MoDOT scraps 800 Bridges financing plan

Contracting with a team of companies to design, build, finance and maintain 802 of Missouri's most decrepit bridges at a cost of $50 million a year was a lofty goal - and, ultimately, an unattainable one.

On Sept. 18, the Missouri Highways and Transportation Commission voted to move forward with a Plan B version of the Safe & Sound Bridge Improvement Program - dubbed 800 Bridges - after soaring interest rates stemming from ongoing turmoil in the financial markets doomed the privatized plan.

The decision came two days after Gov. Matt Blunt publicly called on the commission to set a construction start date and timeline for the massive project, which seeks to fix 802 Missouri bridges in five years at a cost of $400 million to $600 million.

While the project's scope hasn't changed, the new plan breaks the bridge work into three pieces, starting early next year with the rehabilitation of 100 bridges fast-tracked by the Missouri Department of Transportation.

The worst bridges - 554 that need to be completely rebuilt - will be addressed via a design-build package to be advertised this fall and awarded to the low bidder in the spring.

And starting in 2010, MoDOT will award contracts for rehab work on the remaining 148 bridges through an accelerated procurement process. All Safe & Sound bridge work would be complete by the end of 2014, officials have said.

MoDOT Director Pete Rahn said the outcome would be the same for motorists, although he's disappointed the state was unable to meet its original goal by employing the innovative model.

On the upside, Rahn said, the new plan is based on preliminary work MoDOT purchased from the two teams that bid on the project, Missouri Bridge Partners and Team United. Each team received a $2 million stipend.

"If we had just simply taken a conventional approach in the very beginning, we could not deliver 802 bridges in five years," he said. "What we have learned over this last two years - and from the approaches of the teams - has given us the knowledge to allow us to tackle this in a different way. ... We have bought their strategies to attack this."

The deal that wasn't

In December, commissioners selected Missouri Bridge Partners - led by San Antonio-based Zachry American Infrastructure - as the "best value" team for the project, which includes at least one bridge in each of the state's 114 counties.

Commission Vice Chairman Jim Anderson said Missouri Bridge Partners brought a proposal to the table in February that was slightly outside the state's budget but otherwise acceptable.

"We did agree to $53 million annually," Anderson said. "We signed the contract, pushed it across the table. They were not able to sign."

Rahn said the Missouri Bridge Partners team was unable to lock in the cost due to rising interest rates that eventually pushed the deal's price tag to between $65 million and $74 million annually. The deal became less palatable with each passing month, he said, adding that MoDOT staff spent countless hours exploring alternative financing options to no avail.

"We kept waiting to see if this was a short-term fluke," Rahn said. "We kept waiting to see if the markets would settle down and things return to normal ... but it just kept getting worse."

Specific financing components employed by Missouri Bridge Partners, such as variable credit swaps and monoline insurance, literally disappeared from the marketplace, Rahn said. Monoline insurers provide guarantees to enhance credit of bond issuers.

Both Rahn and Anderson, who also is president of the Springfield Area Chamber of Commerce, said Missouri's attempt to privately finance the project was the poison pill that killed the deal, although neither official is ready to give up on similar efforts in the future.

"I remain convinced that public-private partnerships are viable," Anderson said. "But sometimes, they're the toughest ships to float."

With a little help from the financial markets, MoDOT would have awarded the contract to Missouri Bridge Partners and bridge work would be under way, Rahn suggested. "It's not only feasible, it can be affordable with credit-stable markets," he said.

Lining up

David Jarvis had mixed feelings about the first incarnation of the 800 Bridges project.

Jarvis, a project manager at Springfield-based Great River Engineering, was glad to see MoDOT embark on the much-needed repairs, but he was troubled by the fact that Missouri-based engineering firms might not see much work from the project.

The lead engineering firm for Missouri Bridge Partners - California-based Parsons Transportation Group - had planned to do much of the structural engineering design work at its offices outside Missouri.

"A lot more people will be able to get their hands on design work," he said. "Based on the old program, most of the engineering firms in the state were looking at a drought for the next five years."

On the flip side, Missouri-based bridge contractors who had been jockeying for work in their parts of the state have been dealt a new hand. Larry Burk, president and CEO of Burk Bridge Co. in Brookline, said he had corresponded with Missouri Bridge Partners about subcontracting for bridge work in southwest Missouri.

"I really don't know what will happen now," Burk said, adding that the first batch of bridge projects could go out for bid before year's end. "We'll look at them and bid them, and we'll partner if we can."[[In-content Ad]]