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Indiana Successfully Uses Knik Arm Crossing Documents for Bridge Construction


ANCHORAGE, Alaska – A major public-private partnership project (P3) in the Lower 48 – the East End Crossing –  successfully achieved financial close in March 2013 using the Knik Arm Crossing’s project procurement and contract documents as a template for the deal. The success of the East End project demonstrates the soundness of the P3 approach adopted by the Knik Arm Bridge and Toll Authority for the Knik Arm Crossing.

Indiana’s East End Crossing is a bridge over the Ohio River and tunnel project between Louisville, Kentucky and southern Indiana that is very similar in size and scope to the Knik Arm Crossing and was procured as an availability payment P3 in just over one year from start to finish.

The successful bid for East End came in 23% below the Indiana Finance Authority’s (IFA) estimate. In a structure just like KABATA is developing, IFA is the owner of the bridge and the toll revenue it will generate. Toll revenue will be used to make the availability payments to the private partner over the 35 year term of the agreement. The availability payments are also backed by the moral obligation of Indiana, subject to appropriation. The similarities were so close that the Knik Arm Crossing P3 contract and procurement documents were readily adapted to the East End Crossing Project. Both IFA and KABATA employ Nossaman, LLP as their P3 legal counsel and CDM Smith as traffic and toll revenue consultant.

“KABATA’s P3 contract and procurement documents have been through extensive review to ensure they are as sound as possible and provide protections to the state,” said KABATA CFO Kevin Hemenway. “The Indiana Finance Authority’s legal counsel, who is also ours, recognized this and the project similarities and adopted our documents as the template for the East End deal.”

Many years of work and millions of dollars have been spent by KABATA ensuring the project is financially viable for the state and the contact documents will protect its interest. Using best practices for a toll bridge project, thousands of traffic and revenue simulations have been conducted to ensure a range of potential outcomes is factored into final project decisions – not just the expected case.

KABATA continues to work toward construction of the Crossing and is securing the rights of way and key permits while still working through an active procurement. Three potential private partners are awaiting the release of a request for proposals that is dependent on the passage of pending legislation necessary to obtain the best value for the state of Alaska.

For more information contact the Knik Arm Bridge and Toll Authority at 907-269-6698See a comparison of the Knik Arm Crossing and the East End Crossing.


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