Project: Port of Galveston Cruise Terminal Development |
Location: Galveston, Texas |
Public Partner: Port of Galveston |
Private Partner: CH2M Hill, Royal Caribbean International and Carnival Cruise Lines |
Marketing: Unsolicited proposal submitted by Royal Caribbean and Carnival Cruise Lines with CH2MHill to expand cruise ship service and facilities |
Privatization Structure: Design-Build-Finance PPP |
Legal Structure: Third Party legal entity to hold both the cruise line contracts and the lease with the port |
Financing: Fixed price contract with bridge loan terms to allow fast-track construction of the phased renovation/construction of port facilities to improve cruise line sailings. The "Legal Entity", provided up-front investment of $3 million as a Fixed Contract Price with commercial terms for its return on investment. Through the PPP, the Port conserved its capital funds for other projects and received increased revenues from employment and commercial services. |
Measures of Success: The PPP was able to meet the schedule for the first phase of construction under budget while using the cost savings to fund subsequent project phases and is currently underway with the sixth phase. Additional sailings and expansions made available by this PPP contributed to a 200% increase in travelers in 2002-2003 and 1100% increase compared to the previous three years. In 2004-2005 two additional cruise ships were scheduled to sail out of Galveston. |
In the interest of equality, does the public side accommodate the "making", of infrastructure as in the New Deal's WPA or the Interstate Highway System of the 1950s? Or does government engage the private sector to provide as many goods and services as possible thus reducing its role to a centralized project manager or contract-holder?
Federal Acquisition Regulation (FAR) and the Federal Activities Inventory Reform (FAIR) Act (1998) require public agencies to produce inventories of "commercial activities",-those that are not "inherently governmental", or able to be acquired from the private sector- that may be put up for competitive sourcing.[xiii]