UPDATE: Jan. 16, 2020: The Los Angeles County Metropolitan Transportation Authority (Metro) has selected five potential partner teams to move forward in the bidding process for the $9 billion-$14 billion Sepulveda Transit Corridor Project.
The five groups that the Metro considers qualified to submit a Predevelopment Agreement (PDA) proposal that will see up to two winners assist with project planning and design are as follows.
- ACS Infrastructure Development, headquartered in Spain
- LA SkyRail Express, which includes Chinese Transportation firm BDY
- Bechtel, and others on a team it has formulated
- Fengate, and others on a team it has formulated
- Tutor Perini, Parsons and Plenary
Bechtel's and Fengate's teams are both named Sepulveda Transit Corridor Partners.
The selected group or groups will also have a chance at winning an Implementation Agreement for the project after completion of work under the PDA contract. The Metro is scheduled to select the PDA team in the winter or spring of this year.
The total project will receive $9.5 billion in funding from Measure M, a transportation sales tax approved by Los Angeles County voters in 2016, and will open its first phase in 2033 and second, to Los Angeles International Airport, in 2057.
Dive Brief:
- The Los Angeles County Metropolitan Transportation Authority (Metro) has issued a Request for Proposals (RFP) in order to find up to two contractors that can assist with the planning and design of the $9 billion to $14 billion Sepulveda Transit Corridor. The cost of the project will depend on which route the Metro chooses.
- The chosen contractor(s) will perform predevelopment work, including determining the overall concept and identifying potential transportation modes, for a fixed guideway transit line from the San Fernando Valley to Los Angeles' Westside and then eventually to Los Angeles International Airport. After the development phase, the winning team will have the opportunity to bid on the construction phase through a public-private partnership, although plans to use that delivery method could change.
- The agency expects to be complete with its evaluation of route alternatives by the end of this year and plans to both select the contractor(s) and identify preferred routes for an environmental review by the summer of 2020.
Dive Insight:
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.
