The anticipated benefits of the Pilot Program for New Starts and other kinds of fixed guideway projects are listed below:
• For New Starts Projects:
- Adjustment in Construction Engineering and Inspection (CEI) by excluding 100% of equity capital and 50% of development proceeds (subject to OMB approval)
- Adjustment to project justification by adjusting weighting of CEI and land use (subject to OMB approval)
- Concurrent approval in to PE and Final Design
- Elimination or limitation of FTA risk assessments (negotiated on a case by case basis)
- Elimination or limitation of FTA User Benefit review subject to private acceptance of risk on terms satisfactory to FTA
- Issuance of letter of intent subject to availability of appropriations
- Early issuance of Letters of No Prejudice to accelerate pre-construction services and planning
- Flexible use of program income as permitted by FTA
- Incentives to contractors as negotiated with FTA:
○ 7FCo Earlier approvals
○ Higher returns in exchange for assumption of risk related to cost and ridershi007
○ Projects rated medium or higher (overall and cost-effectiveness) will be included in President's Budget
• For Projects Receiving Formula Funds (Non-New Starts Projects):
- Procedural and substantive benefits negotiated with FTA
Through this PPP Pilot Program, FTA is seeking to better understand the extent to which the private sector's requirement for a financial return and agreement to assume risk for costs and benefits may permit FTA to relax requirements or accelerate approvals for New Starts projects. In particular, when risks are allocated to a private partner, the Pilot Program will help FTA determine the extent to which it can rely on commercial due diligence, financial incentives, and potential liabilities rather than relying solely on FTA's established procedures for risk evaluation and due diligence under the existing New Starts review process.