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Detroit River International Crossing (DRIC) New International Trade Crossing (NITC). Briefing for the Transportation Border Working Group November 8, 2012. Windsor-Detroit Trade Corridor: Critical for Canada’s Economic Security . Canada’s Busiest Crossing

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Presentation Transcript
slide1

Detroit River International Crossing (DRIC)

New International Trade Crossing (NITC)

Briefing for the Transportation Border Working Group

November 8, 2012

slide2

Windsor-Detroit Trade Corridor:

Critical for Canada’s Economic Security

  • Canada’s Busiest Crossing
    • $126 billion of two-way surface trade – 28% of total Canada-U.S. trade
    • Over 220,000 jobs in the region depend on this border crossing
    • Consists of four crossings: Windsor-Detroit tunnel, Ambassador Bridge, truck ferry and Canadian Pacific Railway tunnel

Ambassador Bridge carries a third of Canada-U.S. truck traffic

-1-

slide3

Rationale for the Project

  • Corridor is facing capacity challenges
  • Inadequate direct highway access (through central Windsor) and customs facilities
  • New bridge a key priority for shippers and manufacturers
  • Only major Ontario-U.S. crossing without significant redundant capacity for truck traffic
slide6

Policy: Canada-Michigan Crossing Agreement, June 2012

  • Framework for each party’s roles and responsibilities
  • Project funded and delivered by Canada—no cost to Michigan
    • US responsible for its customs plaza
  • Buy America waiver to use only Canadian & American iron and steel
  • Requires U.S. Presidential permit to become effective in U.S.

“an investment in the future of the North American economy”

—Prime Minister Harper

slide7

State of Michigan(Governor)

Government of Canada

Michigan Strategic Fund

Michigan DOT

International Authority

Windsor-Detroit Bridge Authority

Concessionaire

Policy: Governance Structure

policy crossing agreement
Policy: Crossing Agreement
  • Windsor Detroit Bridge Authority responsible for management and procurement
    • Responsible for delivery of project on behalf of Canada and Michigan
    • Conducts procurement process and enters into contractual agreement with concessionaire
    • Oversees construction and manages operation of the crossing
    • Vehicle to flow Canada’s investment to project
  • Windsor-Detroit Bridge Authority created October 2012
    • Approved by the Prime Minister – Canadian Crown corporation with 1 interim director
    • Complete Authority to be established in 2013 – 5 directors
  • International Authority reflects shared governance
    • 50/50 participation – 3 Canadian and 3 Michigan members (after Authority fully established)
    • Approves procurement process and final agreement
slide9

SECRET

Legal: Bridge to Strengthen Trade Act

  • Introduced in October 2012 as part of the Budget Implementation Act II
    • Exempts DRIC construction from requiring certain permits, approvals or authorizations under a number of federal laws
      • Clarifies corporate governance issues and provides minor amendments to the International Bridges and Tunnels Act
  • Provides certainty to private sector bidders that the project will not be delayed or stopped by frivolous lawsuits on the Canadian side
  • DRIC must meet all obligations under relevant federal legislation pertaining to fisheries, species at risk and navigation
  • DRIC must comply with the commitments made in the federal environmental assessment report

9

slide10

InternationalAuthority

Michigan

  • Canada

Canada

Michigan

Funding/Payments

Provides assistance as requested by the Crossing Authority

Approvals/oversight as per the Crossing Agreement

Windsor-Detroit Bridge Authority

Canadian Port of Entry

MIPOE

U.S.POE

Bridge

I-75 Interchange

Financial: Procurement Structure

financial timelines
Financial – Timelines
  • Budget 2007 confirmed Canada’s intention to pursue a P3
    • To design, build, finance and operate new crossing system under long-term concession
  • DRIC received environmental approvals in both Canada & U.S. in 2009
  • Windsor Essex Parkway construction underway, completion expected 2015
    • Budget 2007 committed Canada to contribute up to 50% of eligible capital costs
  • Property acquisition and utility relocation
    • Several industrial properties still to be acquired in Canada, utility relocation design beginning
    • No properties have been acquired in the U.S., utilities also have to be relocated
  • Project business case being completed
    • Based on an investment grade traffic and revenue forecast; robust project cost estimates; and market soundings
  • Timelines once approvals obtained and pre-procurement work completed
    • 18 months for actual project procurement process (Request for Qualifications - Request for Proposals - financial close)
    • Construction expected to take up to 5 years
slide12

Financial: Procurement of U.S. port of entry

Procured as part of the P3 package?

Yes

will be included in P3

No

Independently procured by GSA

GSA works with Transport Canada/Crossing Authority to determine specifications and funding

Economies of scale

Integrated construction completion

Canada will require cross default provisions to ensure the delivery of the U.S. POE on a consistent timeline to avoid payment of penalties to concessionaire

Canada requires a firm assurance from U.S. Government on construction and operating commitments, including staffing, and timeframes before proceeding with the project

next steps
Next Steps
  • Confirm U.S. commitment for funding and required approvals
  • Develop project business case
    • Complete U.S. due diligence
    • Seek approvals in Canada
  • Complete establishment Windsor-Detroit Bridge Authority
  • Establish International Authority
  • Continue with property acquisition and utility relocation design in Canada
  • Continue to manage legal risks
    • Vigorously defend legal and trade challenges
    • Passage of Bridge to Strengthen Trade Act