1999 NCPPP Project Award Winner
Project Location: Santa Fe, New Mexico
Public Sector Partner: New Mexico State Highway & Transportation Department
Contact Name: John Fenner, 505.827.5110
Private Sector Partner: Mesa Development Corporation
The contract for the NM Corridor 44 construction used a public-private partnership to create a new model for joint design and accelerated construction, a new class of investment grade public finance and introduced long-term warranty to the nation. This program was selected as the Western Governor’s Association “Best Practice” for 1998 as well as one of Governing Magazine’s five “Deals of the Year”.
The New Mexico State Highway and Transportation Department (NMSHTD) and Mesa Development Corporation have created a new paradigm for transportation project development. This 121-mile corridor was developed from concept to contract execution in 15 months. Each partner employed their unique strengths toward the project development. The process awarded, to a single private sector contractor, a contract to design the corridor and then manage its construction. The NMSHTD then awards construction contracts based on competitive bids and Mesa then manages these construction contracts.
To finance the program, NMSHTD, in partnership with Dain-Rauscher and the New Mexico Finance Authority, issued the first-ever bonds secured solely on the pledge of future Federal Highway Funds (GARVEES). Without a State guarantee, the bonds received an A3 rating from Moody’s and an A-rating from Standard and Poors. The first $105 million of bonds sold at an all-inclusive cost of 4.8%.
NMSHTD in partnership with Mesa Development Corporation introduced the first-ever, long-term, 20-year highway warranty, in the United States. The warranty is secured with private sector Koch Materials, Inc. assets that are pledged to the state. This warranty guarantees the public a road performance level that could not be achieved through traditional means. The estimated cost for a maintenance equivalent is $151 million, warranted for $62 million. The state and the taxpayers will realize a savings of $89 million.