Skip to contentU.S. Department of Transportation Federal Highways Administration Public Private PartnershipsFHWA HomeFeedback
 
PPP Home | Contact Us   
 
  PPP Case Studies

CASE STUDY NAME: SOUTH BAY EXPRESSWAY (SR 125) « back
Location San Diego County , California
PPP Option DBFO Real Toll
Mode Tollroad
Description

New 12.5-mile highway alignment from SR 905 near the International Border to SR 54 near Sweetwater Reservoir. South Bay Expressway connects the only commercial port of entry in San Diego to the regional freeway network. This project, made possible through an innovative public-private partnership, will complete the missing link in San Diego's third north-south freeway corridor.

This highway segment directly connects Otay Mesa, the largest area of industrial zoned land remaining in San Diego County , with Eastern Chula Vista , including six new communities: Lomas Verdes, The Otay Ranch, Rolling Hills Ranch, Rancho San Miguel, Sunbow and Eastlake. South Bay Expressway will drastically reduce commute times for those traveling between these two areas, and provide convenient access to Downtown, Sorrento Valley, Santee, I-8 and I-15, Mexico and more.   The southern 9.5-mile section of South Bay Expressway is being constructed as a privately financed and operated toll road and will use FasTrak, an electronic toll collection system. The toll road is being developed under California 's AB 680 legislation passed in 1989. A limited partnership, San Diego Expressway, LP, holds a franchise with the State of California under which it finances and builds the highway, then transfers ownership to the State. The limited partnership then leases back, operates and maintains the facility for 35 years. At the end of that time, control goes back to the State at no cost.

The northern 3.2-mile portion of South Bay Expressway, including the interchange with SR 54, will cost approximately $138 million and is publicly financed with a mix of federal (FHWA) and local sales tax funds (San Diego Association of Governments). Once opened, this segment will operate as a freeway.

Both the private and publicly funded portions will be built by the same contractor under two design-build contracts. California Transportation Ventures, Inc. (CTV), the general partner, manages the project and will administer the contracts. Washington Group International is the selected contractor with a joint venture of Parsons Brinckerhoff Quade and Douglas, Inc and J. Muller International as the design subcontractor.

Initial construction of the 12.5-mile highway included grading for the ultimate facility of eight lanes on the northern half of the project and six lanes on the southern half. A wide median will run the full length of the project to allow for future carpool lanes or transit. Initial construction will allow for two lanes of travel in each direction. Additional lanes and structures will be added as traffic increases.

Sponsor

CALTRANS

Cost

$635 million
$138 million for connector and interchange

Type of Finance

$140 million TIFIA loan

$160 equity from Macquarie Infrastructure Group

$48 million in right-of-way grants from local developers

Commercial debt

(Connector Route: $132 million federal and local funding)
Revenue Sources Toll revenues
Project Delivery / Contract Method

35-year BTO franchise with the State of California allows developer to set market rate tolls. Franchise allows a maximum 18.5% return on total investment with additional allowed incentive return for action to increase average vehicle occupancy on the toll road.

Private Investor Partner

California Transportation Ventures, Inc., a wholly owned subsidiary of Macquarie Infrastructure Group

Other Private Partners Washington Group, Design-Builder
Project Advisors Nossaman, Guthner, Knox & Elliott, LLP
Salomon Smith Barney
PBConsult
Orrick Herrington & Sutcliffe
Wilbur Smith Associates
Lenders TIFIA program, bond holders
Physical Status

FEIS/ROD: approved 6/2000
Construction began September 2003
Expected opening: early 2007

Financial Status

Financial Close May 23, 2003

Innovations

$140 million TIFIA loan is the first-ever provided to a private toll road development. The 38-year loan has a fixed rate borrowing cost equal to 30- year treasuries.

A competitive (best value) bid, design-build procurement process was followed in which the same designer, design subcontract, and design price were mandated to each proposer. The designer was a joint venture composed of subsidiaries of the project sponsors.
Related Links / Articles

SR 125 Homepage (California Transportation Ventures, Inc.)
CalTrans Project Factsheet
Citizens for 125
Coverage in The Los Angeles Times
Coverage in Civil Engineering

Contact

South Bay Expressway
info@southbayexpressway.com
619-591-4200

back to top

 
PPPS Defined | PPP Options | PPP Legislation | SEP-15 Program | Private Activity Bonds | PPP Case Studies | Links | Resources
Events Calendar | Contact Us | Glossary
 
FHWA Home | Feedback
FHWA
United States Department of Transportation - Federal Highway Administration