By David Pendered
The Georgia Legislature’s committee report on transportation funding does not appear to acknowledge the one financing method being employed to ease two major bottlenecks in metro Atlanta.
The words, “public private partnership,” seem to appear nowhere in 12 potential solutions named in the report. It’s as if the P3 approach that’s successfully underway in the Northwest Corridor, and planned for the I-285/Ga. 400 area, didn’t warrant mention in the final report.
That said, P3 is still at the top-of-mind at the Georgia Department of Transportation for reasons including:
- The Jan. 15 deadline for companies to submit their statements of interest on the 285/400 project;
- Progress on the Northwest Corridor project, along I-75 and I-575. The project is to open by mid 2018, well ahead of schedule according to historic norms because of the way the deal was structured, GDOT officials have said.
There’s no doubt the report is due for plenty of debate in the legislative session that begins Jan. 12. And there’s little doubt the omission of P3 will be well vetted. The report was formally released Dec. 30, just in time to land in the doldrums of the holiday season’s end.
In a conversation Monday, Russell McMurry delivered positive reports about both of the current P3 projects in metro Atlanta. McMurry is a longtime GDOT official who served most recently as the state’s chief transportation engineer. Gov. Nathan Deal tapped McMurry, in November, to succeed Toby Carr as the state’s transportation planning director.
For the 285/400 project, McMurry said the private sector is slated to provide construction financing to the tune of $600 million or so, depending on the final bid.
“It’s basically a construction loan the state will pay back over 10 years,” McMurry said. “We’re able to accelerate the project by the private equity coming to the table. The state of Georgia will pay it back with state and federal dollars.”
Without that cash infusion, the project probably would languish for years – until the state was able to cobble together money from its more traditional sources:
- In the form of cash, to start work, and;
- Adequate revenue projections from any number of sources – anticipated state and federal revenues, potential tolls – to satisfy potential investors who would buy bonds the state would sell to finance construction.
Regarding the Northwest Corridor project, McMurry said the private sector is providing more than $60 million to cover construction costs. The state is to repay the private partners with funds from state and federal sources, McMurry said – including low-cost credit assistance from the federal government.
McMurry said Georgia is financing the project with about $274 million provided through a federal TIFIA loan. The hybrid of funding that Georgia proposed to repay the loan was a key reason Georgia won funding approval through the 1998 Transportation Infrastructure Finance and Innovation Act.
“They liked it because it was a safe way to invest money,” McMurry said.
The first of two payments is scheduled when the road is substantially complete, defined as ready to be driven. The second payment is due when the road is open for use and as contractors are completing the final details, McMurry said.
The governor has not said in public how he thinks Georgia should address transportation funding. Late last year, Deal said he did not want to get in front of the report from the Joint Study Committee on Critical Transportation Infracstructure Funding.
The state House and Senate agreed to create the committee when they adopted House Resolution 1573 during the 2014 session. The governor signed the resolution on April 22, 2014.