Spring RFP for Knik Arm P3 expected

A request for proposals for the Knik Arm Crossing P3 in Alaska will have to wait until the end of the state legislative session in April. The project is angling for better financing.

A formal request for proposals (RFP) for what is set to be the first ever public-private partnership (PPP; P3) in Alaska will not be published until the spring, after the state legislature has adjourned.

The Knik Arm Bridge and Toll Authority (KABATA) is waiting for the Alaska Senate to sign off on legislation to enhance the credit of the ‘Knik Arm Crossing Project,’ said Kevin Hemenway, chief financial officer (CFO) of the Authority in Anchorage.

Hemenway told Infrastructure Investor House Bill 23 (HB 23) and Senate Bill 13 (SB 13) contained “moral obligation language” calling on the state to fund a project reserve of up to $150 million.

Hemenway went on to predict each bill would pass by April, with the end of the Alaska legislative session. KABATA would publish a RFP by May. The Authority shortlisted three consortia in October 2011 for the project, including:

– Alaska Infrastructure Access Partners, teaming InfraRed Capital Partners, Macquarie Group Bouygues, Colaska, QAP Weeks Marine, URS Alaska Moffat & Nichol, USKH and R&M Consultants;

– Cook Inlet Passage Partners, a private consortium of Meridiam Infrastructure, Kiewit Corporation, Manson Construction Company, VMS, Transfield Services North America, Transportation Infrastructure, Parsons Transportation Group, Golder Associates, Dowl HKM Dan Brown and Associates, BMT Fleet and KPMG;

– North Star Mobility Group, with HOCHTIEF PPP Solutions North America, HOCHTIEF Aktiengesellschaft, ACS Infrastructure Development, ACS Servicios y Concessiones, Iridium Concesiones de Infraestructuras, Flatiron Constructors, Dragados USA, Dragados SA Traylor Brothers. Also HNTB Corporation CH2M Hill Engineers, Alaska Interstate Construction, Arcadis, Kodiak Map Hart Crowser Earth Mechanics Bitttner-Shen, Denali Drilling, and Gregg Drilling.

Hemenway, who came to Alaska a decade ago and became CFO of KABATA in 2006, called 2013 “the year for this project,” noting the Authority could close in on choosing a private partner for the P3 by year-end.

HB 23 and SB 13 come as the latest salvo to fund the Knik Arm Crossing, a projected 2.7-mile tolled bridge linking Anchorage to Port Mackenzie that has emerged as a contentious and – to an extent -polarising project.

First conceived in 2003 as a $715 million P3 with a 35-year lease, the would-be toll bridge incurred opposition for its possible environmental impact, while also coming under scrutiny from the Federal Highway Administration (FWA), which worried its construction would impede traffic in and out of Port Mackenzie.

But how Alaska will go about funding the Knik Arm Crossing Project has led to disagreement in the legislature and opened the P3 up to public criticism.

The Crossing, which would use an availability payment structure (APS), is now billed as a $1.2 billion project. KABATA last August applied, and was rejected, for a $500 million TIFIA (Transportation Infrastructure Finance and Innovation Act) loan. The rejection marked the fifth time the project had failed to secure TIFIA funding.

In addition to TIFIA, HB 13 and SB 23, KABATA is also aiming to raise $600 million under the Safe, Accountable, Flexible, Efficient Transportation Equity Act (SAFETEA).

The Alaska Senate, however, has refused to allot funding to the project, unveiling last April a $2.6 billion transportation budget with no mention of the toll bridge. Meanwhile, KABATA has been criticized for obscuring the true cost of the project.

For his part, Hemenway has remained optimistic that the Kink Arm Crossing P3 will come to completion.

“There has been a 180-degree sea change in the Senate,” said Hemenway, who characterised the Crossing as a “transformative project”.