Thoughts and Opinions On Today's Important Issues

Friday, January 29, 2010

Has MDOT Lost $1.6B For Michigan Roads

Here is the ultimate stupidity of DRIC as shown in a Detroit Free Press headline and why the whole process was a total lie from start to now. I won't say "finish" because there are around a dozen lawsuits started with many more to come that will take a decade or more to litigate:
  • "State seeks private help on bridge"

DUH... they already have a real public/private partnership in place with the best border operator between Canada and the US. Matty Moroun wants to build an Enhancement Bridge at his existing location which will NOT require any family or business to move as DRIC would and he will build it at his own expense without risk to or subsidy from taxpayers.

For some reason that has never truly been stated publicly, the Governments want to drive him out of business instead and put in another private partner in his place.

I wish a legislator in Michigan would say that he/she has had enough of being used by MDOT and treated with contempt as it goes on spending money on the DRIC project. It is not as if MDOT has money to fix existing roads and bridges in the State. It is hundreds of millions of dollars short with hundreds of projects on hold.

The Michigan Attorney-General also has a serious legal question to answer too. I wish he would deal with that as I shall discuss below.

First though, do you understand now why the Bridge Company put a condition on its offer to use its expenditures for toll credits for MDOT. The condition was that MDOT could not use that money for use in the DRIC project, the Bridge Company competitor.

Perhaps the Free Press Editors will agree that the "strings" attached make sense
  • "Moroun, who wants to build a wider bridge adjacent to his current one, does not want money from his operation used for match on anything that would hurt his project, especially work related to the Detroit River International Crossing study."

Barely a few days after the offer was made, this press release comes out of MDOT


    CONTACT: Bill Shreck, Director of Communications, 517-335-3084

    MDOT issues Request for Proposal of Interest in
    Detroit-Windsor border crossing system

    January 27, 2010 -- The Michigan Department of Transportation (MDOT) is asking individual firms and teams to respond to a Request for Proposal of Interest in partnering on the Detroit River International Crossing (DRIC) project.

    The Request for Proposal of Interest follows a series of informal interviews that MDOT and Transport Canada, in cooperation with the Federal Highway Administration (FHWA) and the Ontario Ministry of Transportation, conducted with major developers, contractors and lenders who had previously been involved in similar large privately-financed transportation infrastructure projects. This step involves a solicitation of market interest in the project that would provide the Michigan Legislature and the Canadian government with more information to formulate governmental policy and develop a procurement and transaction schedule. The deadline for individual firms or teams to submit responses to the Request for Proposal of Interest is March 17.

    Responses will be used by MDOT in a required report to the Michigan Legislature that MDOT will submit by May 1. State Transportation Director Kirk T. Steudle says the stage is being set to form a public-private partnership that will move the DRIC project forward.

    "At this point, we are considering a model that would incorporate some participation by the private sector in financing, design, construction, engineering and maintenance," Steudle said. "Although we have not yet finalized what that model will eventually look like, we know there are a number of teams out there eagerly anticipating the start of work on this historic project that will create jobs and keep international trade flowing across the border as efficiently as possible."

    According to MDOT, preliminary feedback indicates there is extensive interest and experience in the market for projects of this type and that, aside from some geotechnical engineering issues, there are no substantial construction complexities involved. Given the anticipated tolled nature of the border crossing, MDOT says there are several public-private partnership models ranging from real tolls to availability payments that could be applied to the DRIC under current market conditions.

    The Record of Decision for the DRIC, issued Jan. 14, 2009, by the FHWA, provides environmental clearance for right of way acquisition and construction planning for the proposed new bridge. MDOT and Transport Canada, in close coordination with the FHWA and the Ontario Ministry of Transportation, are jointly pursuing the development of the DRIC.

    The proposed project is an end-to-end solution that includes the I-75 interchange and U.S. inspection plaza in Detroit; a new bridge over the Detroit River; and the Canadian plaza in Windsor, Ontario. The Canadian access road, known as The Windsor-Essex Parkway, will extend Highway 401 in Windsor to the new bridge, and is an integral part of the proposed end-to-end solution. The Windsor-Essex Parkway is under separate procurement and will not be part of the plaza-bridge procurement.

    More information about the DRIC and the Request for Proposal of Interest is available on the Border Transportation Partnership Web site at

However, what you do not see in the Press release is this document, the Request for Proposal of Interest itself that can be viewed at

Note especially the Front Page:

How can this be? Somehow the Canadian Government is jointly and directly involved in a supposed MDOT solicitation to meet the requirements of the Michigan Legislature although Canada's role is not mentioned in the Press Release. I wonder why not! Shouldn't the first sentence of the release start off saying MDOT AND Transport Canada...

Here is where the legal issue comes in that the Michigan AG should consider. Consider this section of the MDOT Budget authorization dealing with how MDOT may deal with DRIC:

  • "Sec. 384. (1) The department may continue with preliminary legal, financial, traffic and revenue study, permitting, engineering, and other ancillary work for the Detroit River International Crossing (DRIC) so that it can solicit from the private sector requests for proposals for public-private partnerships to construct the bridge, plaza, and related infrastructure. The department shall submit proposals to the legislature by May 1, 2010. Those activities associated with the DRIC project shall not bind the state in any way to construction,
    (2) The department shall submit an investment grade traffic study to the legislature by May 1, 2010 from a reputable traffic company with appropriate experience intended to provide a detailed traffic projection for the ensuing 10 years, taking into account projected infrastructure modifications, expansions, and improvements announced.
    (3) The department shall not expend more than $2,500,000.00 from state transportation revenue sources for activities enumerated in this section.
    (4) It is the intent of the legislature to fully adopt or reject authorizing legislation by the full legislative bodies by June 1, 2010 to do all of the following:
    (a) Construct a new international crossing jointly and in agreement with Canada.
    (b) Create an authorized tolling authority.
    (c) Create a public-private partnership.

Has MDOT in fact thumbed its nose at the Legislature nose by starting the process to choose a P3 operator even though there is no legislation in place and the Legislature has not approved the project going forward as their Budget Act requires.

Let's be real, this is NOT MDOT merely "[soliciting} from the private sector requests", this is MDOT and Canada starting the process by obtaining expressions of interest:

  • "1. Introduction
    1.1. Purpose of this Request for Proposal of Interest

    The Michigan Department of Transportation (MDOT) and Transport Canada (TC) are pleased to present this Request for Proposal of Interest (RFPOI) to individual firms or teams with experience in developing and/or financing large transportation infrastructure projects either in North America or internationally and that are interested in the development of the Detroit River International Crossing (DRIC or Project) under one or more public-private partnerships. Individual firms or teams interested in responding to this request (“Respondents”) are invited, on a non-binding basis, to express their interest in the project.

    MDOT and TC are looking forward to the feedback of the private sector in response to this RFPOI. The responses will be used in developing governmental policy, in structuring the procurement process and the project agreement, as well as briefing the legislative branch of the State of Michigan and the executive branch of the Government of Canada."

This is NOT what section 384 says at all nor was it the Legislature's intent.

While I believe that the document was designed to make it appear that it was an MDOT document that complied with the section, I suspect that Transport Canada had more than a hand in it. There are 2 glaring mistakes made in it that tell me that MDOT's role was minor. Maybe I am wrong but one day I hope we shall find out the truth whether Transport Canada was the real author

It cannot be an MDOT document when everything significant talks about "MDOT and/or TC." As an example:

  • "MDOT and/or TC are under no obligation as a result of this process and may decide not to proceed with any or all of the transactions contemplated herein or may proceed with such transaction or transactions by any other procurement means or delivery model deemed fit."

  • "MDOT and/or TC reserve the right to alter any of this document, including any conditions and criteria outlined herein which may include, but is not limited to, deadlines for submissions. MDOT and/or TC reserve the right to cancel this RFPOI process at any time. MDOT and/or TC will make notification of any alterations or cancellations of this document by posting notice on the following website"

In other words, this document was prepared to meet Canada's timetable and its plan to put the Bridge Company out of business. And to make sure that MDOT cannot back out since it is a "joint" document

This document is how MDOT is ignoring the Legislature as if it did not exist.

This is a MegaProject that is running amok! And what is the lame-duck Governor doing about it?