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Unformatted text preview: ontract Combines Design-Build team assumes the risk Design Benefits Benefits Time savings Time Cost savings Cost savings Shared risk Shared Public sector better at managing risks associated with environmental Public associated ntal clearance, permitting, right-of-way acquisition clearance, Private sector better at managing the risks associated with: Private Design quality Design quality Construction costs Construction Delivery schedule Delivery Improved quality Improved 5.. 5 Design-Build with a Warranty Guaranty of materials, workmanship, performance measures for a Guaranty limited time (typically 5-20 years) 6. Design-Build-Operate-Maintain (DBOM) Increased incentives to provide high quality (e.g., JFK Airtrain) Increased 7. Design-Build-Finance-Operate (DBFO) Contractor responsible for financing, in addition to all commitment Contractor under DBOM Financial risk is borne by contractor Financial 8. Build-Operate-Transfer (BOT) Same as DBFO except the contractor retains Same DBFO except Ownership of the facility Ownership the The operating revenue risk The Any surplus Any 9. Build-Own-Operate (BOO) Ownership remains with contractor increased Ownership Full Delivery or Program Management Full Long-term concession or lease agreement (e.g., Chicago Skyway) Long Private sector concessionaire is given the lease of facility for a certain time period (typically Private 25-99 years) for an upfront fee paid to the public sector Private firm also agrees to maintain and/or upgrade and operate the facility Private Potential benefits Potential Transferring responsibility for increases in user fees to the private sector; Transferring Generating large up-front revenues for the public agency; Generating Transferring operations, maintenance, and capital iimprovement responsibilities to the private mprovement Transferring sector; Transferring most project, financial, operational and other risks to the private concessionaire; and Transferring private Taking advantage private sector efficiencies in operations and maintenance activities. Taking private 2 4 1 1 2 1 3 1 1 11 1 1 9 4 1 1 2 24 Sources: Infranews, Public Works Financing for highway projects, and FTA Budget and Policy Office, November 2006 4 4 1 1 States with existing concession projects States with potential concessiontype projects (number in preaward stage in November 2006) In Transit Sector In Transit-oriented development (TOD) Transit Joint Development Joint Business Improvement District Business Tax Increment Financing (TIF) Tax Joint Development Joint Ground lease Ground Air-rights lease Air Operations cost sharing Operations Ventilation Ventilation Utilities Utilities Parking Parking Construction cost sharing Construction Station connection fee Station Public and Private-Sector Benefits and Risks Public Sector of Transit-Oriented Development of Public Sector - Primary Benefits/Risks Private Sector - Primary Benefits/Risks Increased ridership and fare revenues Higher land values Joint sharing of costs for mixed-use stations Higher rental/lease rates and sales prices Potential for dedicated property/sales tax revenue More affordable housing opportunities Potential for lease payments or other developmentrelated revenues Risk of development market decline negating value of developer investment in transit project Risk that private development revenues fail to accrue due to delays in development activity Risk of commercial development delays caused by transit project delays Public Sector - Secondary Benefits/Risks Private Sector - Secondary Benefits/Risks Revitalized neighborhoods and commercial zones Higher retail sales from greater customer exposure Reduced traffic congestion and suburban sprawl Increased access to labor Reduced need for roads and other infrastructure Reduced parking costs in suburban locations Reduced crime and increased safety resulting from rejuvenated urban landscape Risk that transit service levels do not match needs of development lessees, patrons, or residents. Risk of development requirements requiring costly changes to transit facility designs and operations Risk of mismatch between transit patrons and retail or residential customers of related development Benefit Assessment District Benefit Those who benefit from the presence of a station pay a certain amount of Those additional tax. Equity Partnership Equity Land sale to private partner Land Business Improvement Districts Business Properties within the districts pay additional tax due to the enhanced transport Properties services. Tax Increment Financing (TIF) Tax Tax increment provides funds for rehabilitation and redevelopment of depressed Tax area(s) within a community. Multimodal Partnership Multimodal Multimodal projects provide opportunities to combine development, Multimodal financing and/or operation of facilities that serve more than one transport mode (e.g., Portland Oregon, Max Airport Extension). Types of Risks Associated with Transportation Project PPPs Transportation • Demand/...
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