Transit projects inevitably take a long time to move from the planning stage to contract award. The private sector, because of the requirements of investors, needs to move as expeditiously as possible to final design and construction. As noted above, private partners in transit projects are generally unwilling to commit private capital to projects requiring supplemental government investment until the government funding is assured. As a result, the cost and time required for a transit project to navigate FTA's detailed review process tends to discourage private investment.
The process of bringing fixed guideway transit projects to the point of contract award involves many steps, including an alternatives analysis, the environmental clearance process under NEPA, preliminary engineering, final design, the Full Funding Grant Agreement process, right-of-way (ROW) acquisition, and the contracting process.
Each of these steps involves a number of different activities, and are subject to a variety of FTA requirements with respect to sequencing and methodology. For example, the alternatives analysis (including all of the project justification activities such as analysis of mobility improvements and cost-effectiveness) must be completed, with the project receiving an overall satisfactory rating, before a request to enter preliminary engineering may be submitted to FTA. Preliminary engineering cannot conclude, and a request to enter final design cannot be submitted to FTA, until the NEPA process has culminated with a ROD or a FONSI. In addition, the formal FFGA application process and ROW acquisition cannot commence until the NEPA process has been completed and FTA has issued a ROD or FONSI.31
FTA mandates that many of these activities have what is called in critical path method scheduling "finish-to-start" relationships; that is, a predecessor activity must by completed before a later activity may be started, effectively prohibiting concurrent work on these activities. FTA implemented these requirements as a part of its effort to ensure that projects pass rigorous evaluation before they receive grant funding. Still, the net effect of such rigid relationships is to slow the process.
The definitive terms set forth in the Pilot Program Notice provide several means to accelerate reviews and funding commitments for the selected Pilot Projects. These include the ability to obtain concurrent approval of the project into preliminary engineering and final design.32 In addition, the guidance provides for the early issuance of Letters of No Prejudice (or other assurances) "to accelerate commencement of pre-construction services and planning."33 Letters of No Prejudice are used by FTA to allow projects that have not yet obtained a FFGA to proceed with certain pre-development activities and, once the FFGA is executed, costs properly expended may be reimbursed with grant funds.
Finally, the guidance for the PPP Pilot Program allows the parties to negotiate on a case-by-case basis for streamlining of the project development process, and the opportunity for the private partner to earn higher returns in exchange for assuming the risk associated with achieving the cost estimates and/or ridership projections put forward.34
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31 See FTA guidance, Introduction to New Starts, http://www.fta.dot.gov/planning/newstarts/planning_environment_2608.html, pp. 2-4. See also, http://www.fta.dot.gov/planning/newstarts/planning_environment_2598.html and http://www.fta.dot.gov/planning/newstarts/planning_environment_2599.html.
32 Pilot Program Notice, section 3(i)(i)(C).
33 Pilot Program Notice, section 3(i)(i)G).
34 Pilot Program Notice, section 3(i)(i)(I).