JEFFERSONVILLE — Possibilities for the Ohio River Bridges Project continue to evolve, but most of the project’s financing details remain undefined.

Following February’s industry forum hosted by the Louisville and Southern Indiana Bridges Authority, which sought input from finance and construction companies, the group was told the project’s timeline could be reduced by half.

The 12-year timeline could be cut to six years by adopting some of the innovative approaches to constructing the east-end bridge, downtown bridge and the rebuild of Spaghetti Junction, according to the presentation that was given to the bridges authority’s Finance and Construction and Planning Committee on Wednesday.

“They believe looking at the conservative or traditional schedule that time savings can be achieved through a more innovative approach,” said Bridges Authority Executive Director Steve Schultz of the companies that attended the industry forum. “We were pleasantly surprised to hear it.”

By saving time, the authority was also told it could reduce the overall cost of the project.

In addition to the $500 million in cuts proposed by Gov. Mitch Daniels, Kentucky Gov. Steve Beshear and Louisville Mayor Greg Fischer, bridges authority co-chairman Kerry Stemler said the overall cost could be cut.

“Without a doubt the project can be dramatically reduced in cost,” he said.

Stemler offered the example of $800 million of inflationary costs that were built into the project that could be lowered if the project moves ahead of its initial timeline.

“Every person and firm believe that we can move much quicker on this project than our timeline currently shows,” he said.

However, as Stemler readily admitted, no decisions on how it will be accomplished have been made.



P3’s

Part of how quickly the project moves forward will depend on which financing structure the bridges authority adopts.

One avenue being considered is a public and private partnership — also referred to as P3’s.

Schultz defined P3’s as a contractual agreement between the public and private sectors that allows for more private participation than what is considered traditional. He added the cooperation “aligns incentives” to speed up the project and allows for better control of project costs.

While no specific examples were offered Schultz said alternative delivery models would be used so you don’t have to wait for money to become available from the federal government or the states each year.

The initial phase of procurement could begin as early as September of this year with the final procurement around the first or second quarter of 2012, he said.

By assuming Schultz’s timeline, the bridges authority would have less than six months to receive bids for the construction, review the contracts and break ground by the authority’s self-imposed deadline.

Additionally, the financial plan, once it is determined, still needs to be presented to and approved by the Kentucky Public Transportation Infrastructure Authority.



NEPA and SEIS

A number of other tasks will be completed in conjunction with determining the financing structure the authority will use to pay for the bridges project.

As required by the federal government, due to the changes requested, the authority is preparing a Supplemental Environmental Impact Study.

“Essentially, they’re going to supplement the document that was prepared and finalized in 2003,” said Tim Hagerty, a Louisville attorney working on the project’s environmental issues.

The document being referred to is the 2003 Record-of-Decision, which took five-and-a-half years to prepare. Officials with the bridges authority and project planners said the update they are preparing will be completed in about a year.

Part of completing the SEIS is also completing a review of the National Environmental Policy Act, or NEPA.

“[It’s] a federal statute that’s about good policy making,” Hagerty said. “It’s a stop, look and listen statute that requires federal agencies ... to stop, evaluate the consequences of their actions, look at alternatives and make sure they’re making an informed decision. It does not dictate any particular results.”

The intent of the document is to examine the proposed design modifications, tolling and to update the data and information in the document to ensure they are still valid, he said.

Once the draft SEIS is complete, it will be presented for public review and comments. Following the public input period a final version of the SEIS will have to be completed, which will then be submitted for approval amending the record of decision.

 

TIFIA round two

Another funding element that remains undefined is money is again being sought by the bridges authority through the Transportation Infrastructure Finance and Innovation Act, or TIFIA.

The same funding request, which is reviewed and awarded by the Department of Transportation, was denied in October of last year. A request was made to cover as much as one-third of the project’s cost, but the request is still a loan and would need to be paid back in its entirety.

The bridges project will still be facing strong competition to acquire the TIFIA funding. Of the 39 projects that submitted a letter of interest in the last round of TIFIA funding, four were invited to submit applications. The bridges project is among 34 infrastructure plans to submit letters of interest for funding this year.

 

Tolling

During a presentation to the American Association of State Highway and Transportation Officials, LaHood offered a sign of approval to the bridges authority in including tolls as one of its funding mechanisms.

“I’ve met with the governor[s] of Indiana and Kentucky. They’re building a new bridge between the two states and we’ve agreed that tolling has to be a part of that,” he said. “Tolling has to be a part of the mix. You can raise a lot of money with tolls and if states decide that’s the way they want to go ... as long as you’re building more capacity. That’s really what we’re going to look at.”

While tolling approval has still not been sent back from the FHWA, Wilbur Smith and Associates has begun collecting data for its time-of-day travel model.

Once the data is received and calculated, the model will help determine a rate for specific vehicles at specific times of day.

Tim Sorenson, Kentucky division manager and senior project manager with Wilbur Smith and Associates, said the model will break the traffic patterns down into four periods during one day and also between passenger and larger — more than two axle — commercial vehicles.

The authority’s current tolling plan would eliminate the Sherman Minton Bridge, Clark Memorial Bridge or Spaghetti Junction from consideration and also set a frequent commuter rate at $1.

But again, when the final rates and figures will be available to the public is unknown.

“At what point-in-time that will come out I really don’t know,” Stemler said.

However, he was confident about hitting another timeline goal.

“The most important thing, we’re on target for August 2012,” Stemler said.