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History of Public Private Partnerships in Washington State

History of Public Private Partnerships in Washington State. Tacoma Narrows Bridge. 1940 - “Galloping Gertie” original span collapses in wind storm. 1950 - Old span replaced by new bridge. 1993 - Population growth triggers call for an additional span.

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History of Public Private Partnerships in Washington State

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  1. History of Public Private Partnerships in Washington State

  2. Tacoma Narrows Bridge 1940 - “Galloping Gertie” original span collapses in wind storm. 1950 - Old span replaced by new bridge. 1993 - Population growth triggers call for an additional span. Legislature enacts initial P3 law identifying five possible pilot projects. Second Tacoma span is chosen. (Bechtel-Kiewit)

  3. Tacoma Narrows Bridge 2000 Final EIS filed, but lawsuit invalidates financing scheme. P3 changed to D/B and legislature appropriates funding. This prompts review of state P3 statute.

  4. “Cost Savings by reversing the financing of TNB It is estimated that toll-payers will save at least $336 million over 24 years. But there is a price associated with these savings: more risk. Original TNB “Private Public Partnership”: 63-20 financing Traditional State Bond Financing** Total Borrowing $794 m Total Borrowing$711 m Mortgage Statement: Total Principal and Interest Over 34 Years Estimated at $1.908 billion* Mortgage Statement: Total Principal and Interest Over 24 Years Estimated at $1.572 billion *United Infrastructure Washington (UIW) Preliminary Financing Plan dated January 25, 2001. **Seattle Northwest Securities, assumptions as of May 10, 2005 (interest rates as of 5/10/2005 + 50 BP with CABs issues 7-9).

  5. What’s happened since? Design / Build Takes Off Gas-tax increases of 14.5 cents in 2003-2005 provides massive project rollout. Consultant design work increases from 15% to 54% of all projects by dollar value.

  6. What’s happened since? P3 Laws Revised Transportation Innovative Partnership Act (TIP) - RCW 47.29 • TIFIA (low-cost loans) • SAFTTE-LU (allows tolling on Interstate highways, etc.) • Allows transportation-related projects and programs of all modes to be eligible for development as a public-private partnership under the Transportation Innovative Partnership Program (TIP); • For transportation projects funded with toll revenues, any bonded indebtedness must be state-issued debt; • Requires citizen advisory committees for projects > $300 million. • Requires comparison with the department's internal ability to complete the project that documents the advantages of completing the project as a partnership versus solely as a public venture.

  7. P3 Proponents Not Satisfied • Due to political resistance, P3 proponents nibble around the edges at legislature: • 2011 – SB 5771(Failed) • Separates non-toll projects from current law. (Ferry terminal, West Coast Green Highway) • 2011 – P3 Study • Appropriated $425,000 study of P3s and their effective implementation. The private consultants were representatives of AECOM, Nossamon, and KPMG. (http://www.leg.wa.gov/JTC/Pages/PublicPrivatePartnershipsStudy.aspx) • 2012 - SB 6350 (Failed) • Repeals TIP. Finds that the act has not met the needs and expectations of the public or private sectors for the development of transportation projects, and states a legislative intent to continue to search for ways to bring innovative methods of transportation project delivery and finance to Washington. For more information contact: Vince Oliveri, PTE 17 vince@pte17.org

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