A financing plan which could result in faster construction of the Diversion Project at lower costs will be studied by Ernst & Young, a multinational professional services firm and one of the “Big Four” audit firms.
Ernst & Young is already familiar with the Diversion Project since it has worked closely with CH2M Hill, which is managing the Project.
“The Finance Committee has identified Ernst & Young as being a qualified professional group that has worked hand-in-hand with CH2M Hill in the past, so they come in high regard,” said Kent Costin, a Diversion Authority Finance Committee member. “They have been a part of our working group discussions for the past several months regarding the need to explore public/private partnerships, commonly referred to as P3s, and other financing options such as traditional loans and means which may be available within the federal bureaucracy already and which we may not have identified.”
Under the P3 plan being considered, the Diversion Authority would contract with a private company to build the channel portion of the Project while the Corps constructs the Southern Embankment of the Project through a traditional delivery. (See a map illustrating the plan)
The goal of a P3 plan would be to complete the project faster, saving millions in taxpayer dollars, and reducing flood risk to the public and infrastructure sooner.
Congress authorized the P3 model for flood control projects earlier this year as part of the Water Resources Reform & Development Act.
The financing study is estimated to cost between $175,000 and $350,000.
Also, Diversion Authority members approved another recommendation by the Finance Committee to apply for financing through the Federal Highway Administration for eligible components of the Diversion Project, such as bridges, access roads and underpasses. These loans may be a partial funding source for certain transportation-related elements.
The loan program would allow low interest loans with a repayment period of up to 35 years, and would not require repayments to begin until the Project has been completed.
It is estimated that approximately $380 million in Project components could be eligible for the loan project.