How Gov. Edwards and Sec. Wilson changed Louisiana’s P3 laws to address needed infrastructure funding
By Gov. John Bel Edwards and Dr. Shawn Wilson
The state of Louisiana is more than 300 years old, and though today it boasts a wealth of natural gas and petroleum, it first experienced rapid industrialization following World War II. Fast forward to the 21st century and portions of the state’s infrastructure remain antiquated, leaving current state leaders to think outside the box when it comes to finding methods and resources to bring the Pelican State into a global economy.
Upon election in 2016, Governor John Bel Edwards and Secretary of Transportation and Development, Dr. Shawn D. Wilson, embarked on a plan to deliver a world-class multimodal transportation system to the citizens of Louisiana. Achieving such a task would prove challenging as funding was a major issue. Gov. Edwards and Sec. Wilson began the unprecedented process to procure the state’s first-ever public-private partnership as a funding mechanism, issuing a “Request for Information” to explore offerings. To facilitate the undertaking, Dr. Wilson changed the state law governing infrastructure P3s.
“The Department did not have the authority to issue public-private partnerships. That authority existed only with the Louisiana Transportation Authority for many years,” says Sec. Wilson. “If Louisiana was ever going to get serious about this innovative procurement approach, the Department needed the authority to enter into public private partnerships.”
Governor Edwards signed the bill into law, and the legislation also aligned P3 authority with specific Category A & B projects that have been a part of the state’s master transportation plan for the last 10 years. Furthering his commitment, Gov. Edwards created the Task Force on Transportation Infrastructure Investment, comprised of 18 elected officials statewide, and doubled the port priority program.
The Department selected the Belle Chasse Bridge and Tunnel as its first P3 project because of the critical need to replace the aging structures. Nearly 35,000 motorists traverse the bridge daily, which serves Plaquemines Parish residents, Belle Chasse Naval Air Station, and an industrial and cultural tourism hub that leads to the mouth of the Mississippi River. If the model can work in this setting, it can certainly be successful for other projects around the state.
To help solidify the proposal, Louisiana successfully competed for, and was recently awarded, a $45 million INFRA Grant from the USDOT. The grant proceeds will be combined with state and local funds to provide a significant contribution for a private sector partner to use, along with tolls to be collected. The state will also consider incorporating into the partnership responsibilities to operate the existing toll bridge at La. 1 Highway in Lafourche Parish.
Secretary Wilson says, “Louisiana wants a partner that will provide a bridge that the community can be proud of in the very near future, and that has the lowest possible toll for the shortest possible term. The public-private partnership effort is important for establishing a sustainable path to delivering infrastructure.”
The $60 million FASTLANE grant was awarded in July 2016 and will be used to replace original pavement on Interstate 10, a vital cross-country route, the state’s busiest interstate, and the heart of the commercial corridor across Louisiana. This was coupled with the approval (in Jan. 2018) to embark on a $600 million GARVEE Bond Program that will allow the State to construct the Loyola Interchange on I-10. This will improve access from I-10 to the new terminal at Louis Armstrong New Orleans International Airport (scheduled to open in February 2019), and a project in Bossier City to provide direct access from the I-20/I-220 interchange into Barksdale Air Force Base.
The GARVEE projects, valued at approximately $250 million, are currently in design-build procurement. The remaining $350 million will be spent on widening I-10 through Baton Rouge, from the Mississippi River Bridge to the I-10/I-12 split. Procurement options include design-build, construction manager at risk, and possibly another public-private partnership.
Governor Edwards, who actively participated in the industry forum for firms submitting letters of interest, says, “My administration is committed to following industry best practices and leveraging all available resources to help re-introduce tolls to the state such that it is politically acceptable. We learned a lot from our early RFI attempts and we see valuable opportunities for private sector engagement in passenger rail, port development, and in the aviation sector. Louisiana is now poised and prepared to engage in the global market of public-private partnerships to help build the infrastructure system the citizens of this state deserve.”
Considering this is the state’s first full attempt at a P3, Louisiana has made a big splash in the industry as evidenced by the 20 “Letters of Interest” the project received, including six teams submitting statements of qualifications. The state is currently reviewing the qualifications packages and will soon narrow the list of teams to be invited to submit proposals. Louisiana expects to have identified a private partner by the first quarter of 2019.
John Bel Edwards is the 56th and current Governor of Louisiana, in office since January 11, 2016. For more information, visit gov.louisiana.gov
Dr. Shawn Wilson has served as Chief of Staff for the Department of Transportation and Development for 10 years, a role he filled under the executive administration of two Governors. For more information, visit wwwsp.dotd.la.gov