Something terrific happened in New York City the week of June 13. Investment companies from all over the world came to the Big Apple to express their interest in the Knik Arm crossing project in a series of back-to-back meetings with the Knik Arm Bridge and Toll Authority. The response validated what KABATA and I have been saying: This project has huge interest in the private sector, 92 percent of Alaskans know about it and 70 percent support the project, according to the latest polling.
I traveled with KABATA to participate in these meetings as the sponsor of Senate Bill 80, an important piece of legislation to the P3 (public-private partnership) process for the bridge. The meetings took place at the same time as the InfraAmericas U.S. P3 Forum, a public policy conference about the emerging prevalence of public-private partnerships. Conference organizers told KABATA that once word went out that the bridge project would be front and center, the conference sold out.
My first day began with me addressing an industry workshop, along with KABATA Chairman Michael Foster, focusing solely on the crossing project, my legislation (SB 80), and the project's history. It also included a presentation embedded with supportive video from Rep. Don Young, Anchorage Mayor Dan Sullivan, as well as the late Bill Noll, former commissioner of the Department of Commerce, Community and Economic Development. The workshop was held at Citigroup in Manhattan and attracted almost 200 people.
From there, KABATA held two days of back-to-back, one-on-one meetings from 7 a.m. to 4:30 p.m. with investment companies vying to partner with the state on the bridge project. Rest assured -- each company that met with us wants to submit their qualifications for the project and be a player.
As world class infrastructure investment firms, these companies don't waste their time on a project unless they know it's viable. Every company we met with has seen our traffic data, they've seen the demographics and they are comfortable enough to want to sign an agreement with the state to partner on this project. Industry is ready to go to work, and they indicated to us they are ready to bring the capital to do so.
To recap, a public-private partnership shifts the risk to the private sector. Under the P3 deal, the private partner finances, designs, builds, operates and maintains the bridge under a contract with the state for a set period of time. Alaska's obligation is to make availability payments, which are periodic payments to the private partner made only after the bridge is available for use. The state owns the bridge and the toll revenue. Tolls will finance the availability payment and the lane miles have already been designated to join the National Highway System once the bridge is complete (remember, trucking traffic will bring in a lot of toll revenue).
These public-private partnerships are becoming the new way in America. Twenty-six states, including Alaska, and Puerto Rico have legislation allowing P3s. According to the National Conference of State Legislatures, the agreements benefit the state by allowing it to focus on a desired outcome instead of detailed project specifications, and the private sector earns a "financial return commensurate with the risks it assumes on the project."
The time is obviously now for this project. The Knik Arm Crossing has been talked about and planned for in Alaska since before statehood. Those forward-looking policy-makers who came before me knew the region would benefit from the infrastructure. Now, many current legislators and I are carrying on that mission and, with work of KABATA, Alaska is close to having the newest legacy project to be constructed in the state in decades. This project is shovel ready, has all the permits we need and a "build" decision from the federal government (the only state project to have that).
There is still the lure of Alaska as an attractive place to do business and the Knik Arm Crossing is the next attraction.
Republican state Sen. Linda Menard represents parts of the Mat-Su Valley.