How RISKY Is This

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How RISKY Is This??
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How RISKY is This??

• Buy a lottery ticket
• Only 3 will be sold
• Cost for a ticket 80 million
• Jackpot 2,000,000,000

Where is the F_at_ing RISK!!
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The Program
1 lump sum contract
4 years
5 light rail lines 30
miles of infrastructure 100
vehicles 2,000,000,000 investment
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Lets Talk RISK
The Relationship Risk
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Lets Talk RISK
The Relationship Risk
Facility Provider

• Development agreement

• Design/Build contract

• Operations maintenance contract

• Financing plan

Integrated Master Development Structure
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The Evolution RISK - Team Building
Civil Engineer Facility Provider D/B
Contractor(s) Financiers Vehicle
Supplier
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The Evolution RISK - Team Building
Civil Engineer Facility
Provider Financiers Vehicle
Supplier
O M Contractor
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Development Agreement

• CE facility provider marriage
• Scope definition
• Transparent costing
• Construction sequencing schedule
• Utility agreements
• Property acquisition
• Risk register

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RISK Register

• 154 Items
• 92 Facility provider
• 62 METRO / owner
• 35 Categories
• 30 - 15 Project value
• 460M - 250M

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RISK Register

• Imputed risks
• Real (equity) risks
• Cost going in Cost coming out
• Risk take of last resort

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The Ultimate RISK

• METRO will not buy/own the project
• Availability payment
• Debt service year five (5) onward
• Operating year one (1)
• Avoid latent defect risks
• Long term business model
• Long term lease
• Buy out in increments
• Buy out total
• Private or public operation

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The Vehicle RISK

• METRO takes what industry makes
• No specs
• No custom work
• No kidding!

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Design / Build

• 3,000 5,000 segments one done
• No change order
• No claims
• No litigation
• No liquidated damages
• Target cost pricing mechanism
• Risk vs. Incentives

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Would you RISK IT??