Louisiana lawmakers scuttle $2.1B bridge P3

A Louisiana congressional committee voted down plans for a $2 billion-plus public-private partnership that would replace an aging toll bridge near Lake Charles, a move that project proponents say will cost the state and provide for few alternatives.

In an 8-6 vote on Tuesday, the Louisiana State Legislature’s Joint Transportation Highway and Public Works Committee struck down a long-debated plan for the replacement of the Calcasieu Bridge with a new toll bridge developed through a P3 led by Calcasieu Bridge Partners, a joint venture of Plenary Americas US Holdings, Inc.

After a three-year competitive process, officials selected a $2.1 billion proposal from the developers to replace the bridge, working to secure $800 million of public funding support in the process.

After debates and questions over the time since the selection of the developers in August, Committee Chair Republican State Senator Patrick McMath, who voted against it, said lawmakers wanted to make sure they “were getting the best value for the citizens of Louisiana and the state.”

Secretary of Louisiana Department of Transportation and Development Eric Kalivoda, who led the selection of the developers, told lawmakers before the vote that the 71-year-old Calcasieu Bridge was in “poor condition” and if it wasn’t replaced, it soon would require a pricey repair project to keep it in service.

Dissolving the P3 arrangement seriously limited the state’s funding options, he said.

Potential alternatives listed by Kalivoda included a design-build pay-as-you-go option to rehabilitate the bridge instead of replacing it, which could extend its life by 30 years, or the establishment of a public tolling authority with work drastically extended over the original seven-year timetable.

Kalivoda said that while his office had aggressively pursued federal funding, the tolls were necessary to carry out the project in a timely manner. The rates selected were in line with other similar development projects across the country, he added.

Lawmakers rejected the proposal, however, with the committee vote falling largely along party lines as Republicans objected to the costs of the project and plans for the use of tolls on motorists to pay construction fees back over a 50-year period.

The P3 proposal expires in December, leaving the door open for its resurrection, but Dale Bonner, a representative of Calcasieu Bridge Partners told lawmakers any delays would make the project rapidly financially infeasible.

Taken along with the effects of inflation on infrastructure costs, renegotiating contracts with vendors “at this point in the game” was not viable and delays would threaten large portions of the public funding backing the work, he said.

Public funding backing the P3 included a $151 million federal mega grant and $150 million of American Rescue Plan Act funding along with $240 million diverted from state vehicle taxes, $100 million from the state’s general fund, $75 million from the federal transpiration trust fund and $84 million of state general obligation bonds that would have been priced in December.

If the project didn’t launch along the planned timeline, federal grants could be withdrawn and the bond issuance affected, Bonner said.

Louisiana’s Republican Governor-elected Jeff Laundry, who won a mid-October race to replace incumbent Democratic Gov. John Bel Edwards, has stated his support for seeking development options other than the P3 for the Calcasieu Bridge.

With the rejection of the plan, Kalivoda said he feared the incoming governor could be “set up for failure.”

“There’ll be a public expectation that the new administration and the new legislator will deliver a toll-free bridge,” he said. “That will cost every legislator across the state projects in their districts.”