The Los Angeles County Metropolitan Transportation Authority has awarded a combined US$134 million through pre-development agreements for rail projects. The award was given to two private-sector teams for the US$9.5 billion Sepulveda Transit Corridor Project in a move it says is a first-of-its-kind public-private model. Los Angeles Metro awarded STCP-Bechtel US$69.9 million and LA SkyRail Express US$63.6 million to further advance heavy rail and monorail concepts, respectively, to link the San Fernando Valley and L.A.’s Westside, and eventually, Los Angeles International Airport. The announcement comes after major contractors have shared their hesitation about the risks involved in several high-profile public-private partnerships in recent years; most notably, the Washington, D.C. Metro system’s US$5.6 billion Purple Line extension ran into numerous cost overruns and led to partners pulling out of the venture.
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L.A. Metro’s PDAs with the two teams working on concepts for the Sepulveda project aim to avoid that type of acrimony by involving multiple stakeholders early in the process while leaving plenty of space for the project owner. For example, Metro stressed in the statement that it isn’t obligated to continue working with either team and said that the teams being paid to advance their concepts now could submit bids on the final project, but that doing so isn’t guaranteed.
At the same time, because both teams are being paid for their work upfront, Metro will own the concepts and plans they produce, whether the groups are selected for the final project or not. With the overall project broken down into six phases, that means there are also plenty of exit opportunities for the project owner. Yousef Salama, an associate director at infrastructure consultant Turner & Townsend, said the PDA is designed to foster competition between the two concept team while bringing subject matter expertise into the process much earlier than is traditional.
