Louisiana encounters construction problem with its first P3
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Louisiana has encountered a problem with
“Although this is a setback, there is not — and never has been — any impact on the safety and integrity of the main bridge structure,” the update said.
“The delay is obviously a problem but it doesn’t mean that a P3 was the wrong move,” said Joseph Krist, publisher of Muni Credit News. “Those who dislike P3 projects will find something to seize on and supporters of P3 projects and find things to reflect positively on them. The problem seems to be identified, a fix is available, and the P3 structure has provided a way to address it.”
The situation “highlights the whole purpose behind liquidated damages or other professional penalties,” Krist said. “The operator has lots of incentives to fix things.”
Connick told The Bond Buyer just because there is a delay in the Belle Chasse bridge’s opening, that doesn’t mean P3s are bad.
“We have
The new Belle Chasse Bridge is intended to replace a 56-year-old lift bridge and 68-year-old tunnel that carried about 35,000 vehicle trips a day.
About 92% of the construction on the bridge project was complete as of the August hearing. The southbound lanes of the new bridge opened in June but as of September just one of the two lanes was fully open. The tunnel has closed. The old bridge’s northbound lanes are currently being used.
At the hearing Donahue said his staff told him, “The soil down there is like peanut butter,” contributing to the subsidence problem. The developer has brought in an outside consultant to try to determine the subsidence’s cause.
When the state approved the P3 for the new bridge in 2019, financing was said to be coming from five sources. There would be a $53 million toll revenue bond, $12 million of Garvee bond proceeds secured by future federal grants, $26 million in federal highway funds, $45 million in federal Infrastructure for Rebuilding America grants, and $12 million from the state’s regional planning commission.
The state sold the bonds to cover the $12 million as part of a
It’s unclear if the developer is using the toll revenue bonds or some other form of financing. The project does not appear on the U.S. Department of Transportation Build America Bureau
When Plenary spokesperson Noote was asked about these bonds she said she couldn’t provide any information.
The Bond Buyer asked the state Department of Transportation and Development about the bonds but didn’t receive a response.
The state’s first P3 project at Belle Chasse was a stepping stone toward the much larger P3 project for a new Calcasieu River Bridge in southwest Louisiana.
In contrast to the locally oriented Belle Chasse project, the Calcasieu River Bridge carries Interstate 10, a key national artery.
The Louisiana Public Facilities Authority sold $1.32 billion of private activity
Plenary has a 40% stake in the Calcasieu project while Sacyr Infrastructure and Acciona Concesiones each hold 30% stakes.
Construction of the Calcasieu River Bridge is planned in four segments, with the first to be completed in late 2029 and the last in fall 2031. Partial acceptance and tolling are expected to commence in August 2031.
