Going Public-Private on U.S. 1

FDOT’s First Unsolicited Public-Private Partnership Gets Started

By Debra Wood

A contractor-initiated public-private partnership will speed construction of safety improvements on U.S. Route 1, along a section of the “18-Mile Stretch” in Miami-Dade County by four years and ultimately save the state about $2 million.

The Florida Department of Transportation and Community Asphalt of Hialeah, Fla., a subsidiary of OHL of Spain, executed in February a $110.9 million, 1,095-day contract to design, reconstruct and finance the 11 mi-long project, extending from Mile Marker 116 to SW 344th St. in Florida City. Construction began in March and is scheduled for completion in 2010.

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A number of people die in vehicle accidents along the 18-Mile Stretch each year. From 1997 through 2001, there were 29 fatalities, 38 serious life-threatening injuries and a total of 363 injury-related crashes, resulting in 832 injured passengers, according to FDOT.

The project will add one travel lane in each direction; construct a 32-in concrete median barrier to help prevent head-on collisions; and build a 6-ft inside shoulder in both directions, a 10-ft outside shoulder southbound and a 12-ft outside shoulder northbound, with 10-ft of the latter paved so it can be used as a travel lane during hurricane evacuations.

“It allowed the department to deliver this safety project earlier, thus saving lives with the substantial safety elements that these construction projects will implement,” says Teresa Alvarez, manager of special projects with FDOT’s Consultant Management Office, in an emailed response to questions.

The improvements were originally programmed as five jobs, with the final segment set to begin construction in 2013. FDOT will pay Community Asphalt for the work with funds as they were originally allocated for each year during the multiphase schedule, says FDOT spokesperson Brian R. Rick.

The contract includes an opportunity for the company to earn a $1.9 million bonus, though it could face liquidated damages of $33,078 per day for a late finish. The project also entails creating water-quality berms to capture stormwater runoff, replacing the 250-ft canal C-111 bridge with a new concrete structure, and making other hydrologic and environmental improvements.

After receiving Community Asphalt’s proposal, the state advertised for other bidders and did not receive any competing proposals. It negotiated for months with Community Asphalt before closing on the deal.

“It was nine months of complex negotiations,” says Lauro Bravar, president of OHL USA, shortly after receiving the contract. “It took a lot of creativity to set up everything,”

Community Asphalt was working on another $41 million contract on the “18 Mile Stretch” in Miami-Dade County when its leaders decided to offer the state a proposal for the current section in January 2007.

“We saw an opportunity to continue a job we were already doing and, therefore, have the advantage in reduction of costs of demobilization/mobilization,” Bravar says. “We knew the area. It made a lot of sense.”

Alvarez says Community Asphalt’s work on the other portion of US-1 was not a factor in awarding design-build-finance contract.

“The decision to proceed with the PPP unsolicited was based on cost savings, the ability to deliver a much needed safety project before our scheduled construction dates, and a shorter construction duration,” she says.

Spanish Bank Caja Madrid, a bank with presence in Miami since 2002, provided an upfront loan, which will finance the work with European money. This is OHL USA’s first U.S. public-private partnership financing a project. However, it is a large provider of concession services in Spain. It acquired Community Asphalt and The Tower Group, a commercial builder in Davie, in 2006. Bravar expects OHL will pursue more U.S. partnership opportunities.