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Macquarie pulls out of bypass project |
By David Sale,
Newberg Graphic reporter
E-mail David at
dsale@eaglenewspapers.com
|
Macquarie Infrastructure
Group, the Australian firm that planned to partner with the Oregon
Department of Transportation to construct the Newberg-Dundee bypass,
has announced it is backing out of the deal.
The company’s decision was due to concerns over financing,
according to Patrick Cooney of ODOT’s Office of Innovative
Partnerships, which helped broker the public-private partnership
with Macquarie.
Representatives from Macquarie were unavailable for comment as of
press time Friday, but in a July 17 letter to ODOT officials,
Nicholas Hann, Macquarie’s project manager, wrote: “The bypass is
not commercially self supporting ... as long as there is a viable
free alternative on Highway 99W. This situation is likely to
continue for a long time until congestion levels become so
intolerable for most of the day that more people are prepared to pay
to use the Bypass.”
“There was a funding gap, depending on the type and amount of
tolling you went with,” Cooney said. “They don’t believe that they
can make the project work with a single-tolling option, and Bear
Sterns agreed — it doesn’t meet the purpose of shifting enough
traffic off 99W.”
Bear Sterns, a New York auditing firm, was hired to review the
“Milestone One” funding proposal prepared by Macquarie last year and
the traffic study used to prepare it. Their report was scheduled to
be released two months ago.
Macquarie’s proposal was to construct the bypass in return for a
concession to operate it as a toll road. Their report recommended
tolling on both Highway 99W and the future bypass, a proposal that
met with local and political opposition, resulting in a declaration
by ODOT that they would not pursue that option.
“This was never appropriate for a private, for-profit venture —
this is a public responsibility that ODOT needs to follow through
on,” said U.S. Rep. David Wu (D-1st District) of the announcement.
“I’ve helped secure $27 million so far in federal funds for the
project, now it’s time for them to deliver. I’m frustrated, but my
frustration is nowhere near that of the residents of the area.”
Though leaving the bypass project in the lurch, Macquarie was
within its rights to exit at this time, explained County
Commissioner Leslie Lewis, a member of the Project Oversight
Steering Team (POST), composed of representatives from city and
county government, among others.
“The way the development agreement was set up, either party had the
right to opt out after completion of the Milestone One report — or
after reaching Milestones Two or Three in the process,” Lewis said
Cooney and Lewis agreed that Macquarie’s exit did not spell the end
of the bypass project.
“The conclusion is this public-private funding mechanism doesn’t
work, but the Oregon Transportation Commission remains committed to
the project,” Cooney said.
And while the Bear Sterns report verified that a single-tolling
option would not be feasible as a private concession, a state-owned
toll road remains on the table, Lewis said.
“Apparently if they do public-sector tolling, they can pay for more
of the construction than through private concessions — ODOT got a
model from (Bear Sterns) a week ago and haven’t had the chance to
dive into it, but they could fund up to $200 million on bypass-only
tolling,” she said. “That still leaves a gap, but we’re willing to
work on cost reduction measures and continue to pursue federal and
state funds.”
Wu, meanwhile, was skeptical: “Where else in Oregon is there a toll
road? This needs to be paid for by ODOT like any other public road.”
State Sen. Gary George (R-McMinnville), speculated that Macquarie’s
announcement put an earlier proposal for a regional bypass
connecting I-5 with Highway 18 through Marion County, back on track.
“We’re looking at means of acquiring right-of-way — there’s a LNG
(liquid natural gas) pipeline coming into the area, and if we can
change the route and have it come along the north bank of the
Yamhill River on its way to Molalla, we may be able to tag along and
add an additional 150 feet of right-of-way,” he said.
“I’m not sure why he would think that — it hasn’t come up for our
site design review yet and the main reason (the regional bypass)
plan was halted was the opposition of the Marion County
commissioners — they’ve passed three resolutions against it in five
years,” Lewis said.
Despite this latest obstacle, Lewis remained confident the
Newberg-Dundee bypass would one day be open for traffic.
“Failure is not an option,” she said. “This project is too
important to the economy of our county.” |
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From
July 28, 2007, Newberg Graphic
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