Louisiana plans first P3 for $112M tunnel, bridge replacement
- The Louisiana Department of Transportation and Development has solicited private companies and investors through a Notice of Intent (NOI) to join with the agency in its first public-private partnership (P3) for the $122 million replacement of the Belle Chasse Tunnel and Bridge in Plaquemines Parish, according to Equipment World. Firms interested in participating in the project must submit a Letter of Intent (LOI) by April 4.
- The bridge carries traffic in one direction and the tunnel in another. When the tunnel leaks, which is often, the bridge must be converted into a two-way span to accommodate traffic flow in both directions. The P3 would replace the tunnel and bridge with a new, fixed-span to carry traffic in both directions using an expected $50 million grant from the state in addition to private investment. The chosen consortium will be paid back through tolls.
- The Belle Chasse P3 was approved by the transportation committees in the Louisiana Senate and House in December, according to The Advocate, with some officials looking at private-sector involvement as a way of financing the state's $13 billion backlog of infrastructure projects. The transportation department expects to enter into a contract for the project in the summer of 2019.
Louisiana lawmakers may have set the transportation department on the path toward its first P3, but interest in that kind of business arrangement, in which the private sector assumes responsibility and risk for much of the project, is coming from other places in Louisiana.
Last month a group of business leaders in Shreveport proposed a $1 billion waterfront P3 for an area along the city's Cross Bayou. The Gateway Downtown Consortium said it would like to build a sports complex where a New Orleans Pelicans minor league basketball team would play. In addition, the project would feature a 3,500-seat arena, a new municipal center, a charter school with a concentration in technology and a 5,000-unit single- and multifamily housing development.
Even though the city rejected the chance to fund a similar project last year, Shreveport officials said they would reconsider such a role if the project remained transparent.
Another way Louisiana is financing infrastructure projects is through Grant Anticipation Revenue Vehicle (GARVEE) bonds. The $600 million GARVEE bonds are secured by 12 years of federal money the state expects to receive, as well as by local government payments.
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