December 2011 Archives

Public Comment Period Opens for the Atlantic Wind Connection

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By Pillsbury Winthrop Shaw Pittman

The Department of the Interior has opened the public comment period for the environmental impacts of the Atlantic Wind Connection (AWC) project. The project envisions a link between the proposed off shore wind farms in the Atlantic from Virgina to New Jersey and will provide an effecient means of transporting the power they produce to land. The project is backed by Google - so if you're looking for adverse comments, you might want to search on Yahoo!

You won't find Jimmy Hoffa in this concrete

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Some things are truly amazing. A garage under construction in Cleveland collapsed and no one was killed or even injured. See pictures and the story here. There will be multiple investigations, of course, and somebody's project will be dealing with a major curve ball.

Where do you get your water? ASCE Gives Low Marks to U.S. Water Systems

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Chances are, you get your water from a public drinking water system, even though approxmiately two thirds of drinking water systems in this counrty are non-community systems -- think campgrounds and schools. And the chances are that the system that provides your water needs an upgrade. The American Society of Civil Engineers has produced the second in a series of reports grading America's infrastructure and has given the United States a grade of "D" for its water systems. You can see an executive summary of the report here and you'll be able to download the entire report when it is released on December 16 at the ASCE's website.

The water systems graded include systems for drinking water, and also water for industrial processes sewage systems. The report highlights the need for major investments in our country's water systems infrastructure and the numbers are staggering. In 2010, the country needed to spend $91 Billion but only spent $36 Billion. That gap is expected to get worse, rising to $84 Billion in 2020 and then $143 Billion in 2040.

Good thing we have lots of extra tax dollars to spend. Oh wait. We don't. Maybe PPP's are the solution.

Is the bottom behind us?

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Maybe. According to this article by Katy Barnato, private construction spending in the U.S. is expected to push $10 Billion this year, based on data through the first three quarters. Manufacturing, office and warehouse construction are leading the charge. It should be no surprise to anyone that residential construction continues to lag -- and that's not likely to change any time soon. But still, it's good news that in the aggregate, the construction sector is picking up. But as to whether it's an odd uptick or the beginning of the end of the Great Recession remains to be seen.

There is Light at the End of the Tunnel: Expanding Penn Station

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By Pillsbury Winthrop Shaw Pittman

A joint venture of AECOM, its Tishman Construction unit and STV was awarded a $19 million contract to provide construction management and other services for the Moynihan Station project which will expand Penn Station New York. Phase one of the project is estimated at $267 million and will create passenger access points in the historic post office across the street from the current Penn Station. Seven contractors have been pre-qualified for the construction contract. Tutor Perini continues its assault on the New York stalwarts.

Virginia is for lovers - and heavy civil contractors.

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By Pillsbury Winthrop Shaw Pittman

Virginia Gov. Bob McDonnell wants to increase the percentage of any year-end surplus and sales tax that is spent on transportion projects. According to this article, the specific proposals include:

* Increasing transportation's share of year-end surpluses to 75 percent.

* Authorizing the Commonwealth Transportation Board to implement a version of tax-increment financing so that when the state funds new transportation infrastructure a portion of the growth in state tax revenues that result from economic development surrounding the project will go to transportation.

* Increasing the amount of existing sales tax sent to transportation from .5 percent to .75 percent over the next 8 years.

* Proposing that the first 1 percent in revenue growth over five percent each year be dedicated to transportation

* Allow the state to match local money dollar-for-dollar on capital improvements as well as maintenance within a locality.

Sequestration - Should YOU Be Worried?

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If you answered "yes" but only because the title conjured up images of late nights in a small room with 11 other jurors of your peers...there is another type of "sequestration" that might be of concern to you.

The more noteworthy sequestration is the automatic budget cuts that were triggered on November 23, 2011, when the Government's "Super Committee" failed to agree on a means of reducing the Nation's defict. The Budget Control Act of 2011 mandates that federal spending be decreased by $109.3 billion per year over ten years, resulting in a total federal spending decrease of $1.2 trillion by 2023. Although this sequestration has already been triggered, it remains to be seen exactly how much this will effect spending on federal construction projects.

It is probably not worth panicking just yet since the cuts will not go into effect until 2013 - and the automatic cuts are a relatively small percentage of overall federal spending. Nevertheless, this is a sequestration you should keep on your radar, just like the AGC is.


Virginia wades deeper into the promise of P3

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Virginia announced a $940 million dollar P3 agreement with Flour-Transurban. The agreement calls for the construction of a 29 mile hot lane to ease the Virginia's traffic congestion, especially during rush hour.

The agreement calls for Fluor-Transurban to pay $843 million and Virginia to $97 million. Most of the current lanes will be toll free, as will be HOV-3 vehicles. Other vehicles will pay a toll that will vary in amount depending on the volume of traffic.

The Agreement's Key aspects include:


  • Fluor-Transurban will design and build the facility; manage and fund all operations and maintenance for a period of 73 years following construction. It will also share revenue with the Commonwealth.

  • Maintain free access for High Occupancy Vehicles (HOV) meeting state eligibility requirements and buses.

  • Develop and operate a dynamic tolling system. Tolls will vary based on demand to provide fast, reliable travel times.

  • All tolls will be paid with an E-ZPass and there will be no toll booths.

  • Electronic signs will alert travelers to current toll rates so they can make an informed choice whether or not to use the HOT Lanes.

  • Return the asset to the Commonwealth in good working order at the end of the agreement

Link to news release

The agreement is the latest in Virginia's foray into the P3 delivery method to meet a public need by partnering with the private sector.

Money in search of a Project

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A funny thing happened at a recent ENRNewYork infrastructure conference titled Where's the Money? -- they found some. During a panel discussion concerning infrastructure financing, both Robert Dove, Managing Director, The Carlyle Group and Christophe Petit, President, Star America Infrastructure Partners, told the large audience that they had "money to spend" on infrastructure projects. Indeed, both men suggested that they were eager to find an infrastructure project in which to invest.

Interestingly, both men were looking for very different project profiles. Mr. Dove stated a desire to invest in brown field projects only, whereas Mr. Petit wants green field projects. Given the amount of money these two men represent, there is a very attractive opportunity for the promoter of the right project.

In light of this and the money Presidents Obama and Clinton have pledged to raise for infrastructure projects (see Michael McNamara's 11/5/11 entry), perhaps some should be saying Show me the Project!!.

Show me the money! US to Invest $4 Billion in Sustainable Construction

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With all the talk -- and all the press -- about our cash-strapped federal government, you'd think that announcements of new government spending would be few and far between. But not if you're into green building. President Obama is teaming with former President Clinton to invest $4 Billion -- yes, that Billion, with a "B" -- in sustainable construction. Check it out here.

How much will that $4 Billion investment cost taxpayers? If you answered $4 Billion, you'd be wrong. The answer is zero! I guess they're just going to pluck that money from the tree.

money-tree.jpg

But don't worry where the money's coming from. Worry where it's going. To you? Or your competitor. Get your LEED Certificate out and polished -- or maybe just get it.

The Guatemala Canal?

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If you build it, they will come. But what if someone else built it first? We just might find out the answer to that question if Guatemala goes forward with its new president's plan to build a canal connecting the Atlantic and the Pacific Oceans. You can read about it here.

Presumably Guatemala is aware of the fact that Panama is currently building a third set of locks that will significantly expand its capacity. You can read about that here.

So Guatemala won't just compete with the Panama Canal we all know and love; it will compete with a new and improved Panama Canal.

Perhaps it's no surprise that Guatemala's president proposes to build its new canal as a Public Private Partnership. That likely means that it won't get done unless the marketplace determines that the canal would generate enough income to pay for its construction.