Massachusetts sets up P3 panel ahead of highway rest stop RFP

Massachusetts Gov. Maura Healey will create a public-private partnership commission as the state revives a procurement process for a highway rest stops P3 that stalled last year amid allegations of impropriety.

The commission, expected to be formed this spring, will include four appointees by the governor with transportation expertise. The Senate President, House Speaker and state Treasurer will each appoint one additional member.

The commonwealth in 2009 passed P3-enabling legislation for transportation projects that included the creation of the commission but the panel has since been largely stagnant. It is being revived now to provide additional oversight as MassDOT gears up to re-bid a controversial P3 for its 18 highway service plazas. The proposal calls for private partners to enter into a 35-year lease to finance renovations to renovate or replace the plaza buildings backed by retail revenue from the plazas.

Several states have entered into similar P3s, including the New York State Thruway Authority's 33-year design-build-operate-finance-maintain concession that featured $269 million of tax-exempt private activity bonds.

Massachusetts' previous effort collapsed last year amid allegations of unfair practices, the abrupt exit of the winning bidder and the resignation of then-Transportation Secretary Monica Tibbits-Nutt.

MassDOT last June tapped Blackstone-backed Irish retailer Applegreen for a 35-year lease, sparking an outcry from losing bidder Global Partners (GLP), whose bid offered the state more long-term revenue. Global sued the department over what it said was preferential treatment of the winning bidder. Following the litigation and disclosure of emails, Applegreen dropped out.

In October, MassDOT said it would restart the procurement process, and the following day, Transportation Secretary Monica Tibbits-Nutt announced she was stepping down.

The new P3 commission will now provide "independent oversight throughout development of the Request for Proposals," MassDOT said last week. MassDOT will pick the winning bidder, not the commission, it said.

The latest effort will bundle the plazas into three groups, giving potential bidders the ability to submit proposals for one, two or three groups.

MassDOT will host an industry day March 25 for private partners and plans to release the RFP in the summer, it said.

"This is the first public private partnership procurement the commonwealth has undertaken for highway facilities, and our goal is to create a process that brings forward innovative proposals while delivering long term value for travelers and taxpayers," said transportation undersecretary and highway administrator Jonathan Gulliver in a statement. "By structuring the plazas into multiple bundles, we are creating stronger competition and opening the door to new ideas that will modernize these facilities and deliver the best long-term value for Massachusetts."

The Office of the Inspector General on Feb. 27 released a report on the previous bidding process that found problems with conflict of interest disclosures and violations of the rules of contact during procurement among other flaws. Meanwhile, state Sen. Mark Montigny, chair of the Senate's post audit and oversight committee, has scheduled a March 24 hearing with interim transportation secretary Philip Eng.