II Southeast: Georgia optimistic for PPPs

Public-private partnerships definitely have a future in Georgia, but for now the Georgia Department of Transportation is staying focused on successfully delivering the first project of this sort, the West by Northwest corridor improvement.

This was the message delivered at the Infrastructure Investor: Southeast forum by Georgia Department of Transportation Commissioner Vance Smith as he held up a press release announcing that the state cleared all three teams of respondents to its request for qualifications to continue bidding on West by Northwest.

The West by Northwest is a major corridor improvement in the metropolitan Atlanta area that will add about 40 miles of tolled lanes to several highways in the city’s west and northwest suburbs.

Vance Smith

The project is one of about 17 projects within six areas Smith submitted to Georgia’s board of transportation last year as potential public-private partnership (PPP) candidates.

“We’re going to be going there,” Smith said of the other projects, “but we want to make sure that this first one’s successful.”

Smith added that the development of a PPP market in the state overall is “moving along very good”, though previous attempts have not been as successful. In 2003 Georgia passed a PPP law that only resulted in a series of unsolicited proposals and not a single signed, delivered project.

“We passed legislation that said, ‘hey, we need to go the unsolicited route,’” Smith said, referring to the 2003 law. He added that he personally voted for the measure while he was a member of the Georgia House of Representatives.

We want to make sure that this first one's successful Vance Smith

“Was it a mistake? Well, maybe for Georgia. It must have been because we changed the way we’re doing business,” he acknowledged. In 2009, Georgia passed its current PPP law, which requires that all projects be solicited by the state.

Smith said he was optimistic that PPPs will play a role in the way his state delivers its transportation projects, not least because there’s just not enough money in Georgia’s transportation budget to do it all on its own. This year, the transportation budget has $840 million of gas tax revenues, as opposed to about a billion the year before, according to Smith.

In the past, when county officials asked the state for transportation dollars, ‘it was said to them – and I was a former county commissioner – ‘Just put that road on the list. We’re going to pave that road for you – $150 million, $200 million, whatever it is – we’re going to fix your county up,’ Smith said.

“Nowadays, it doesn’t work like that anymore because the funds just aren’t there. So we have to build up a partnership to work on those projects,” he added. To help foster such partnerships, last year Georgia created a dedicated PPP division within its department of transportation.

Smith said the PPP division will soon have a new head. Earl Mahfuz, the former head, retired recently from the department and went to work for Wilbur Smith Associates, an engineering consulting firm based in South Carolina. An announcement on his replacement is expected this week.

The new head will likely be greeted with a full list of to-dos, including one-on-one meetings with the three project teams bidding for the West by Northwest. Three teams led by VINCI, Meridiam, and ACS are competing for the $2.3 billion project.

A request for proposals for West by Northwest is expected to be issued this fall.