Colorado Eyes Future P3s Amid Denver Project Boom

Express lanes and parking under consideration.

  • HPTE is drafting an express lanes master plan that will identify corridors for further study
  • CDOT is also exploring possibilities for parking assets, and transportation-related projects
  • Local P3 procurements have prompted the move

Colorado’s Department of Transportation (CDOT) is gearing up to explore future P3 projects, as momentum builds around others currently being procured in the state.

David Spector, director of CDOT’s High Performance Transportation Enterprise (HPTE) said that the body is currently in the midst of drafting an express lanes master plan, that will look at tolled express lanes as a system and identify corridors for further study. He added that, upon completion later this year, the study will allow HPTE to determine which projects may be delivered via P3, or through a design-build-operate-maintain (DBOM) procurement.

“This is the strategic planning step,” Spector said.

Beyond highway projects, CDOT is also exploring possibilities for parking assets, and transportation-related projects that would take advantage of the department’s pool of land right-of-way.

“This initiative will help local authorities explore some opportunities for land development, and other uses,” Spector said. He added that the overall health of the current market has prompted both initiatives.

“The fact that you’re seeing a continual flow of projects is a positive,” he said.

To be sure, the City and County of Denver are currently in procurement for the National Western Center Triangle P3. The estimated $500 – 600 million project comprises the design, construction, and financing of a new approximately 10,000 seat arena. The successful proponent will also deliver an exposition hall, rehabilitate an historic building constructed in 1909; as well as long term operations and maintenance of the public facilities on the remainder of the Triangle.

The procurement body on February 11 plans to conduct an industry forum for the project.

Additionally, the Board of Directors for the Jefferson Parkway Public Highway Authority recently shortlisted three consortia for the roughly $200 million Jefferson Parkway P3. The project involves the design, construction, finance, operation and maintenance of a 9.2-mile long, four-lane limited access toll highway that will extend from SH 128 on the north to SH 93 on the south.

Learning From the Past

Spector said that HTPE has learned much from past P3 procurements. Colorado is one of the first states to have procured P3s, beginning with the roughly $120 million US-36 managed lanes project.

Plenary Roads Denver was in 2013 chosen to design, build, finance, operate and maintain approximately 24 miles of managed lanes in the US 36 corridor between Boulder and Denver. The project in 2014 reached financial close.

“We need to focus on the project more, and less on the delivery method.” —David Spector, director of CDOT’s High Performance Transportation Enterprise (HPTE)

Following the success of the US-36 project, Colorado successfully procured FasTracks Eagle P3 Project and the Central 70 Project. Spector noted that both design-build-finance-operate-maintain (DBFOM) projects include tolling, but added that the contracts were substantially different from each other because there was so much to learn from each P3. He added that, as a result of HTPE’s prior experience with public private partnerships, the organization updated its risk-sharing provisions, contractual conditions, and enhanced both stakeholder engagement and transparency.

“I think for us in particular, we have worked with various sponsors and we take the best of what they do and incorporate those practices in ours,” Spector said. “We will be watching the Jefferson Parkway P3 and Triangle Parcel project closely to learn more.”

The Road Ahead

Spector noted that, in spite of the robust P3 market taking shape now in Denver, creating a stable project pipeline in the US can be challenging. Moreover, the recent departure of developers such as AECOM and Skanska from the P3 market demonstrates that the level of risk inherent in P3 procurement is not acceptable for all market participants.

Spector also said that project funding continues to remain a challenge for procurement bodies. He added that his infrastructure wishlist includes having a consistent funding scheme, whether it is at the federal, state or local level.

“Even prior to the federal government shutdown, lack of funding for P3 projects was a real issue,” Spector said. “Some states have now taken it upon themselves to self-fund.”

But, aside from financing, Spector also said that that project procurement must ultimately get beyond labels.

“We have to get to the point where people should be agnostic about whether the delivery method a design-bid-build, design-build-finance or a DBFOM,” he said. “We need to focus on the project more, and less on the delivery method.”

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