Colorado greenlights P3 option for I-70 East

CDOT’s Transportation Commission has selected the DBFOM model as the most cost-effective for the delivery of the I-70 East project.

Colorado’s Transportation Commission has decided that partnering with the private sector is the best way to finance and deliver the I-70 East project.

The Commission, part of Colorado’s Department of Transportation (CDOT), made its decision after reviewing a Value for Money Analysis that explored and compared the traditional design-build method with the DBOM (design, build, operate and maintain) and DBFOM (design, build, finance, operate and maintain) models.

While both DBOM and DBFOM methods made the project affordable, the Commission selected the latter method “because of its ability to transfer more risk to the private sector in several key areas including the long-term costs of maintaining the corridor,” CDOT said in a statement. “In this model, the concessionaire is given annual performance payments and must meet strict operations and maintenance standards.”

The High-Performance Transportation Enterprise (HPTE), the government agency operating within CDOT and tasked with finding innovative ways to finance major transportation projects, based its analysis on the Partial Cover Lowered (PCL) alternative, the “preliminarily identified preferred” option and first phase of the I-70 East project, estimated to cost $1.8 billion.

The first phase involves a 12-mile segment of the highway that connects Denver International Airport with the city centre and communities to the west. One of the features that also makes this project more complex is the I-70 East viaduct, which was built in the early 1960s and is deemed a safety concern.

The PCL alternative would replace the viaduct by lowering that portion of the highway and placing a landscaped cover over a section of it. It would also add an additional express toll lane in each direction from I-25 to I-225.

Following the decision to partner with the private sector on the project, CDOT will move ahead with the development of a financing plan. Once a plan has been formulated, the Record of Decision (ROD) can be completed, which will in turn conclude the environmental study process that began in 2003.

CDOT and the Federal Highway Administration (FHWA) expect to issue an ROD and finalise plans for the project in mid-2016, allowing construction to begin in the fall of the same year.

In September 2014, HPTE selected the legal team of Freshfields Bruckhaus Deringer and Kaplan Kirsch Rockwell to serve as P3/TIFIA (Transportation Infrastructure Finance and Innovation Act) counsel for the I-70 East project.

Colorado is not the only state considering procuring its section of I-70 as a public-private partnership (PPP; P3). Running east to west and spanning 2,151 miles across 10 states, the I-70 was built between 1956 and 1965.

Missouri has also been exploring tolling options to improve and expand its portion of I-70. Last December, Missouri Governor Jay Nixon instructed the Missouri Highway and Transportation Commission to explore the use of tolls for upgrading the highway.

“In MoDOT’s [Missouri Department of Transportation] current financial condition, with no indication that additional revenue is expected at either the federal or state levels, the use of tolling as a revenue source for the reconstruction and expansion of I-70 is worthy of consideration,” the Commission wrote in its report.

Nixon is reviewing the report, which “moving forward […] will help facilitate an informed, robust discussion about meeting our most pressing transportation infrastructure needs in a way that benefits all Missourians,” he said in a statement.