News and Press Releases - 2006

Business, Transportation & Housing Agency Secretary McPeak proposes saving time and money while attracting private investment in transportation projects

SACRAMENTO - Business, Transportation & Housing Agency Secretary Sunne Wright McPeak, accompanied by Caltrans Director Will Kempton, today testified before the state Senate Committee on Transportation and Housing on part of the legislative package proposed to implement the transportation component of Gov. Schwarzenegger's Strategic Growth Program.

"We've been dedicated to identifying the best value for the motoring public," Secretary McPeak said. "Alternative building techniques like design-build and design-sequencing offer opportunities to speed up project deliveries and cut costs. And public-private partnerships can generate billions of dollars in additional funding."

Design-build would allow Caltrans to select a contractor that could complete both the project design and construction under one agreement. Currently Caltrans uses the design-bid-build process, which utilizes Caltrans engineers to design the project and then awards the construction to a private firm. In January, a bipartisan Legislature voted overwhelmingly to allow design-build to be used on an important Interstate 405 project, paving the way to utilize alternative contracting methods for other projects throughout the state.

Design-sequencing is an approach to construction projects that permits construction activities to begin prior to the full completion of the design phase. This approach is used today in the private sector very successfully.

Public-private partnerships would allow Caltrans to accept private-sector investments and authorize franchise agreements with the private sector so it may then charge tolls to recoup its investments. The proposal would authorize Caltrans to construct and operate value-pricing programs involving High Occupancy Toll (HOT) lanes. In High Occupancy Vehicle (HOV) lanes where ample space is available and travel time can be reduced, HOT lanes could provide an alternative source of revenue by allowing single occupancy vehicles access to those lanes at a flat rate.

The governor's Strategic Growth Plan actually projects that $16 billion could be realized in public-private partnerships during the next 10 years. Administration officials analyzed traffic data in various regions throughout California and, after consulting with experts on public-private partnerships, identified several projects that would be viable candidates for partnerships.

"We have been briefed by experts who have worked on partnerships in other states that are in the process of bringing in billions of dollars in private capital," Secretary McPeak said. "These experts agree that California can be a destination for billions of dollars in private financing."