Project Delivery
After SR 400 Sticker Shock, Georgia Sweetened Competitors' P3 Deal
More than a year after it postponed the project because of high costs, the Georgia Dept. of Transportation last month shortlisted three teams for 16 miles of express lanes to be added along State Route 400 in and around Atlanta.
The shortlisted teams competing to be selected as concessionaires include engineering companies Parsons Transportation Group, Arcadis and Stantec Consulting Services, and contractors Ferrovial, Acciona and Halmar International. (See below for the full teams).
The real test will come next year when the teams submit final prices.
GDOT sweetened the deal for the finalists, switching from an availability payment type of public-private partnership, where payments are made to the concessionaire based on the lanes being available to the public, to a revenue risk P3, where payments will be linked to the tolls that the winning bidder sets and collects for 50 years.
The "evolving commercial terms," as GDOT described it earlier this year, include relief and compensation for conditions different from geotechnical boring data, risk-sharing for costs of core construction materials, relief and compensation when utility owners fail to cooperate and cutting the developer's risk in right-of-way acquisition.
The scope for the SR 400 express lanes project remains mostly the same as in the previous procurement. GDOT awarded a separate $55.1-million contract to upgrade three bridges in the corridor earlier this year to C.W. Matthews Contracting Co. and Infrastructure Consulting & Engineering.
In addition to constructing two tolled express lanes in each direction from the Interstate-285 perimeter north through Fulton and Forsyth counties, the winning team will also advance plans for a four-station bus rapid transit line that will operate through most of the corridor.
A GDOT industry forum presentation on the revised procurement held earlier this year estimated that the SR 400 express lanes will cost between $2 billion and $2.4 billion, with a 72-month construction phase. In addition to the private financing, GDOT will use $125 million in federal transportation grants and $80 million in state transit bonds.
Construction of the express lanes is scheduled to start this year. As it was in the first attempt, the project is structured as a finance-design-build-operate-maintain procurement.
That process yielded only a single responsive bid of $1.8 billion from The Walsh Group and its subsidiary Archer-Western, which GDOT rejected in August 2021 because it exceeded the state’s budget for the project by at least $100 million. The timeline had already been delayed by two years due to the agency's 2019 reshuffling of its proposed P3 project slate.
Shifting Risk Away From Proposers
At the industry forum in March, GDOT's eagerness to relieve potential concessionaires of some risk was evident. Presentation slides state that the agency, after soliciting feedback from potential proposers, "has a focus on putting the 'partnership' back in P3."
The procurement schedule calls for GDOT to release the project’s final request for proposal in March 2023, with bids from finalist teams due the following June and a final selection to be announced by the end of summer.
An agency spokesperson declined to comment further on the process, citing the project’s status as “an active procurement.”
The shortlisted teams are:
- Express 400 Partners, which includes lead engineer Parsons Transportation Group and lead contractors Halmar International LLC; Shikun & Binui-America, Inc.; and FCC Construccion, S.A.
- Georgia Express Link Partners, with lead engineer Arcadis U.S. Inc., and lead contractor Ferrovial Construction US Corp.
- SR 400 Peach Partners, which includes lead engineer Stantec Consulting Services and lead contractor Acciona Construction USA Corp.
