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New International Trade Crossing Agreement with Canada

New International Trade Crossing Agreement with Canada

The Governor has named this project the "New International Trade Crossing" (NITC). The total cost of the project, including plaza and highway/interchange work on both sides of the bridge, is estimated to be over $3.5 billion. Highway and plaza work on the Canadian side of the bridge are estimated to be nearly $1.8 billion, while construction of the crossing itself is estimated to cost roughly $1 billion. The remaining highway and plaza work on the Michigan side of the bridge is estimated to cost roughly $800 million. The agreement would provide for joint, Michigan-Canadian ownership of the bridge, with the crossing being constructed and operated by a private entity, known as a concessionaire, pursuant to a public-private partnership (P3) agreement. The concessionaire would be responsible for both the cost of constructing and operating the new crossing.   The remaining costs would be borne by the Canadian and federal governments.   The project would be competitively bid and control of the U.S. side of the bridge would revert back to the state after the expiration of the concessionaire's lease, contained in the P3 agreement.

The provisions in the agreement are subject to funding by Canada, the United States government or the private concessionaire.   The agreement explicitly states that Michigan has no obligation to fund any International Crossing Costs.   It also states that Michigan is not liable for the crossing rather the Crossing Authority is liable for the construction, financing, maintenance, improvement, etc. of the project.   Toll revenue will be collected by the Crossing Authority on the Canadian side of the bridge. The revenue will be used to repay Canada, pay the concessionaire and pay for any other allowable purpose relating to the construction, operation or maintenance of the bridge. Once these financial obligations have been met, toll revenue will be split equally between Michigan and Canada.

How does this impact the construction industry?

The agreement establishes a "Crossing Authority" made up of representatives from Canada. The Crossing Authority is responsible for issuing an RFQ and an RFP for the design, engineering and construction of the bridge project.

The RFP would have to be approved by an "International Authority." The International Authority is comprised of three members from Michigan (appointed by the Governor) and three members from Canada. Meetings of the International Authority must be open to the public. Once approved, the RFP will be issued and a private concessionaire will be selected to design and build the new bridge, plaza and highway interchanges. Once selected, the private concessionaire will enter into a public-private partnership (P3) agreement with the Crossing Authority, subject to the approval of the International Authority. The P3 agreement must contain a clause requiring that all iron and steel used on the bridge component of the Canadian crossing be produced in either the United States or Canada.

A great deal of authority is given to Canada regarding the RFQ and RFP process which will directly impact those Michigan companies wanting to bid on this project.   Although the agreement stipulates that discrimination can not occur, the drafting authority of the RFQ and RFP are not in the hands of Michigan.   However, the approval of the RFQ and RFP submission as well as the approval of the application lies in the hands of the "Internation Authority" which is comprised of three members from Michigan and three members from Canada.

Section 5 (page 19-24) discusses the RFQ/RFP Process along with Schedule B.