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Wed, Jul

Sepulveda Pass Transit:  Why Is Metro So Secretive About Public Private Partnerships?

LOS ANGELES

[This is the tenth article in a series examining whether Metro can be a trusted steward for the Sepulveda Pass Transit project.]

LA TRANSPO - The fourteenth of my 20 questions to Metro CEO Stephanie Wiggins asked: “What are the general arrangements and parameters for a possible Public-Private Partnership (P3) arrangement with Metro contractors SkyRail and Bechtel? Metro has told the public nothing about potential P3 arrangements that could result in a new and different method for financing the concept selected by the Metro Board.”

Metro responded with another kick-the-can-down-the-road answer: “Metro engaged two PDA teams [Bechtel and SkyRail] to provide innovative ideas and deliverables for Metro’s use in the environmental review process. Right now, Metro is concentrating on completing the environmental review process and identifying the locally preferred alternative. It is important to highlight that the engagement with these teams doesn’t commit us to any specific course of action just yet. Once Metro has identified the locally preferred alternative, we will carefully assess whether partnering with one of these teams for project implementation aligns with our goals, or if alternative avenues would be more suitable. When we get to this point, we will be sure to share all relevant information with the public. Information about Public-Private Partnership delivery method has been included in the FAQs.”

Metro’s answer didn’t provide general P3 arrangements or parameters, and their FAQs provided no useful information: “A PDA is an agreement with a contractor to initiate the development of a project through a public-private partnership model designed to incentivize innovations in design, engineering, construction approach, financing, and operations. The use of a PDA for the Project was approved by the Metro Board of Directors in 2019 …”

It’s now 2024 and Metro has provided zero information about their potential use of P3 financing on the project. The public and the Metro Board need information today to understand the basics and potential risks of financially complex P3s, so all can ask educated questions. From Metro’s answer, they don’t plan to tell the public anything about P3s until they have already selected the preferred Sepulveda Pass alternative they will build. Does this also mean that the Metro Board is going to select the preferred alternative without first considering how they will finance it? This makes no sense.

Metro knows much more about project costs and financing than they have ever told the public. Bechtel and SkyRail submitted proposals to Metro in 2020 including preliminary costs and P3 financing plans based on Measure M cost constraints. Yet Metro never presented this financing information at any public meeting and redacted the P3 financing plans from proposals obtained through California Public Records Act requests. Why is Metro so secretive about P3s?

Today, Metro has paid Bechtel and SkyRail more than $35 million each to design their alternatives, prepare detailed cost estimates, and finalize P3 financing plans. Yet Metro is now telling us they don’t plan to give the public the P3 financing information until after they decide which alternative they will build. Would you buy a house before figuring out how you would finance it? Never! But that is what Metro’s answer to Question 14 tells us they’re doing. I only hope that the Metro Board will be considering the P3 financing information when they make their decision on the preferred alternative they will build. It would be irresponsible and dishonest if they don’t. And if the Metro Board is using the information for their decision, the public has a right to that same information – before the decision – not after it. We want P3 information now!

(Bob Anderson is a nuclear engineer with 50 years engineering and business development expertise in the aerospace and high-technology sectors. He is VP and Transportation Committee Chair of the Sherman Oaks Homeowners Association. Contact him at [email protected].)

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