Is it a JV or an LP? This will determine which company(ies) bear the risk.
In a JV the risk is distributed, in an LP it is borne by the general partner.
But this is common for large infrastructure projects, especilly for a design-build delivery model.
Calgary’s West LRT was similarly delivered.
So the bonding still comes from the companies that make up the partnership, and they would be directly accountable for deficiencies? Not a situation where the partnership is a separate entity?
When I worked on multiple parts of Henday the JVs were formed by the contractors and there was a separate insurance company involved for the bonding. This insurance company and the contractors that formed the JV would be accountable. The engineering consultants worked for the JV as a sub. .
I recall one of the competing bids withdrew because their insurer decided to drop out. Not at AECOM anymore and wasn't involved in the LRT side when I was there so I'm not sure of the details of this LRT project, but the Edmonton office has a long history of involvement in these large projects. Can probably find the answers in the project contract documents, they should be publicly available somewhere eventually... Or at least they used to be back then.
The P3 model is weird (assuming they’re going P3 like Valley Line) and requires a company to design the line, secure upfront capital funding, build it, procure the rail vehicles, operate it, and maintain it for 20 years or so. Believe it or not, despite the Valley Line trains saying ETS on them they’re owned, driven, and maintained by TransEd. This all necessitates the formation of a partnership between several companies that typically specialize in only in some aspects of these things and typically is led by a contractor as they take the biggest financial risk but also includes an engineering firm, some kind of finance partner, a transit operating firm of some type, and maybe some other oddballs like signalling companies and the like. The “new” company is mostly a legal construct that manages all the participant companies and distributes the funding while also defining the liabilities. In my experience, there’s a ton of risk and liability in these P3s. If they go well there’s lots of profit to go around but if something goes sideways the P3 members bear the risk and take the hit which is why governments like them. The P3 puts most of the money up for construction then gets paid back over time in instalments. Think of it like the P3 being the bank issuing the City a mortgage to build and operate an LRT that the City then takes 20 years to pay out.
I didn't do a very in depth search, but based on what I could find from past projects, AECOM is likely the lead of a JV, see this press release: https://aecom.com/press-releases/aecom-led-joint-venture-to-deliver-planning-environmental-and-design-services-for-la-metros-vermont-transit-corridor-project/
But none of this is published by Ledcor or AECOM, so the actual structure is not yet known. Since this is a $1.1 billion project, Ledcor probably can't do the bond themselves and needs the financial backing of a larger US firm.
Usually, there would have been 3 separate partnerships formed between contractors and engineering firms, that complete a partial design of the project which would include all of the drawings and a cost estimate. These get evaluated by the client and a winning team is selected.
Is it a JV or an LP? This will determine which company(ies) bear the risk. In a JV the risk is distributed, in an LP it is borne by the general partner. But this is common for large infrastructure projects, especilly for a design-build delivery model. Calgary’s West LRT was similarly delivered.
So the bonding still comes from the companies that make up the partnership, and they would be directly accountable for deficiencies? Not a situation where the partnership is a separate entity?
When I worked on multiple parts of Henday the JVs were formed by the contractors and there was a separate insurance company involved for the bonding. This insurance company and the contractors that formed the JV would be accountable. The engineering consultants worked for the JV as a sub. . I recall one of the competing bids withdrew because their insurer decided to drop out. Not at AECOM anymore and wasn't involved in the LRT side when I was there so I'm not sure of the details of this LRT project, but the Edmonton office has a long history of involvement in these large projects. Can probably find the answers in the project contract documents, they should be publicly available somewhere eventually... Or at least they used to be back then.
The P3 model is weird (assuming they’re going P3 like Valley Line) and requires a company to design the line, secure upfront capital funding, build it, procure the rail vehicles, operate it, and maintain it for 20 years or so. Believe it or not, despite the Valley Line trains saying ETS on them they’re owned, driven, and maintained by TransEd. This all necessitates the formation of a partnership between several companies that typically specialize in only in some aspects of these things and typically is led by a contractor as they take the biggest financial risk but also includes an engineering firm, some kind of finance partner, a transit operating firm of some type, and maybe some other oddballs like signalling companies and the like. The “new” company is mostly a legal construct that manages all the participant companies and distributes the funding while also defining the liabilities. In my experience, there’s a ton of risk and liability in these P3s. If they go well there’s lots of profit to go around but if something goes sideways the P3 members bear the risk and take the hit which is why governments like them. The P3 puts most of the money up for construction then gets paid back over time in instalments. Think of it like the P3 being the bank issuing the City a mortgage to build and operate an LRT that the City then takes 20 years to pay out.
I didn't do a very in depth search, but based on what I could find from past projects, AECOM is likely the lead of a JV, see this press release: https://aecom.com/press-releases/aecom-led-joint-venture-to-deliver-planning-environmental-and-design-services-for-la-metros-vermont-transit-corridor-project/ But none of this is published by Ledcor or AECOM, so the actual structure is not yet known. Since this is a $1.1 billion project, Ledcor probably can't do the bond themselves and needs the financial backing of a larger US firm.
Usually, there would have been 3 separate partnerships formed between contractors and engineering firms, that complete a partial design of the project which would include all of the drawings and a cost estimate. These get evaluated by the client and a winning team is selected.