The Los Angeles County Metropolitan Transportation Authority’s long-planned, costly, and complex rail line, which would be a novelty for a public-private transportation partnership, is gathering pace.
The Sepulveda Transit Corridor is a planned rail line connecting the San Fernando Valley with the west side of Los Angeles via the Santa Monica Mountains and eventually Los Angeles International Airport. The corridor would be an alternative to Interstate 405, a 14-lane freeway that is believed to be one of the busiest in the country. The agency is considering proposals for a monorail or heavy-duty train that would run at least partially underground.
It is estimated that the price for both options is around $ 10 billion. The completion date for the full line is 2057, although the agency is hoping the use of a public-private partnership could speed up the schedule. Metro, which has been planning the project for at least 10 years, calls it one of the country’s most ambitious transit projects and says it would reduce greenhouse gas emissions, provide jobs for residents and provide a much-needed car alternative to the region.
The agency started the environmental assessment phase late last year and is open to public comments until next month.
The rendering shows a monorail that runs along the median of the I-405. LA SkyRail Express is developing three proposals, each with a monorail.
metro
Bonds are likely to be issued at some point, and Metro officials said they also hope to tap funding in the newly passed Infrastructure Investment and Jobs Act.
The mega-project is the first time that a US traffic authority has implemented a so-called progressive or pre-development agreement (PDA). The agreement enables a government to bring in a private partner early on to help plan a project, identify risks, and establish a budget while conducting environmental reviews and approvals.
Metro entered into PDAs with two consortia developing competing options last February.
After completion of the PDAs, the agency will either issue a tender for a full P3 or reject the development of the project as a P3.
LA SkyRail Express, which includes John Laing Investments Limited and BYD Transit Solutions LLC, will develop three monorail concepts.
Sepulveda Transit Corridor Partners-Bechtel, which includes Bechtel Development Company, Inc., Meridiam Sepulveda, LLC and American Triple I Partners, LLC, will develop competing heavy rail concepts.
Sepulveda Transit Corridor Partners-Bechtel develops heavy rail concepts that run at least partially underground and include stations, like this one on Ventura Boulevard.
metro
While Metro isn’t required to chase a P3, the agency says their goal is to work with the PDA teams to develop a project that can be built, operated and maintained by a private sector partner.
Developed as the P3, Sepulveda would be only the third use of a non-traditional procurement project in US transit. The other two were the Denver Eagle FasTracks project and the Purple Line light rail project in Maryland, both of which faced delays and problems.
“There is pressure to show that these P3 projects can be successful,” said Baruch Feigenbaum, senior managing director of transportation policy at the Reason Foundation.
Metro CEO Phillip Washington, who left the agency last year, was seen as a supporter of P3s and launched the agency’s unsolicited proposal policy, which encouraged private companies to send the agency ideas for various capital projects. In this way, Metro decided to create a PDA for the Sepulveda pass, the agency said.
“There aren’t many natural P3 advocates in the transportation world,” said Feigenbaum. “So this could be one of the few ways in the foreseeable future to get such a project up and running.”
The P3 Sector “is definitely watching procurement because the project is very large and the question will be whether this is going well because the other two didn’t go so well,” said John Medina, senior analyst at Moody’s Investors Service Global Project & Infrastructure Finance Group. “People are looking for a model that works on the go.”
Canada has embarked on several light rail projects in the past five years, but they have also faced problems, Medina said. “You rarely find a rail project that didn’t have any problems,” he said.
Sepulveda would be the agency’s first P3, though it is considering the structure for two more projects, said Dave Sotero, project spokesman for Metro.
The agency is also considering a P3 for a “small portion” of the East San Fernando Valley Light Rail Transit Project and for the West Santa Ana Branch Corridor Project, a light rail line in southeast LA County, Sotero said.
“Because Metro has the largest capital program in North America, we are carefully reviewing all potential project delivery methods, including P3s, for future projects,” he said.
If Sepulveda Pass is developed as a P3, the agency would likely use an availability payment structure as the project would not generate enough revenue to take advantage of the revenue risk structure more common with toll concessions, Feigenbaum said.
“Transit projects involve more risks than we see in the motorway sector,” he said.
The availability payments would likely be backed by Measure M’s sales tax revenue, he added.
The two private teams will produce cost estimates, feasibility studies and engineering analyzes as the project goes through the environmental assessment and approval process.
The PDA is designed to help Metro avoid some risks while the ambitious and complex project is tackled, Medina said. “It will definitely result in better risk allocation,” said Medina. “Now you can have these discussions before you hit a number, and knowing that, you can go into it now rather than later.”
The project is funded in part by Measure M, a transportation sales tax measure approved by LA District voters in 2016. The plan provides $ 5.7 billion for the Valley-Westside segment of the corridor and another $ 3.8 billion for the extension to LAX.
While they said credit was likely to play a role in the project, Metro officials said it was too early for details. The financing plan “contains assumptions about the income of the federal, state and local governments,” said Sotero. This includes discretionary grants, which Metro must secure through a competitive process. “The $ 1.2 trillion infrastructural investment and jobs bill signed by President Biden could potentially provide funding for this project,” he said.
As part of measure M, it is forecast that the corridor will open to the west side between 2033 and 2035. The extension to LAX would open until 2057.
The PDAs give the private teams the opportunity to conclude an implementation agreement for the implementation of the project, if the proposal of this team – after it has been refined in the entire PDA – is selected by the management board of Metro as a so-called Locally Preferred Alternative. This decision is expected to be made around 2025. Metro would then issue a tender for the P3 proposal.
LA SkyRail Express’s proposal is a total cost of capital of $ 6.1 billion in 2020 and $ 63 million per year in operating expenses in 2035. The team is developing three alternatives, all of which are one of the world’s few uses of driverless Have monorail technology built as the crow flies primarily along I-405. Metro has agreed to pay the team $ 63.6 million under the PDA to further develop the offering.
Metro’s PDA with Sepulveda Transit Corridor Partners-Bechtel costs $ 69.9 million. The company’s proposal is $ 10.8 billion in capital costs and $ 118 million per year in operating costs. Its heavy rail alternatives would require extensive tunneling as at least 60% of the journey would be underground.
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