Canadian PM traveling to Windsor today to announce agreement with Michigan Governor Snyder on new international toll bridge

June 15, 2012
By Peter Samuel

2012-06-15: The Canadian prime minister Stephen Harper is in Windsor today for the formal announcement of an agreement with Michigan Governor Rick Snyder to advance a new toll bridge downriver of the Ambassador Bridge. Governor Snyder faces opposition to having Michigan taxpayers underwrite any of the costs of the new bridge which will compete for limited traffic with the Blue Water Bridge, the Detroit Windsor Tunnel and the Ambassador Bridge span.

The state legislature has explicitly barred the spending of any state money on the project. The Canadians have said they'll advance $550m for the upfront costs of the interchange, approaches and plaza on the Michigan side. And on the Ontario side of the Detroit River they have their own $1,400m Windsor Essex Parkway under construction.

They have said they'll want to recover their $550m advance to Michigan from bridge tolls.

Gov Snyder and the Canadians have both said they expect the bridge proper to be financed by investors under a longterm concession. The bridge cost is about $1 billion by itself.

Governor Snyder's office has this announcement from yesterday:

"Tomorrow, Friday, June 15, 2012, Governor Rick Snyder and Lt. Governor Brian Calley will join Prime Minister of Canada Stephen Harper for an announcement of significant economic importance to Michigan and Canada.

"The live events in Windsor and Detroit will STREAM LIVE at Governor Rick Snyder's website.

Friday, June 15, 2012

12:45 PM: Live Broadcast from Windsor

2:45 PM: Live Broadcast from Cobo Hall in Detroit

http://www.michigan.gov/snyder

"We can have our cake and eat it" - Lt Gov Calley

The Detroit Free Press this morning reports Michigan Lt Governor Brian Calley as saying that the agreement provides for:

- "Michigan taxpayers would have no obligation to pay any part of the costs - period. Canada will front the state's $550-million share and recover the money from bridge tolls. The provision, Calley said, refutes persistent claims from critics that taxpayers would be left holding the bag.

- "Canada bears all of the risk if bridge tolls don't raise enough revenue to make scheduled repayments to the private contractor chosen through competitive bidding to finance, build and manage the bridge.

- "There would be equal representation for Michigan and Canada on a six-member international bridge authority and a bridge that's half owned by Michigan and half owned by Canada.

- "All tolls for traffic crossing in both directions will be collected in Canada, through a separate Crossing Authority that is "responsible for the design, construction, finance, operation and maintenance" of the new bridge.

- "There would be 'community benefits' such as help in finding jobs and correcting environmental issues for residents of the Delray neighborhood in southwest Detroit who will be displaced or otherwise affected by construction."

The Detroit News quotes Calley:

"This really is a no-brainer... This is the type of project which gives us the ability to have our cake and eat it, too."

website of NITC/DRIC bridge supporters:

http://buildthedricnow.com/

Ambassador Bridge company

Mickey Blashfield, a lobbyist for the Ambassador Bridge company and director 'The People Should Decide' ballot committee issued a statement today welcoming Governor Snyder's joining public debate on the new bridge saying:

"Beyond a press event the governor needs to make his best case for his government bridge. The Michigan legislature after reviewing all the facts was not convinced. Now hardworking taxpayers will vote in November whether they trust him... the people deserve to have a vote about such an important issue."

"Highlights" of NITC agreement

Bridge supporters have posted this apparently from the Governor's office:

KEY POINTS

The interlocal agreement signed by Gov. Rick Snyder and Canadian officials is a milestone in Michigan's reinvention. It positions our state to successfully compete in the global economy while protecting taxpayers from shouldering any of the NITC's costs.

This is "relentless positive action" at its finest. The agreement is the result of collaboration with our international neighbor, all levels of government, the private sector and labor. It shows what we can do when we work together to achieve common goals.

The NITC is vital to enhancing Michigan's economic strength and security. Building a modern bridge between Detroit and Windsor will move our state forward by:

Creating a demand for 10,000 jobs related to the NITC project.

Opening new global markets for farmers, entrepreneurs and manufacturers across our entire state.

Allowing Michigan to maximize federal matching funds for use on highway projects across the state.

Providing additional capacity to meet long-term demands as the economy grows.

Minimizing the likelihood of an economic disaster should the other crossings sustain a lengthy shutdown.

Attracting new investment to Michigan.

Reducing costs to job providers, especially the auto industry. Estimates show that border regulations and delays now add significant costs to vehicle production.

Providing a direct connection between I-75 in Michigan and Highway 401 in Canada, reducing the amount of truck traffic that goes through residential communities.

Helping to establish southeast Michigan as a global transportation hub.

The agreement allows for the creation of an International Authority to oversee the letting of bids to privately design, develop, finance, construct and operate the NITC.

No tolls will be charged in Michigan for use of the bridge. Canada will charge tolls, which will reimburse the Canadian government for the funds it advances related to the NITC.  Canada also will pay all costs required for land acquisition in Michigan and Canada.

The NITC will not put existing border crossings out of business. Its additional capacity and strategic location will complement existing crossings. In fact, our growing economy demands that Michigan's current bridges and tunnel remain viable.

The governor's authority to enter into this agreement is granted by the Legislature under the state Urban Cooperation Act as well as by Michigan's Constitution.

AGREEMENT HIGHLIGHTS

The Crossing Agreement provides that Canada, through a Canadian entity to be created called the Crossing Authority, will be responsible for the design, construction, finance, operation and maintenance of the NITC.

Signing the agreement on behalf of Michigan are Gov. Snyder, the MDOT director and the president of the Michigan Strategic Fund. Signing on behalf of Canada are Transport Minister Denis Lebel and a representative of the Crossing Authority.

Michigan will not be obligated to pay any of the costs of the NITC and no state appropriation will be required.

Actual design, construction, operation and maintenance of the NITC will be done by a private entity through a 40-50 year public-private partnership agreement (P-3 Agreement) between the Crossing Authority and the private entity as concessionaire.

Canada will make annual "availability payments" to the concessionaire to pay for the costs of financing the design and construction of the NITC and for the on-going operation and maintenance expenses during the terms of the P-3 agreement.

The government of Canada will also pay all costs of required land acquisition in Canada and in Michigan and will also pay for the construction of the interchange to connect the NITC to I-75. No tolls will be charged in Michigan for the use of the NITC. Canada will charge tolls in Canada for use of the bridge.

Toll revenues received by Canada will be used to reimburse the government of Canada for its advances of funds for costs related to the NITC and for its annual availability payments to the concessionaire.

Canada's expenditure of up to $550 million will be eligible as matching funds for U.S. federal aid for Michigan highway projects.

An International Authority will be established with three members appointed by Michigan and three members appointed by Canada.

The International Authority will oversee the competitive procurement process to select the concessionaire. It must approve the forms of the Request for Qualification (RFQ), the Requests for Proposals (RFP), the winning proposal and the P-3 agreement.

The International Authority will oversee compliance by the Crossing Authority with the terms of the crossing agreement and compliance by the concessionaire with the terms of the P-3 Agreement, both before and after the opening of the NITC.

The RFP and the P-3 Agreement must contain provisions for a community benefits plan and for the involvement of the affected communities in both Michigan and Canada.

Effectiveness of the crossing agreement is subject to approval of the U.S. Secretary of State, in accordance with the provisions of Article I, Section 10 of the U.S. Constitution and federal laws implementing those provisions.

No state or local entity in Michigan will be obligated to make any availability payments or any other payments to the concessionaire or to any third party in connection with the design, construction, operation and maintenance of the NITC.

BRIDGE COST

Construction cost of the bridge itself is estimated at $950 million. The cost will be paid for by the private concessionaire and will be repaid by Canada through tolls.

NEXT STEPS

All environmental clearances in the U.S. and Canada have been received. However, the following permits must be secured:

A "presidential permit" must be issued by the U.S. State Department before the NITC agreement becomes effective.

Presidential permits are required under the U.S. Constitution for the construction, connection, operation or maintenance of certain facilities at U.S. borders with Canada and Mexico. This requirement applies to all new border crossings and to all substantial modifications of existing international crossings.

A U.S. Coast Guard permit to construct a bridge in navigable waters.

Land acquisition must be initiated.

STATISTICS

Canada is Michigan's largest trading partner. In 2011, Michigan/Canada trade totaled $70.2 billion. That's 11.7 percent of the total U.S. trade with Canada.

In March 2012, Michigan once again led all states in surface trade with Canada, at $6.3 billion in two-way trade. That's a 3 percent increase from March 2011.

About 237,000 Michigan jobs depend on Michigan-Canada trade. That's 1 in 8 jobs in southeast Michigan and 1 in 7 jobs in west Michigan.

The existing bridge between Detroit-Windsor is the busiest trade crossing on the U.S. - Canada border.

The Detroit-Windsor crossing is the No. 1 traffic bottleneck in the entire Pan-American freeway system.

On the Canadian side of the border, the existing bridge empties more than 8,000 trucks a weekday into an area surrounded by the University of Windsor and a residential community. end quotes from Governor's office paper

see

http://buildthedricnow.com/2012/06/15/important-highlights-of-the-new-international-trade-crossing-agreement/

TOLLROADSnews 2012-06-15

Further Reading


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