s topics include: CASPA, mechanics’ liens, payment bonds, pipeline construction, the Procurement Code and Public-Private Partnerships (“P3”). The seminar will be held on Tuesday, February 18, 2014 at the Doubletree Hotel in Greentree, beginning with a continental breakfast at 7:30 a.m., followed by the seminar at 8:00 a.m. For more information, please email Matt Jameson. Speakers will include Kurt Fernsler, Matt Jameson, Rick Kalson, Dave White, Nino Legeza, and Dave McKenery.
The Pittsburgh Post-Gazette recently published an article about how Pennsylvania’s Department of Transportation (“PennDOT”) plans to replace at least 500 decaying bridges across Pennsylvania via public-private partnerships (“P3”). According to the article, nearly 60 of those bridges are located within Allegheny County, with another 23 in neighboring Westmoreland County and another 13 in Butler County. The Post-Gazette reports that PennDOT hopes to get construction underway on 50 to 100 bridges in 2015 and that the party or parties with whom PennDOT contracts for the construction of the bridges will also maintain the new bridges for a period that may be as long as 40 years.
The entire Post-Gazette article is available here.
On October 31, 2013, the Virginia Supreme Court unanimously overruled a lower court’s decision to strike down the Virginia Public Private Transportation Act (“P3”)
In December 2011 the Virginia Department of Transportation (“VDOT”) and Elizabeth River Crossings OpCo, LLC (“ERC”) entered into an agreement pursuant to Virginia’s P3 legislation for the design and construction of a new Midtown Tunnel and the Martin Luther King Freeway Extension. Additionally, the agreement provided for the continual maintenance of the existing Midtown and Downtown Tunnels for 58 years. The total cost for completing the project was estimated to exceed $2.04 billion dollars. To assist in financing the project, the agreement provided for the imposition of tolls. Danny Meeks, along with other users of the Downtown Tunnels, filed a six-count complaint against ERC and VDOT in the Circuit Court for the City of Portsmouth, claiming, in part, that tolls on the Tunnels and MLK Freeway are unconstitutional taxes in violation the Due Process Clause of the Constitution. The Circuit Court ruled in favor of Meeks.
Elizabeth River Crossings OpCo, LLC v. Meeks, The Virginia Supreme Court overruled the lower court decision in a fifty-five page opinion, and held that “the tolls on the Midtown Tunnel, Downtown Tunnel and MLK extension, which are (1) paid in exchange for a particularized benefit, (2) not compelled by government, and (3) collected solely to fund the Project are user fees, not taxes.” You can read the full text of the opinion here.
The American Road & Transportation Builders Association (“ARTBA”), who filed a “friend of the court” brief arguing for the overturn of the lower court’s decision, issued a statement following the Court’s ruling. ARTBA stated, “[t]he ruling represents an unqualified victory for the U.S. transportation construction and Virginia’s P3 community in that it allows work on a major infrastructure improvement project to proceed and preserves the states existing tolling methods. Also, ARTBA hopes the Court’s decision sends a signal that unwarranted challenges to P3 legislation in other states will be overturned in a similarly swift and absolute manner.” You can read the full text of ARBTA’s statement here.
This case will certainly be viewed as a major victory for those in the construction industry who believe the future of highway construction rests with P3 projects.
PennDOT has recently created a website to publish information concerning Public Private Partnerships (“P3”). A P3 project is a contractual agreement between a public entity and private entity that:
- Transfers the responsibility of a transportion facility’s engineering, construction, operation and/or maintenance to the private sector for a defined period of time;
- Allows the private sector to perform by contract a service previously provided by the public sector; and
- Ensures the private firm receives payments either from existing revenue sources or through the collection of new tolls or user fees.
Additional information regarding the P3 program can be found in the manual describing the details of the program.
An article on a significant Public Private Partnership highway construction project in Indiana appeared in the January 28, 2013 edition of the Engineering News Record (subscription required). Public Private Partnerships, also known as “P 3”, will likely deliver a significant portion of the large transportation projects in the United States in the next ten years. Babst Calland recently debuted a portion of its new construction law seminar on P 3 at is 2012 Construction Law Year in Review Seminar on February 27, 2013. For more information about P 3 or any of Babst Calland’s construction law seminars, please email Rick Kalson or call (412) 394-6557.
On July 5, 2012, Governor Tom Corbett signed legislation that authorizes public-private partnerships (“P3”) for road, transit and other transportation related projects.
The Pennsylvania P3 Act, 74 Pa. C.S. §§ 9101-9124, applies to “transportation facilities,” which includes typical transportation structures such as bridges, roads and parking lots, but which also includes multimodal facilities, airports, terminals and ports, together with their associated structures. Under the Act, the rights for use or control of a P3 transportation facility are transferred from PennDOT to another public owner or to a private development entity.
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