No matter your perspective on particular projects, there can be no question that the ability to finance and fund projects will continue to be a challenge. One contracting method developed in part to address those kinds of concerns is referred to as P3, or public private partnership. The P3 method allows major projects to move forward by combining both public and private funds.
Just four months into 2013, several P3 bridge projects have reached significant milestones. In February of this year, the Ohio Department of Transportation selected three teams to provide P3 proposals for a new I-90 Innerbelt bridge – Ohio’s first use of the P3 method. Just last week, the Port Authority of New York and New Jersey authorized the award of a $1.5 billion contract to the NYNJ Link Partnership for the replacement of the Goethals Bridge.
However, not all the news is of projects moving forward. A proposed new bridge over the Knik Arm (the KAC or Knik Arm Crossing) in Anchorage, Alaska, hit a significant hurdle in the form of an audit prepared by the Alaska Joint Legislative Budget and Audit Committee. That audit suggests the project may have significant feasibility concerns – including “unreasonably optimistic” toll and revenue projections – projections that are a key component to a successful P3 project. Although KABATA, the Knik Arm Bridge and Toll Authority, disputes the audit, it is indicative of yet another challenge facing this potential project.
Similarly, the Columbia River Crossing – a new bridge for Interstate 5 connecting Portland, OR, to Vancouver, WA – has seen funding challenges so far this year. Oregon passed necessary funding for its portion of the costs to construct a new bridge over the Columbia River for Interstate 5 relatively quickly. Washington, however, was not so quick – and only last week came to a compromise that allows some of the funding to be issued, with much of it contingent on a USCG review. Final construction financing is still not approved.
Major infrastructure plays an important role; it comes with a significant price tag. While innovative methods have been developed to increase the financial feasibility of these projects, it is clear that additional education, study, and creativity is needed to continue moving toward development of successful projects that support the logistics of today’s economy.
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