LA Metro issues RFP for $9B-$14B Sepulveda Transit Corridor | Dump Trucks Charlotte NC
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This past July, the Metro announced that it was considering four potential routes ranging in cost from $9.4 billion to $13.8 billion, but the Metro noted that those estimates did not take into consideration the value engineering that would take place after one of the routes is selected.
Three of them would use heavy rail and one would be built as a monorail, but all would have to go through the Santa Monica Mountains and around a number of commercial and residential developments. The monorail, at 15.4 miles, would use about 35% tunnels. At 13.5 miles and using 100% tunnels, the most expensive heavy rail option was projected to cost between $11 billion and $13.8 billion.
The Metro anticipates $5.7 billion of funding for the project to come from the half-cent Measure M sales tax, approved by voters in 2016. Another $3.8 billion will come from other local, state and federal agencies.
A predevelopment agreement (PDA) will allow the Metro to benefit from the private sector's expertise in the earliest phases of engineering and design, increasing its chances of success.
Projects that will benefit the most from PDAs, according to a Metro presentation, are:
- Large in scale and technically complex;
- Not completely defined;
- Still undergoing environmental reviews;
- Ones with good revenue potential even though the overall financial feasibility has to be determined; and
- Good deals for potential private partners.
The Metro has already laid out steps it must take before engaging one or two private partners to collaborate through a PDA and one of those steps is fleshing out the project description, which includes identifying potential user fee revenues from tolls and other transit charges; estimating what the construction, operating and maintenance costs will be; and defining the PDA procurement process.
According to the Federal Highway Administration's (FHWA) Public-Private Partnership Procurement Guide, PDA partners are evaluated more on qualifications and their best-value propositions rather than on pricing, although that is a consideration.
On the flipside, the FHWA's guide says, is that when the PDA partner is also going to build, operate and manage the project using a PDA, it often results in the inability to obtain competitive pricing and "diminishes the creative tension" that emerges during the competition for a project.