Six groups vie for $715m Alaska bridge PPP

Meridiam, Plenary Group, Cintra, Hochtief and Infrared Capital Partners are among the groups that responded to a request for qualifications for a bridge project near Anchorage. Alaska authorities expect to shortlist bidders by the end of October.

Six groups have responded to a request for qualifications for a major transportation public-private partnership (PPP) near Anchorage, Alaska.

The project, known as the Knik Arm Crossing, involves building a 2.7-mile toll bridge linking Anchorage to Port Mackenzie, as well as developing related roads. The PPP carries a 35-year concession term and has previously been estimated to cost about $715 million.

The Knik Arm Bridge and Toll Authority (KABATA), an agency established in 2003 for the express purpose of developing the crossing, has decided to use an availability payment structure to fund the PPP, meaning that the private developer will receive regular public contributions in exchange for keeping the project available in good condition over the length of the concession term.

KABATA expects to shortlist bidders by the end of October, according to a statement. The agency aims to issue a request for proposals to the shortlisted bidders by the beginning of next year and to begin construction on the project as early as 2013.

KABATA issued a request for qualifications (RFQ) for the project this summer, to which the following six consortia responded to:

– Knik Bridge Partners, whose members include Bechtel, China State Construction International, CCA Civil, Finley Civil Engineering Group, Hanson Alaska, and BNP Paribas;

– Cook Inlet Passage Partners, which includes Meridiam Infrastructure, Kiewit, Manson Construction, Transfield Services, Parsons Transportation Group, Golder Associates, Dan Brown and Associates, and KPMG Corporate Finance;

– Plenary Roads Alaska, which is comprised of Plenary Group, John Laing Investments, PCL Civil Constructors, Granite Construction Company, H.W. Lochner, MMM Group, Michael Baker, Jr., T.Y. Lin International, Shaw Environmental, Goldman Sachs and Deutsche Bank;

– Alaska Infrastructure Access Partners, which includes Infrared Capital Partners, French developer Bouygues, QAP Weeks Marine, and Macquarie Capital; 

– Cintra Infraestructuras, which is comprised of Spanish toll road developer Cintra Infraestructuras, Ferrovial Agroman, Orion Marine Contractors, and Anchor QEA;

– North Star Mobility Group, which is comprised of German developer Hochtief, Spanish construction group ACS and subsidiary Dragados, as well as Flatiron Constructors, Traylor Bros, HNTB Corporation, CH2M Hill Engineers, Alaska Interstate Construction, Arcadis, Kodiak Map, Hart Crowser, Earth Mechanics, Bitttner-Shen, Denali Drilling and Gregg Drilling.

The current procurement process marks the second time that Alaska authorities have launched a tender for the project, following an unsuccessful tender launched in 2006.

The 2006 tender drew bids from consortia led by Macquarie and Bouygues, but faced delays due to environmental concerns about the impact of construction on endangered beluga whales inhabiting the inlet that the proposed bridge would span.

If successful, the project will be one of only a handful of US deals to employ an availability payment structure. Legislation to create a $150 million reserve fund with which to back the initial stages of the project is still pending approvals. The Alaska legislature is expected to take up the issue again in January.

The project has also faced legal challenges in recent months. While Anchorage Mayor Dan Sullivan has expressed support for the project, the city of Anchorage brought legal action against the US Federal Highway Administration (FHWA) in relation to the Knik Arm construction, arguing that the project would cause “irreparable harm” to the Port of Anchorage.

The FHWA requested a stay on the lawsuit as the parties are currently negotiating a solution, according to Kevin Hemenway, chief financial officer for KABATA. A 45-day stay was granted earlier this month, Hemenway said. Hemenway described the legal action as “narrowly focused” on the alignment of a particular part of the proposed bridge, and said he was “cautiously optimistic” that the issue could be resolved soon.