Deals

$2.3bn Georgia road PPP crashes to an end

‘West by Northwest’, a PPP that would have created a managed lane system in Atlanta, has been terminated without explanation. Its abrupt cancellation marked another letdown for a private sector eager to tap a would-be market in America.

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A disappointing anticlimax befell “West by Northwest” – a $2.3 billion toll road public-private partnership (PPP) in Atlanta, Georgia – Wednesday when an e-mail blast from the Georgia Department of Transportation (GDOT) announced an end to its nascent project.

“The state of Georgia is cancelling the public-private partnership procurement of the West by Northwest Corridor contract,” read a statement signed by Brandon Beach, a GDOT board member who is listed as “P3 committee chairman”.

Beach, a businessman and a figure on the Georgia political scene best known for his 2009 bid for state senate, went on to claim GDOT is “examining” an alternative to its nixed PPP.

GDOT in its statement did not provide a reason for dropping West by Northwest. Beach, along with GDOT press secretary David Spear and chief engineer Gerald Ross, did not respond to a request for further comment.

First conceived after PPP legislation was enacted in Georgia in 2009, West by Northwest was a $2.3 billion, 27-mile tolled lane project that stretched from Interstate 75 and Interstate 575, north of Atlanta, championed by Vance Smith, a onetime state representative who became GDOT Commissioner in 2009.

Smith installed a daring privatisation scheme akin to Florida and Texas that also included a planned “multi-modal passenger terminal” (MMPT) and a possible contract for highway rest stop supervision.

A request for proposals (RFP) for West by Northwest was published in September, with a shortlist of three consortia that included  the likes of ACS, toll road operator Cintra, Meridiam Infrastructure, concession and construction powerhouse Vinci and OHL.

That month, GDOT boss Smith, amid criticism that his organization was understaffed, resigned.

Throughout, low tax, less government sentiment dogged the PPP programme Smith established, with the local Tea Party chapter calling for fiscal conservatism. Industry speculation centred on whether ousting Smith as GDOT head signalled a loss of crucial political backing for West by Northwest, or a more asset specific reason sunk the project.

But industry personnel doubted the end of West by Northwest would spell doom for privatisation in America.

“I would not characterise [the termination of West by Northwest] as a shockwave, the industry is already punch drunk after Texas cancelling its major toll road concession in 2009,” said Joel Moser, partner for law firm Bingham McCutchen. “But it is disappointing”.