Financing Plan from Ohio, Kentucky Calls for Tolls on Brent Spence, New Bridge by 2020
Tolls would pay for the bulk of the Brent Spence Bridge project, said a report jointly released Tuesday by the Kentucky Transportation Cabinet and the Ohio Department of Transportation.
The report did not indicate exactly how much drivers can expect to pay.
The $2.63 billion project that includes highway infrastructure in both states and a new bridge next to the Brent Spence over the Ohio River would include video toll monitoring in a design-build-finance-operate-maintain (DBFOM) approach. Availability payments would be made through a public-private partnership (P3). The private partner used in the construction and tolling of the bridge would be compensated additionally through a series of milestone payments. Those payments would be made during construction and paid to the private partner upon completion of significant milestones within the project, the report said.
Examples of milestones include the completion of the bridge's pier foundations, main span towers, main span superstructure, and/or reaching substantial completion.
Because tolling would not be an option during the construction period, the two states' transportation departments expect to fund the project through the sale of non-recourse revenue bonds and/or a federal loan, debt financing raised on behalf of the P3 concession to advance funding to be provided by the availability payments, and private equity invested by a P3 developer to cover capital construction costs not covered by the milestone payments.
After the project is completed, toll revenue collected on the project would be used to pay back the non-recourse toll revenue bonds and/or loan.
If toll revenues were to fall short, the report said, Kentucky and Ohio would be responsible for subsidizing the gap of the contractual obligation with the developer.
Kentucky still needs to enact P3 legislation sufficient to accommodate and enable the Brent Spence Bridge project, the report noted. The report also indicated that a federal loan for the project would be similar to the Kentucky Downtown Crossing Project in Louisville which was loaned $452 million. Alternative capital market options would be considered if no loan were awarded, the report said.
After analyzing anticipated traffic flow, including motorists that would seek alternative travel routes to avoid tolls, both transportation departments anticipate that toll revenue would be sufficient in funding the project.
The portion of the project in Kentucky is expected to cost $630.5 million while the Ohio side would be approximately $1 billion, and the bridge work would be $707.6 million.
The financing plan, by law enacted by the Kentucky General Assembly, had to be submitted by midnight Tuesday.
Read the report in full: