Design-Build-Finance in the US: The case of iROX, I-75 Road Expansion Project

Abstract

This project is part of the Interstate 75 road expansion, located in Southwest Florida and consisted of an expansion from four to six lanes along a 30-mile stretch. The paper presents a design, build and finance (DBF) approach applied to a US highway. This work focuses on the financial structure of the project, which did not include a concession (operation); the bidding procedure, which took into account an interesting bid evaluation criterion and; project management matters. The information on the case study was acquired by exhaustively examining the documentation of the project and by interviewing the Project Controls M a n a g e r. T h e f i n a n c i a l s t r u c t u re used in the project showed that it is possible to extend the payment period beyond the construction deadline without resorting to a toll system. As usual, the bid evaluation criteria of this project included price, time and technical background; however, these aspects were evaluated through the use of a compensated score. Finally, some interesting management aspects of the project are addressed, in order to generate some recommendations for future DBF projects in the US and the world.Palabras clave: Diseño-Construcción-Financiamiento, construcción de infraestructura vial, gestión.

Making sense of the definition of public-private partnerships

“…The DBF case, I-75 roadway expansion (iROX) Project in the United States, is a relevant example discussed in Gurram (2020) and Forcael et al . (2011).…”

“…This project bundled nine smaller projects into a single DBF contract to achieve economies of scale. The period for design and construction was three years, and the government deferred the payments for five years (Forcael et al ., 2011). Although the private sector financed the development of the infrastructure, only construction risk was meaningfully associated with such financing.…”

“…The DBF case, I-75 roadway expansion (iROX) Project in the United States, is a relevant example discussed in Gurram (2020) and Forcael et al (2011). This project bundled nine smaller projects into a single DBF contract to achieve economies of scale.…”

Optimizing contractor’s selection and bid evaluation process in construction industry: Client’s perspective

“…Hwang & Kim (2016) argue that a competent contractor is indispensable for the completion of a construction project throughout its project lifecycle. A major issue that hinders the success of a construction project is bid evaluation and contractor's prequalification, faced by numerous construction industries around the world (Forcael et al, 2011;Holt et al, 1993;Idrus et al, 2011;Kaming et al, 1997;Mahdi et al, 2002). The causes of this issue vary depending on the culture, environment, processes, and organization of the construction industry.…”

Is It Correct to Use the Internal Rate of Return to Evaluate the Sustainability of Investment Decisions in Public Private Partnership Projects?

“…In exchange, the private partner will be entitled to some economic rights related to the project [1,2]. An example is for instance the I-75 road expansion project [3]. Thus, to the private sector PPP projects are investment projects: A long-term allocation of funds with the expectation of a profitable return through the generation of a positive income in the future.…”