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Georgia Moves Forward with $1B Toll Project in Atlanta Region

JAN 4, 2013 4:06pm ET
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BRADENTON, Fla. — Georgia is moving forward with the nearly $1 billion Northwest Corridor Project after changing direction on how to proceed with the 30-mile, managed-lane project to relieve gridlock in the Atlanta region.

The Georgia Department of Transportation issued its third and final draft request for proposals to four qualified short-listed teams last month. However, one team has since withdrawn from consideration, GDOT spokesman David Spear said Friday.

Responses to the RFPs are due back to the state in June. The team responding with the proposal offering the “best value” is expected to be selected by July.

The project, which was begun as the state’s first full public-private partnership, has become a more traditional, largely state-financed project with design and construction by the private sector. The state calls it a P3/design-build-finance project.

Funding for the new lanes will be done with a combination of state and federal motor fuel sales taxes, bonds backed by tolls and federal grants, a yet-to-be approved low-interest federal loan, and gap financing from the private partner chosen to design and build the project.

The State Road and Tollway Authority will issue up to $385 million of toll bonds and $125 million of grant anticipation revenue vehicle bonds, or Garvees, for the financing.

GDOT will dedicate up to $536 million from state and federal motor-fuel sales taxes to the project, and is seeking a $270 million TIFIA, or Transportation Infrastructure Finance and Innovation Act, federal loan.

“We are finalizing the actual [TIFIA] application document and expect to submit to USDOT…in the first quarter of this year,” Spear said.

The team selected to build the project will be asked to provide as much as $160 million in gap financing, which the state expects to repay when the project is completed. The developer’s contribution will vary depending on the final structure of the project agreement detailed in the RFP.

The Federal Highway Administration is expected to issue a Record of Decision in April approving the project, and authorizing GDOT to proceed with design and construction.

The new managed lanes will be added along Interstates 75 and 575 in Cobb and Cherokee counties, which are major commuting arteries northwest of Atlanta.

The new lanes will be separated from the existing Interstate, and will be reversible in order to allow only southbound traffic during morning commuting hours and northbound traffic in the evenings.

Drivers will pay a variable-rate toll based on traffic volume to access the lanes. The toll rate will be controlled by the state, not the developer, and will be managed to maintain traffic flow at about 45 miles per hour. The new lanes are expected to open in 2018.

Spear said Friday that Fluor-Lane withdrew from consideration as one of the design-build teams, reportedly to pursue other projects.

The three remaining firms asked to submit RFPs are C.W. Matthews Contracting Co. and the Michael Baker Corp.; Georgia Transportation Partners, comprised of Bechtel Infrastructure Corp., Kiewit Infrastructure South Co., Dewberry and Davis LLC and STV Inc.; and Northwest Express Road Builders, comprised of Archer Western Contractors, the Hubbard Group and Parsons Corp.

The long-planned project was to be Georgia’s first full public-private partnership but Gov. Nathan Deal cancelled the procurement well into the process in December 2011 to maintain state control over the tolls.

“We need to make these improvements to our system … in a manner that best protects the sovereign interests of the state,” Deal said at the time. The design-build-finance method “is a much better way forward.”

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