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U.S. Department of Transportation U.S. Department of Transportation Icon United States Department of Transportation United States Department of Transportation

Pennsylvania Rapid Bridge Replacement Project, Statewide

Project Overview

The Pennsylvania Rapid Bridge Replacement project will replace 558 structurally deficient bridges throughout the state under a single, “bundled” contract. The bridges included in the project are of a similar size and design, with most ranging from 40 to 75 feet in length, and located in rural regions on the state highway system. Through the bundled approach, the project is expected to significantly reduce costs and accelerate the replacement of the bridges by allowing for prefabrication, mass production, equipment reutilization, and standardization.

Bundling the bridges also allowed the state to establish an attractive, large-scale “project” for private developers. The project is being delivered as a design, build, finance, and maintain (DBFM), availability payment public-private partnership (P3) concession between Pennsylvania Department of Transportation (PennDOT) and a private special-purpose entity called Plenary Walsh Keystone Partners (PWKP).  The concession company will receive periodic payments from the state in exchange for making the bridges available to the traveling public over a period of 25 years, following a three year construction period.

The concessionaire will be responsible for demolishing the existing bridges, maintaining traffic during construction, and then maintaining the physical condition of the bridges, with PennDOT retaining ownership of the bridges throughout the concession period. While PWKP will be responsible for inspection, maintenance, and ultimate handback of the bridges in a prescribed state of good physical repair, PennDOT will be responsible for day-to-day operation of the bridges, including snow and debris removal and incident response.

The $1.1 billion Rapid Bridge Replacement project is the largest roadway project in the state’s history. It is also Pennsylvania’s first public-private partnership.  This innovative project also represents the first bundling of publically owned roadway facilities under a single P3 contract in the U.S. 

Project History

Pennsylvania has over six thousand structurally deficient bridges, with as many as three hundred additional bridges gaining this designation each year. In 2012, state Act 88 provided enabling legislation allowing PennDOT to pursue P3 projects, providing the Department with the possibility of using P3 strategies to bring its deficient bridges into a state of good repair.  One year later, lawmakers passed Act 89, which increased annual state highway funding to $2.5 billion by restructuring the state’s gas tax and increasing a variety of fees, which provided a stream of revenues that could be used by PennDOT to support major, multi-year undertakings.  PennDOT then set out to take advantage of the new legislation and revenue by structuring a P3 procurement that involved the bundling of like bridges. 

From a pool of approximately 2000 deficient bridges, PennDOT selected 558 bridges that could be readily replaced and which met specific size, design, and environmental clearance requirements – creating a bundle of like projects.  If for some reason, a bridge in the portfolio does not prove to be a good candidate for rapid replacement (e.g., because of unforeseen environmental issues), it will be immediately pulled from the bundle and replaced with another pre-selected bridge.

Additionally, PennDOT helped to accelerate the construction of the program by completing the required environmental approvals, permits and right-of-way acquisitions for approximately 82 bridges while it went through the procurement process.  Known as the Early Completion Bridges, estimated completion of these bridge replacements is anticipated in the first year of the project. Meanwhile, during the first year of the concession period, the private development partner will complete the required environmental documentation work (excluding approvals) for the 476 Remaining Eligible Bridges.

Following an industry forum, PennDOT issued a request for qualification to prospective bidders in December 2013. After announcing a shortlist of four teams for the Rapid Bridge Replacement procurement in early March 2014 and issuing a final request for proposals that August, PennDOT awarded the P3 concession to PWKP, a consortium led by Plenary Group, an Australian P3 developer, and Walsh Group, a large American construction company, In October 2014.

Because USDOT provided PennDOT with a private activity bonds allocation, the project must meet all Federal-aid requirements. The USDOT worked with PennDOT to federalize the project, using its new P3 policy.  Additionally, PennDOT negotiated waiver from the Federal Highway Administration (FHWA) relating to application of the Federal design-build rule, through a special experimental program, that allows PWKP to complete a significant portion of the environmental documentation work for most of the bridge replacements. 

The project reached commercial close in January 2015 and financial close in March 2015. PWKP started construction in May 2015, and completion of the entire project occurred in late 2019.

Project Financing and Delivery

Financing for the Pennsylvania Rapid Bridge Replacement Project includes a combination of debt and equity raised by PWKP. The primary source of financing for the project is $794 million in proceeds from tax-exempt private activity bonds (PABs). The PABs issue—the largest PAB issuance in the history of the Federal PAB program—was well-subscribed, and priced at a significant premium. The PABs were issued in tranches with maturities ranging from 4 to 28 years, and are backed by milestone and availability payments that the private partner will receive from PennDOT.

The project financing package also includes $59 million in at-risk, cash equity put up by Plenary Group (80 percent) and Walsh Investors (20 percent). Additional capital costs incurred by PWKP during construction will be covered by periodic milestone payments from PennDOT.

In addition to its milestone and availability payments to the concessionaire, PennDOT expects to directly incur $132 million in costs for project management, preliminary engineering, right of way, utilities, and other preconstruction costs.