Engineering Inc - November/December 2017 - 24

neering firms, local and state governments, organized labor and othIf there's one issue that bridges today's political divide, it's that main- ers-have come to recognize that these projects serve an important
tenance and improvements to U.S. infrastructure have reached a
purpose and they have an important place in the scheme of things."
critical level. The U.S. Bureau of Fiscal Service estimates through
Brian Middleton, executive project manager at Jacobs EngineerSeptember 2015 that a $183 billion backlog of deferred mainteing, says where there are revenue streams, there are opportunities.
nance exists. This includes both routine and critical facility and
"However, P3s should not be viewed strictly as a financing tool.
infrastructure repairs. Unfortunately, delaying infrastructure mainThere are other reasons to use this approach, including improving
tenance further will increase future costs as well as
project quality and lowering costs," he says.
The U.S.
jeopardize safety and quality of life, PwC notes.
P3s represent an entirely different way to think
Bureau of
"There is clearly a sense of urgency. There is an
about projects, notes Samara Barend, senior vice
Fiscal Service
understanding that something must be done to
president and North American strategic developestimates
through ment director at AECOM. "It's not about extractaddress the problem," Shah says.
September
Today, most P3s in the U.S. involve large-scale
ing money from the asset. You can bring innovation
2015 that a
transportation initiatives, but they're also used to fund
forward with greater private sector risk sharing,"
and build courthouses, hospitals, prisons and college
$183 billion Barend says. "You can utilize economies of scale to
dormitories. For example, The Port Authority of New
deliver a project better and cheaper." But there are
backlog
York & New Jersey turned to a partnership for its $4
other advantages, she says. "Rather than building
of deferred
billion overhaul of a terminal at New York's LaGuarsomething and then ignoring it until it falls apart or
maintenance
dia Airport.
needs maintenance, you're able to maintain it over
exists
In California, a $5 billion LAX modernization
its life span and, in the end, produce a more costproject-revolving largely around the construction of
efficient asset," Barend says.
a people mover and new pedestrian bridges-was announced by the
While this approach presents both opportunities and challenges
Los Angeles Board of Airport Commissioners in 2015. Meanwhile,
for A/E firms, many companies simply aren't equipped to handle P3
Pennsylvania has wrapped 558 bridge repair projects into a massive
projects, which require a great deal of upfront time and resources-
$1.1 billion partnership that will compress 12 years of construction
often for minimal compensation. Moreover, these projects require
into three years.
different skill sets-including a deeper understanding of technolIn fact, 38 states have some form of legislation enabling P3s.
ogy and a more collaborative approach-and they can take years to
"Over the last several years, a cleaner understanding of P3s has
unfold.
emerged," says Geoffrey Segal, manager of government advisory and
"There are a lot of people, including engineers, that have been
affairs for Macquarie Capital, Inc., a finance and advisory firm that
doing things the same way for 30 years or more, and adapting to a
invests in P3 projects. "The various stakeholders-contractors, engi- P3 approach can prove extremely challenging," says Middleton.
MINDING THE GAPS

A Sampling of P3s

Here are a few P3 success stories:
l In August 2015, the Michigan Department of
Transportation and Freeway Lighting Partners, LLC,
entered a 15-year agreement to construct, operate and
maintain streetlights.
l Port Miami Tunnel, a P3 between the Florida Department
of Transportation and Miami Access Tunnel, LLC, led to
the construction of a new $1.1 billion tunnel and roadway
linking the port with nearby highways.
l The Dulles Greenway, a six-lane, 14-mile limited access
highway in Loudoun County, Virginia, was built using a
P3 with Toll Road Investors Partnership II, now owned by
Australia-based Macquarie Group Ltd. and Autostrade
International, which now operates the road.
l Denver Transit Partners teamed with Fluor Enterprises,
Inc., and Macquarie Capital Group Ltd., as well as Jacobs
Engineering, to build 47 miles of new commuter rail for
Denver's RTD Light Rail System. The $2.2 billion project
is known as Eagle P3.
l The Long Beach Court Building in California is a $490
million award-winning facility that was built using a P3,
with AECOM serving as architect of record.

The Governor
George Deukmejian
Courthouse, Long
Beach, California

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