Case Studies in Infrastructure Delivery

285 Pages·2002·9.908 MB·English

by  John B. Miller (auth.)

CASE STUDIES IN
INFRASTRUCTURE DELIVERY
THE KLUWER INTERNATIONAL SERIES IN
INFRASTRUCTURE SYSTEMS:
DELIVERY AND FINANCE
Consulting Editor
John B. Miller, Ph.D.
Massachusetts Institute of Technology
Cambridge, USA
Case Studies in
Infrastructure Delivery
By
John B. Miller
Massachusetts Institute of Technology
SPRINGER SCIENCE+BUSINESS MEDIA, LLC
Library of Congress Cataloging-in-Publication Data
Miller, John B.
Case studies in infrastructure delivery / by John B. Miller,
p.cm.—(The Kluwer international series in infrastructure systems. Delivery and Finance;
ISDF 102)
Companion text to the author's Principles of public and private infrastructure delivery.
Includes bibliographical references.
ISBN 978-1-4613-5306-5 ISBN 978-1-4615-0923-3 (eBook)
DOI 10.1007/978-1-4615-0923-3
1. Infrastructure (Economics)—United States—Finance—Case studies. I. Title. II.
Series.
HC110.C3 M527 2001
363\0068T--dc21
2001058518
Copyright © 2002 by Springer Science+Business Media New York
Originally published by The Massachusetts Institute of Technology in 2002
Softcover reprint of the hardcover 1st edition 2002
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, mechanical, photo
copying, recording, or otherwise, without the prior written permission of the
publisher, Springer Science+Business Media, LLC.
Excel® is a registered trademark of Microsoft Corporation. Adobe®
and Acrobat® are registered trademarks of Adobe Systems
Incorporated.
Printed on acid-free paper
TABLE OF CONTENTS
TABLE OF CONTENTS •...............................•..........•.•..•.•......................... V
LIST OF T ABLES. ............•............•...........•....................•...•....•.•...•......• XIII
LIST OF FIGURES. ..............•....•............................•......•.•...•.•..•.•.•.•...... XIV
LIST OF EXIDBITS (STORED ON COMPANION CD) ................... XV
FOREWORD ......•.....•.•.•........•.•.......•.........•..............•.•........................... XIX
The Quadrant Framework/or Analysis o/Project Delivery and
Finance Alternatives ............................................................ xix
PREFACE ....................................................•.•......................•..•.•.......•... XXV
A CKN0 WLEDGEMENTS ••••••••••••••••••.••.•••••••........•.•....•.••••••••••••••••• XXVII
GLOSSARY OF TERMS ..•......•.....•........................•.•.•.......•....•......... XXIX
CHAPTER 1 BRIDGING THE GOLDEN GATE:
OUTSOURCING TO A NEW PUBLIC ENTITY ............................ 1
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-OO-T -016 .................. 1
BRIDGING THE GAP ................................................................................. 1
Location 0/ the Bridge .................................................................... 2
Assessing the Bridge's Feasibility ................................................... 3
THE FORMATION OF THE GOLDEN GATE BRIDGE HIGHWAY AND
TRANSPORTATION AUTHORITY ..................................................... .4
Bidding the Project ......................................................................... 5
Bond Financing/or the Project ...................................................... 7
Construction ................................................................................... 9
QUESTIONS ........................................................................................... 11
REFERENCES ......................................................................................... 13
NOTES ................................................................................................... 13
CHAPTER 2 THE DULLES GREENWAY ..•....•.•.•.•.•......•.•.....•..... 15
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -T -014 ................ 15
vi Case Studies in Infrastructure Delivery
INTRODUCTION ..................................................................................... 15
BACKGROUND OF THE PROJECT ........................................................... 16
FINANCING THE PROJECT ...................................................................... 19
DELIVERY OF THE DULLES GREENWAY ............................................... 22
OPERATING RESULTS ............................................................................ 23
QUESTIONS ........................................................................................... 24
CONCLUDING NOTES ............................................................................ 29
REFERENCES ......................................................................................... 30
NOTES ................................................................................................... 31
CHAPTER 3 INTERNATIONAL ARRIVALS BUILDING AT
JOHN F. KENNEDY INTERNATIONAL AIRPORT ................... 33
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-98-I-201 ................. 33
INTRODUCTION ..................................................................................... 33
HISTORY OF THE JOHN F. KENNEDY INTERNATIONAL AIRPORT .......... 34
EARLIER PLANS FOR INTERNATIONAL ARRIVALS BUILDING ............... 34
HISTORY OF THE PORT AUTHORITY ..................................................... 35
NEW PLANS FOR INTERNATIONAL ARRIVALS BUILDING ..................... 35
TERMINAL ONE ..................................................................................... 3 7
FEASIBILITY ANALYSIS OF THE lAB ..................................................... 37
PRELIMINARY DESIGN -1993 TO 1994 ................................................ .40
THE PRE-QUALIFICATION AND BIDDING PROCESS - 1995 TO 1997 ..... .41
NEW YORK LAND LEASE PROBLEM .................................................... .45
CONSORTIUM MEMBERS _ JFK INTERNATIONAL AIR TERMINAL LLC 45
THE AMSTERDAM AIRPORT MODEL .................................................... .46
FINANCING STRATEGY ......................................................................... 47
CLOSING THE DEAL .............................................................................. 48
QUESTIONS ........................................................................................... 49
CHAPTER 4 THE SR 91 EXPRESS LANES .................................. 53
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97-T-012 ................ 53
THE PROBLEM ....................................................................................... 53
Key Features ofA B 680 ................................................................ 54
THE HISTORY OF PRIVATE TOLL ROADS IN THE UNITED STATES ........ 55
CALT RANS' PRE-QUALIFICATION PROCESS ...................................... 56
THE CALL FOR COMPETITIVE CONCEPTUAL PROPOSALS ..................... 57
THE PROPOSALS .................................................................................... 58
BRIEF HISTORY OF SR 91 ..................................................................... 59
KEY FEATURES OF THE PROPOSED SR 91 TOLL EXPRESSWAY ............ 60
Consortium Members .................................................................... 60
Contents VB
THE PROPOSED DEVELOPMENT FRANCHISE AGREEMENT ................... 61
FINANCING PACKAGE ........................................................................... 63
MATT MOORE'S TASKS ......................................................................... 63
QUESTIONS ........................................................................................... 67
REFERENCES ......................................................................................... 69
NOTES ................................................................................................... 70
CHAPTERS SANTA ANA VIADUCT EXPRESS ......................... 71
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -T -011 ................ 71
THE PROBLEM ....................................................................................... 71
Salient Features ofA B 680 ........................................................... 72
CALTRANS' PRE-QUALIFICATION PROCESS ...................................... 72
THE CALL FOR COMPETITIVE CONCEPTUAL PROPOSALS ..................... 73
THE PROPOSALS .................................................................................... 73
THE SANTA ANA VIADUCT EXPRESS (SAVE) ...................................... 73
The SA VE Consortium .................................................................. 75
Project Details .............................................................................. 76
Scope ..................................................................................... 76
Cost Estimates ....................................................................... 77
Traffic Studies ....................................................................... 78
Projected Toll Revenues ....................................................... 79
SAVE'S Financing Plan ................................................................ 79
Pre-Construction ................................................................... 79
Proposal preparation ............................................................. 82
Project Development. ............................................................ 82
Project Initiation ................................................................... 82
Final Pre-Construction .......................................................... 82
Construction .......................................................................... 82
Take -Out ............................................................................. 84
CONSTRUCTION SCHEDULE .................................................................. 84
THE FINAL FRANCHISE AGREEMENT .................................................... 85
QUESTIONS ........................................................................................... 85
REFERENCES ......................................................................................... 96
NOTES ................................................................................................... 97
CHAPTER 6 CONFEDERATION BRIDGE OVER THE
NORTHUMBERLAND STRAIT .....•.•.•.....•.............•...•.•................. 99
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -T -010 ................ 99
INTRODUCTION ..................................................................................... 99
PRINCIPAL ECONOMIC FEATURES OF PRINCE EDWARD ISLAND .......... 99
viii Case Studies in Infrastructure Delivery
TRANSPORT LINKS WITH THE MAINLAND .......................................... 101
TRAFFIC CARRIED AND TOLL RATES ................................................. 101
DIFFICULTIES WITH FERRY SERVICES ................................................ 103
PROPOSAL FOR A FIXED CROSSING .................................................... 1 04
TERMS OF THE FRANCHISE AGREEMENT ............................................ 1 04
COST ESTIMATES AND PROJECT SCHEDULE ....................................... 105
BRIDGE DESIGN AND CONSTRUCTION PLAN ...................................... 105
THE DEVELOPER'S CONSORTIUM ....................................................... 1 08
QUESTIONS ......................................................................................... 1 09
REFERENCES ....................................................................................... 112
CHAPTER 7 IDGHWAY 407 ETR-TORONTO ........................ 115
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -T -013 .............. 115
INTRODUCTION ................................................................................... 115
PAUL DECKER, HUGHES ..................................................................... 116
A NEW ASSIGNMENT .......................................................................... 118
THE HISTORY OF PRIVATE SECTOR INVOLVEMENT IN HIGHWAY 407
ETR ........................................................................................ ,. ... 120
BREAKTHROUGH TECHNOLOGY IN TOLL COLLECTION: A VI/ETC ON
HIGHWAY 407 ETR ..................................................................... 123
THE PROVINCIAL AUDITOR'S REpORT ............................................... 124
Overall Audit Observations ........................................................ J2 4
PAUL'S REpORT TO HUGHES SENIOR EXECUTIVES ............................ 126
QUESTIONS ......................................................................................... 127
REFERENCES ....................................................................................... 128
CHAPTER 8 HUDSON-BERGEN LIGHT RAIL TRANSIT
SYSTEM ..................................................................................... 129
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-OO-T -019 .............. 129
INTRODUCTION ................................................................................... 129
THE NJ TRANSIT CORPORATION ......................................................... 130
The Corporation's Operating Funds .......................................... J3 0
The Corporation's Capital Program .......................................... 131
THE ORIGINAL PROCUREMENT PLAN ................................................. 133
TECHNICAL DEFINITION OF THE HBLRT PROJECT ............................ 135
COMMERCIAL DEFINITION OF THE HBLRT PROJECT ......................... 135
Covering the Cost ofI nitial Delivery .......................................... 136
Covering Fifteen Years ofO peration .......................................... 13 7
THE PROCUREMENT ............................................................................ 138
Contents IX
PROPOSAL EVALUATION AND SELECTION OF THE RAYTHEON JOINT
VENTURE .................................................................................... 141
Price Evaluation ......................................................................... 141
A Financing Change ................................................................... 142
The New Financing Scheme ............................................... 143
QUESTIONS ......................................................................................... 143
REFERENCES ....................................................................................... 146
NOTES ................................................................................................. 148
CHAPTER 9 mGHWA Y 407 ETR (PART 2) .............................. 149
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-OO-T -017 .............. 149
ROUND 1 ............................................................................................. 149
BACKGROUND ..................................................................................... 150
THE RE-PRIVA TIZATION OF HWY 407 ETR ........................................ 151
THERFP ............................................................................................. 152
Prior Review and Comment on the RFP's Standard
Agreement ................................................................... 157
Pre-Qualification of Bidders ............................................... 158
Evaluation Based Solely on Price ....................................... 15 8
STANDARD & POOR'S RISK ASSESSMENT ........................................... 159
ETR INTERNATIONAL'S FIRST BID PRICE ........................................... 160
QUESTIONS ......................................................................................... 161
CHAPTER 10 INDIANAPOLIS WASTEWATER TREATMENT
WORKS ..................................................................................... 163
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -W -10 1 ............. 163
MAYOR'S OFFICE, INDIANAPOLIS, SEPTEMBER 1993 ......................... 163
BACKGROUND ..................................................................................... 164
HISTORY OF INDIANAPOLIS ................................................................ 164
HISTORY OF THE WASTEWATER TREATMENT PLANTS ...................... 165
INITIAL STUDY OF OPERATING ALTERNATIVES ................................. 167
TIMELINE OF PROCUREMENT PROCESS .............................................. 171
DIVISION OF RESPONSIBILITIES .......................................................... 171
THE CONTRACT SELECTION BOARD MEETING ................................... I72
PUBLIC WORKS CONFERENCE ROOM: TUESDAY, 9 A.M ..................... I72
QUESTIONS ......................................................................................... 177
REFERENCES ....................................................................................... 178
CHAPTER 11 THE SUPERAQUEDUCTO PROJECT - PUERTO
RICO ..................................................................................... 179
x Case Studies in Infrastructure Delivery
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-99-W -107 ............. 179
INTRODUCTION ................................................................................... 179
REQUEST FOR PROPOSALS (RFP) ....................................................... 180
THE WINNING CONSORTIUM .............................................................. 183
THE WINNING PROPOSAL ................................................................... 185
PROJECT SCHEDULE AND BUDGET ..................................................... 187
Design/Build Schedule ................................................................ 187
Cost: Design-Build ..................................................................... 187
Cost: Operate-Maintain .............................................................. 188
PROJECT FINANCING ........................................................................... 189
QUESTIONS ......................................................................................... 190
REFERENCES ....................................................................................... 192
CHAPTER 12 MANAGED PUBLICIPRIVATE COMPETITION
FOR WASTE WATER TREATMENT WORKS .................•.....•. 193
CHARLOTTE-MECKLENBURG VEST WATER TREATMENT AND IRWIN
CREEK WASTEWATER TREATMENT PLANTS .............................. 193
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -W -103 ............. 193
Two PERSPECTIVES ON THE CHARLOTTE COMPETITION: .................. 193
HISTORY OF CHARLOTTE .................................................................... 194
CHARLOTTE MECKLENBURG UTILITY DISTRICT ................................ 195
WHEELABRATOR PURCHASE PROPOSAL ............................................ 197
DEVELOPMENT OF THE BIDDING PROCESS ......................................... 200
THE REQUEST FOR PROPOSALS .......................................................... 202
EVALUATION OF THE PROPOSALS ....................................................... 204
CLOSING ............................................................................................. 206
QUESTIONS ......................................................................................... 207
REFERENCES ....................................................................................... 208
NOTES ................................................................................................. 209
CHAPTER 13 THE STRATEGIC GOALS OF PUBLIC
INFRASTRUCTURE PROCUREMENT: WILMINGTON
DELAWARE WASTEWATER TREATMENT
PROCUREMENT ............................................................................ 211
INFRASTRUCTURE DEVELOPMENT SYSTEMS IDS-97 -W -104 ............. 211
INTRODUCTION ................................................................................... 211
WILMINGTON, DELAWARE AND SURROUNDING NEW CASTLE COUNTY
.................................................................................................... 213
PLANT HISTORY .................................................................................. 216
INVOLVEMENT OF THE PRIVATE SECTOR ........................................... 218