Infrastructure P3 pilot program can speed Army Corp projects
An infrastructure public-private partnership pilot program that the Army Corps of Engineers has identified four huge projects totaling $6.51 billion. They are part of the “Revolutionize USACE Civil Works” initiative. Its goal is to accelerate project delivery, make financing and budgeting more efficient, and streamline permitting in part by eliminating duplication of reviews.
This is an executive branch effort to secure for a $200 billion commitment to infrastructure spending. America’s Water Infrastructure Act of 2018 authorizes $3.8 billion in new Army Corps projects, supplemented by $17.4 billion in emergency funds related to natural disaster recovery and $2 billion in a 2019 budget-related law.
The act “incentivizes the development of effective and efficient water infrastructure by authorizing measures that would provide greater flexibilities for USACE and its non-federal partners to use available federal and non-federal funds, make greater use of contributed funds, and allow innovative use of contracting tools,” according to a U.S. Army news release. “The Act also increases tools available for financing federal projects, including additional tools to work with other federal agencies. Further, AWIA 2018 focuses on the infrastructure needs and priorities of today by addressing the portion of the President’s Infrastructure Initiatives related to deauthorization of certain federal civil works projects. ”
What can P3 do for infrastructure projects? In a December 2018 presentation, the Army Corps of Engineers said:
- Accelerate project delivery
- Reduce cost to taxpayers
- Reduce risk to population and infrastructure
- Reduce scheduling and funding risk
- Reduce USACE backlog of projects
The corps also noted that the P3 needs: market interest and viability; a non-federal revenue source such as an assessment district or fees; and availability payments made during the operation and management for availability of the asset.
From eight applications, the Army Corps of Engineers selected four projects for the pilot program and estimated the savings through the pilot program:
- Brazos Island Harbor (“BIH”) Channel Improvement Project, Texas ($288 million, estimated savings $150 million): Project would deepen the Port of Brownsville ship channel from 42 feet to 52 feet in addition to dredging berthing areas, constructing dredged material placement area capacity, raising levees, and providing aids to navigation.
- LA River P3 Pilot Concept ($1.4 billion, estimated savings 33%): Ecosystem restoration project on the Los Angeles River, which includes water quality and recreation features. The proposal identified three separate elements spanning 11 miles from the northern edge of Griffith Park to Downtown LA.
- New Soo Lock Construction ($922 million, no savings specified): Construction of a second lock at St. Mary’s River at Sault Ste. Marie, Michigan. The Soo Locks are currently in place in the area and serve an important role in the Great Lakes Navigation System.
- Sabine Pass to Galveston Bay (S2G) Coastal Storm Risk Management (CSRM) Project ($3.9 billion, estimated savings of 4 years due to full federal funding upfront): CSRM project will reduce the coastal storm and flood risk to this area of coastal Texas. The project has full Federal funding due to the Bipartisan Budget Act of 2018. The non-Federal sponsors (NFS) are proposing innovative ways to capture revenue for their portion of the project costs.
The corps may add one to the list.