If you think public-private partnerships are a promising alternative, then Project Neon just lost some of its luster.
Due to affordability, the Nevada Department of Transportation (NDOT) decided to reject the idea of using public-private financing for work to be done on I-15, which is being called Project Neon and will be the largest highway construction undertaking in state history. NDOT will go with government issued bonds to pay for work to be done on the highway, which is expected to cost $700 to $800 million.
“The ground has shifted beneath our feet in terms of interest rates and the best delivery method,” said Nevada Gov. Brian Sandoval.
When the P3 was first approved in June 2013, the project was expected to cost $602 million, but now the estimate sits at $740 million. Higher interest rates are indeed the primary driver of the spike, but a bigger project footprint and increased maintenance costs also are to blame.
Project Neon is expected to break ground in late 2015 or early 2016, and Sandoval said the switch from P3s to bond financing has not affected the schedule.
