On Monday, I chronicled the year in review for Reason Foundation's Innovators in Action 2012. Today, I'm publishing the first interview of Innovators in Action 2013, available here. I recently had the privilege to sit down with Michael Cheroutes, director, and Nick Farber, enterprise specialist, of the Colorado Department of Transportation's High Performance Transportation Enterprise (HPTE) to discuss their work.
States are struggling to adequately invest in infrastructure, a challenge compounded by the declining purchasing power of revenue from the federal gas tax and lower revenue from more fuel efficient automobiles. Meanwhile, continued deadlock at the federal level fails to inspire confidence that help is coming. Innovative policymakers, like the ones at HPTE, are applying new approaches to solve these problems.
Read an excerpt from the interview below:
Harris Kenny, Reason Foundation: How is HPTE unique from the rest of the Colorado Department of Transportation?
Michael Cheroutes and Nick Farber, HPTE: HPTE is unique because it is the innovative transportation finance arm of CDOT. HPTE’s vision is to pursue public-private partnerships (and other innovative and efficient means of financing multimodal projects), make sure innovative projects are properly prioritized and accelerate delivery of those projects to facilitate the state’s economic recovery – we’re much more than just a tolling agency.
Kenny: What is one of HPTE’s most successful projects underway today?
Cheroutes and Farber: One would be Phase 2 of the US 36 Project, which is currently underway. The US 36 Project is an eighteen-mile (from downtown Denver to Boulder), 50-year DBFOM project. Construction for the project is an estimated $100 million, in addition to operation and maintenance. US 36 is funded in part by tolls paid to the concessionaire. CDOT, the Regional Transportation District (RTD), the Denver Regional Council of Governments (DRCOG) and some local governments are also contributing funds to help finance the project. In other words, private equity is playing a role, but it’s not all private equity.
Kenny: What are some upcoming projects that HPTE is excited about?
Cheroutes and Farber: We issued an RFP for the I-70 East project, which, among other things, will replace a viaduct going into Denver on the east side of the city that was built in 1964. The RFP is specifically seeking a financial advisor to help evaluate options on how to finance the preferred for the I-70 East project.
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