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OPTIONS ANALYSIS SEPTEMBER 2013 TABLE of CONTENTS

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OPTIONS ANALYSIS SEPTEMBER 2013 TABLE of CONTENTS BRENT SPENCE BRIDGE PROJECT OPTIONS ANALYSIS SEPTEMBER 2013 TABLE of CONTENTS EXECUTIVE SUMMARY ......................................................................................... 1 CONSTRUCTION, OPERATIONS & MAINTENANCE AND LIFECYCLE COSTS ............................. 2 TRAFFIC & REVENUE .............................................................................................................. 3 RISK ANALYSIS ........................................................................................................................ 3 PRELIMINARY ANALYSIS ......................................................................................................... 4 QUALITATIVE CONSIDERATIONS ............................................................................................ 4 NEXT STEPS ............................................................................................................................ 7 1. PROJECT GOALS AND OBJECTIVES .................................................................... 8 1.1 STUDY OBJECTIVE ......................................................................................................... 8 1.1.1 STUDY PARTICIPANTS AND ADMINISTRATION ......................................................................... 8 1.1.2 THE BI-STATE MANAGEMENT TEAM’S PROJECT GOALS........................................................... 8 1.1.3 PROJECT COSTS ......................................................................................................................... 8 1.1.4 CONSIDERATION OF ALTERNATIVE DELIVERY METHODS ......................................................... 8 2. STATEMENT OF NEED .................................................................................... 10 2.1 DESCRIPTION OF CURRENT BRIDGE CROSSING .......................................................... 10 2.1.1 CONGESTION ........................................................................................................................... 10 2.1.2 SAFETY ..................................................................................................................................... 11 2.1.3 GEOMETRY .............................................................................................................................. 11 2.2 DESCRIPTION OF LOCAL ACTIONS TAKEN TO ADDRESS INVESTMENT NEED .............. 11 3. PROCESS OVERVIEW ...................................................................................... 12 3.1 INTRODUCTION ........................................................................................................... 12 3.2 SUMMARY OF OPTIONS ANALYSIS PROCESS .............................................................. 12 3.3 WORKSHOP STRUCTURE ............................................................................................. 13 Options Analysis i TABLE of CONTENTS 3.3.1 PRACTICAL DESIGN AND VALUE ENGINEERING WORKSHOP RESULTS .................................. 13 3.3.1.1 Pier Spacing ............................................................................................................................ 13 3.3.1.2 Bridge Type ............................................................................................................................ 15 3.3.1.3 Replacement of Superstructure ............................................................................................ 16 3.3.2 TOLLING WORKSHOP .............................................................................................................. 17 3.3.3 FINANCIAL WORKSHOP ........................................................................................................... 19 3.3.4 RISK WORKSHOP ..................................................................................................................... 19 3.4 OVERVIEW OF PROJECT DELIVERY OPTIONS ............................................................... 19 3.4.1 PROJECT DELIVERY OPTIONS .................................................................................................. 19 3.4.1.1 Design-Bid-Build (DBB) .......................................................................................................... 20 3.4.1.2 Design-Build (DB) ................................................................................................................... 21 3.4.1.3 Design-Build-Finance-Operate-Maintain (DBFOM) – Availability Payments ......................... 22 3.4.1.4 Design-Build-Finance-Operate-Maintain (DBFOM) – Revenue Concession .......................... 23 3.4.2 GATHERING PROJECT INPUTS ................................................................................................. 24 3.4.3 CONSIDERATION OF RISK INPUTS ........................................................................................... 25 3.4.4 REQUEST FOR INFORMATION ................................................................................................. 26 3.5 DELIVERY MODELS TO BE ANALYZED .......................................................................... 29 4. COST ASSUMPTIONS ...................................................................................... 30 4.1 COST INPUTS ............................................................................................................... 30 4.1.1 BASE CONSTRUCTION COSTS .................................................................................................. 31 4.1.1.1 Cost Assumptions .................................................................................................................. 31 4.1.1.2 Cost Estimates ....................................................................................................................... 31 4.1.2 RIGHT OF WAY COSTS ............................................................................................................. 32 4.1.2.1 Cost Assumptions .................................................................................................................. 32 4.1.2.2 Cost Estimates ....................................................................................................................... 32 4.2 ROADWAY AND TOLLING OPERATIONS AND LIFECYCLE COSTS .................................. 33 4.2.1 COST ASSUMPTIONS ............................................................................................................... 33 4.2.2 COST ESTIMATES ..................................................................................................................... 35 4.2.3 FINANCING ASSUMPTIONS ..................................................................................................... 37 4.2.3.1 TIFIA Assumptions ................................................................................................................. 38 Options Analysis ii TABLE of CONTENTS 4.2.3.2 Discount rate assumptions for risk adjusted cash flows ....................................................... 39 4.2.3.3 Discount rate assumptions for non-risk adjusted excess cash flows .................................... 39 5. TRAFFIC & REVENUE STUDY ........................................................................... 41 5.1 REVENUE INPUTS ........................................................................................................ 41 5.2 HISTORIC TRAFFIC ON THE BRENT SPENCE BRIDGE .................................................... 44 5.2.1 TRAFFIC COUNTS ..................................................................................................................... 44 5.2.2 VALUE OF TIME ....................................................................................................................... 46 5.3 TRAFFIC AND REVENUE FORECASTS ........................................................................... 47 5.3.1 FORECASTS/DIVERSION .......................................................................................................... 47 5.3.2 REVISED TRAFFIC AND REVENUE FORECASTS......................................................................... 52 6. RISK ANALYSIS ............................................................................................... 53 6.1 APPROACH TO RISK ANALYSIS .................................................................................... 53 6.2 INDIVIDUALLY QUANTIFIED RISKS ............................................................................... 53 6.2.1 DETERMINATION OF LIKELY COST IMPLICATIONS FOR EACH RISK ........................................ 53 6.2.1.1 Allocation of Identified Risks ................................................................................................. 55 6.2.1.2 Other Adjustments ................................................................................................................ 56 6.3 DELIVERY MODEL INNOVATION AND EFFICIENCY SAVINGS ....................................... 57 6.3.1 DETERMINATION OF INNOVATION AND EFFICIENCY SAVINGS .............................................. 57 6.4 UNDERLYING ASSUMPTIONS ...................................................................................... 61 7. PRELIMINARY QUANTITATIVE ANALYSIS ........................................................ 62 7.1 OVERVIEW .................................................................................................................. 62 Options Analysis iii TABLE of CONTENTS 8. SUMMARY OF FINDINGS ................................................................................ 64 8.1 QUANTITATIVE RESULTS ............................................................................................
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