Presentation to Northeast Association of State Transportation Officials Monday, June 10, 2013 3:45 pm – 5:00 pm

1. Presentation to Northeast Association of State Transportation Officials Monday, June 10, 20133:45 pm – 5:00 pm Public-Private Partnerships in Maryland Working Together for the Customer

2. P3s: Working Together for the Customer • P3 Projects • Seagirt: Enhancing the Port’s ability to serve cargo customers • Travel Plazas: Improving the customer experience along I-95 • Maryland’s New P3 Law • Definition: Focused on performance over the full asset lifecycle • Key Terms: Based on MD experience and lessons learned elsewhere • Processes: Predictable, transparent, and streamlined approach for all stakeholders • Future Opportunities • Potential Application to Transit Projects

3. Seagirt Marine Terminal Infrastructure Need • Identified need to fund critical development of 50’ deep berth in the Port of Baltimore to help maintain global competitive position when the Panama Canal is completed in 2015 • This goal could not be achieved using existing public resources

4. Seagirt P3 Key Objectives • Fund critical development of 50’ deep berth in the Port of Baltimore to help maintain global competitive position when the Panama Canal expansion is completed in 2015 • Generate significant economic growth and quality job creation → Significant job (5,700) and tax revenue creation ($16 million per annum) • Generate upfront proceeds that can be used to fund other supporting infrastructure projects → $140 million upfront, reinvested in shovel-ready transportation projects along I-95 and the Chesapeake Bay Bridge, among others • Receive an ongoing annual payment stream and a sharing mechanism → Annual payment of $3.2 million, grown at inflation starting in year 5 at a minimum rate of 1.5%, with growth capped at a maximum of 3.5% per annum; $15 per container, for each container in excess of 500,000, rate grows at inflation with same terms as Fixed Annual Payment • Select a private operator that had extensive operating experience and a favorable relationship with the unions → Partnership with incumbent, proven operator with an 88+ year history in the Port (Ports America)

5. Seagirt Achievements January 2010 • Operational Handover • Ports America Chesapeake assumed full operational control over Seagirt on January 12, 2010 • Transition occurred smoothly with no operational challenges or union work stoppages • Cargo Volume Update • Seagirt set new cargo records in 2010, with growth and new records continued in 2011 • Port moved from 12th to 11th among the nation’s ports (dollar value of cargo) • Hapag-Lloyd began direct, weekly service to Baltimore • Berth IV Construction Update • $105 million project fully completed, two years ahead of schedule July 2011 January 2013

6. Travel Plazas P3 Key Objectives Enter into a 35-year concession agreement for the two Travel Plazas, during which time the private partner will be fully responsible for all of the financial obligations of redeveloping and then maintaining and operating the facilities. • Obtain new or like-new facilities to replace the current Chesapeake and Maryland Houses • Ensure that the facility design and operation will provide a positive customer experience • Provide a fair return to the State, and provide for transfer of the facilities in satisfactory condition at the end of the term

7. Travel Plazas Team Structure

8. Travel Plazas Progress (Maryland House) December 2012 April 2013 December 2013

9. P3s: Working Together for the Customer • P3 Projects • Seagirt: Enhancing the Port’s capacity to serve cargo customers • Travel Plazas: Improving the traveler experience along I-95 • Maryland’s New P3 Law • Definition: Focused on performance over the full asset lifecycle • Key Terms: Based on MD experience and lessons learned elsewhere • Processes: Predictable, transparent, and streamlined approach for all stakeholders • Future Opportunities • Potential Application to Transit Projects

10. Towards a More Comprehensive P3 Approach

11. Maryland’s P3 Definition Method for delivering public infrastructure assets using a long-term, performance-based agreement between a Reporting Agency and a Private Entity where appropriate risks and benefits can be allocated in a cost-effective manner between the contractual partners in which:   • Private Entity performs functions normally undertaken by the government, but the Reporting Agency remains ultimately accountable for the public infrastructure asset and its public function; and • State may retain ownership in the public infrastructure asset and the private entity may be given additional decision-making rights in determining how the asset is financed, developed, constructed, operated and maintained over its lifecycle. • Does not include an asset sale or a short–term operating space lease.

12. Key Details of P3 Law • Creates predictable, transparent, and streamlined approach, incorporating best practices and lessons learned from other states while addressing the needs of Marylanders • Allows agencies to consider unsolicited proposals • Outlines key requirements for competitive processes for both unsolicited and solicited proposals • Exempts P3s from state procurement (Division II of State Procurement Article) • Reporting agencies are promulgating regulations for the development, solicitation, evaluation, award, and delivery of future P3 projects • Requires that the Board of Public Works (BPW) review and designate any potential P3 project, ensuring that future P3 projects receive the highest level of scrutiny BEFORE the State seeks bids from potential partners • Outlines key terms and provisions that should be part of a P3 Agreement

13. Maryland’s P3 Oversight Process 45 days max, with 15-day extension possible for larger projects 30 days max

14. Executive Order to establish framework this summer for Statewide collaboration and knowledge sharing

15. P3s: Working Together for the Customer • P3 Projects • Seagirt: Enhancing the Port’s ability to serve cargo customers • Travel Plazas: Improving the customer experience along I-95 • Maryland’s New P3 Law • Definition: Focused on performance over the full asset lifecycle • Key Terms: Based on MD experience and lessons learned elsewhere • Processes: Predictable, transparent, and streamlined approach for all stakeholders • Future Opportunities • Potential Application to Transit Projects

16. Purple Line Light Rail: Linking the Capital Region The Purple Line is a proposed 16+ mile light rail line extending from Bethesda in Montgomery County to New Carrollton in Prince George's County, enhancing connections in the Washington DC metro area.

17. Red Line Light Rail: Enhancing Transit Connections in Baltimore City The Red Line is a proposed 14+ mile, east-west transit line connecting neighborhoods and existing transit infrastructure (commuter rail, light rail, bus routes) across Baltimore City.

18. Determining P3 Potential for New Transit Development

19. Contact Information For additional information: Bruce Gartner Assistant Secretary for Transportation Policy and Freight Maryland Department of Transportation bgartner@mdot.state.md.us