California to prioritise speed, consistency in PPPs

Dale Bonner, secretary of the state’s Business, Transportation and Housing Agency, said in an interview he wants to develop a programme that is ‘predictable, consistent, and lends itself to a pipeline’ of projects. Speeding up the state’s lengthy environmental review process is also a priority.

Equipped with newly selected advisors and a pipeline of potential projects, California will look to develop a consistent approach to implementing public-private partnerships (PPPs) across the state and avoid mistakes of the past such as lengthy environmental review processes, according to a senior government official.

Dale Bonner

As a first step to streamlining the process, the US state has hired a team of advisors to help the California Department of Transportation (CalTrans) pursue PPPs. The department intends to select Sperry Capital as its lead advisor, Dale Bonner, secretary of the state’s Business, Transportation and Housing Agency, told InfrastructureInvestor.

James Martling, founding principal of the Sausalito-based advisory firm, said Sperry will also subcontract with accounting firm KPMG and Great Pacific Securities, a California broker-dealer.

Martling wouldn’t say when Sperry, KPMG and Great Pacific will begin working with the agency, but he said they “look forward to assisting CalTrans as quickly as possible”.

Bonner said the trio will begin by advising CalTrans on the PPP program itself, where key priorities will include “ensuring some level of consistency in our approach” to analysing PPP opportunites. “And then we are expecting along the way to try to move to . . . specific opportunities that will arise,” he added.

The Business, Transportation and Housing Agency has already published a list of potential PPP

The goal is to make sure that we are going to have a transaction process that is predictable, consistent, and lends itself to a pipeline

Dale Bonner

opportunities. These include building a replacement for the southern access road to the Golden Gate Bridge, known as Doyle Drive.

“We are putting a lot of emphasis on the Doyle Drive project and will be deciding in the very near future whether we’re going to actually offer that as a PPP opportunity,” Bonner said. He also is looking to “push forward a pipeline of projects on the 710 corridor”, which is one of the main freight corridors in southern California.

He added that a PPP to replace the Gerald Desmond Bridge in Long Beach would be “most likely to emerge in 2010 because the environmental work is far along”.

Environmental reviews are another area where Bonner hopes to streamline the PPP process. The state has one of the most exacting environmental review processes in the US for public works projects. It often takes several years for projects to complete an acceptable environmental impact report, which must be completed whenever a project may cause environmental damage. The review must demonstrate the project will mitigate damages enough so they will not have any significant impact on the environment.

Bonner said one of his priorities will be to speed up the environmental review process so projects can get under way more quickly.

“The key is going to be to not take the business as usual approach of spending several years of doing the environmental waiting and then [wait] for the inevitable lawsuit and spend a couple years more to fight that,” he said.

Instead, he hopes to “work and engage with the environmental community at the inception and work with them as partners” so as to mitigate the possibility of time-consuming legal challenges that might otherwise result.

Bonner reiterated the key will be to deliver a consistent approach across the state for environmental and other policies so interested investors have one set of rules to follow when bidding for PPPs and advisory contracts.

“There continues to be a very strong interest in investing in California and I think the goal is to make sure that we are going to have a transaction process that is predictable, consistent, and lends itself to a pipeline [of projects],” he added.