Georgia’s first public-private partnership to be financed with a tax-exempt bank loan, the I-285/SR 400 interchange reconstruction, has received a notice to proceed. North Perimeter Contractors (NPC) won the contract in early April to reconstruct the I-285/SR 400 interchange north of Atlanta for the Georgia Dept. of Transportation (GDOT) as a design-build-finance (D-B-F) project. NPC’s team includes Ferrovial Agroman US Corp. as lead contractor and the Louis Berger Group and Neel-Schaffer Inc. as designer-engineers.
GDOT’s original estimate of the cost of the project was $1.1 billion. GDOT was able to reduce the total project cost to $803 million, including right-of-way acquisition, preliminary engineering, conceptual designs, environmental studies, and other costs, partly because of NPC’s bid of $458 million for construction.
“Their bid was significantly lower than our original estimate,” says Albert “Butch” Welch, program manager at GDOT. “That’s because they found efficiencies across the board. In every area that we evaluated, they found efficiencies that the other teams did not, on top of the fact that they just had more creative and flexible financing.”
“There wasn’t one magic solution” that enabled NPC to reduce construction costs, adds Daniel Filer, a vice president of business development at Ferrovial Agroman US Corp. “It was a combination of a whole lot of little things,” including good communication with GDOT. All the bidders could take advantage of gap financing, says Filer, “but how much you engineer that financing can really make a difference.”
“We secured a tax-exempt bank loan for the total investment of up to $458 million,” adds Filer. “The loan matures in 2022, while the construction is scheduled to take four years, or until 2020.”
Filer declined to give further details about the bank loan, citing competitive advantage and nondisclosure agreements with Bank of America, which agreed to make the loan. “Essentially, the financing is structured such that a bond instrument is included to qualify the bank debt as tax-exempt.”
Officials believe this is the first time a tax-exempt bank loan has been used to finance a D-B-F P3 in America.
The interchange of I-285 running east-west and State Route 400 running north-south handles more than 400,000 vehicles a day in north suburban Atlanta. “The maintenance of traffic is a huge issue on this job,” says Welch. “It was one of the criteria that we used in the selection of the best-value proposer.”
Filer agrees that maintenance of traffic will be one of the biggest challenges on the project, and keeping the public informed will be critical. Ferrovial will draw on experience with the $2.5-billion LBJ Freeway P3. “One of our very effective tactics in the Dallas-Fort Worth area,” he says, “was a combination of the different social media platforms and also apps that we developed.”
New barrier-separated collector-distributor lanes along I-285 and along SR 400 will remove conflict points from the existing main lanes, which will flow freely. The project also includes new flyover bridges, reconstruction of existing ramps, and widening of existing bridges within the interchange. Braided ramps will be constructed in the vicinities of Ashford Dunwoody Road and Roswell Road to eliminate conflicts with traffic entering and exiting SR 400 from those roads. Also, the SR 400/Abernathy Road interchange will be converted into a diverging diamond.
GDOT estimates that the improvements will save the average commuter eight hours a year.
Under the design-build method, every component of the project is open to revision until it is actually constructed. “The reality is that there are elements of the project that are 100 percent designed,” Filer says, “but that doesn’t mean that we won’t go back and redesign them if we think that some efficiencies can be made.”
NPC expects to begin heavy construction activities later this year and complete the project in mid-2020.