1

Detroit River International Crossing (DRIC)New International Trade Crossing (NITC)

Briefing for the Transportation Border Working GroupNovember 8, 2012

2-1-

Windsor-Detroit Trade Corridor:Critical for Canada’s Economic Security • Canada’s Busiest Crossing

– $126 billion of two-way surface trade – 28% of total Canada-U.S. trade– Over 220,000 jobs in the region depend on this border crossing– Consists of four crossings: Windsor-Detroit tunnel, Ambassador Bridge,

truck ferry and Canadian Pacific Railway tunnel

Ambassador Bridge carries a third of Canada-U.S. truck traffic

3

• Corridor is facing capacity challenges• Inadequate direct highway access (through central Windsor) and

customs facilities • New bridge a key priority for shippers and manufacturers• Only major Ontario-U.S. crossing without significant

redundant capacity for truck traffic

Commercial Traffic Bridge Crossing US Entry

Trucks per day (2011)

Windsor - Ambassador Detroit 7164Sarnia - Blue Water Port Huron 3970Fort Erie - Peace Buffalo 3433Queenston / Lewiston Lewiston 1916

Rationale for the Project

Project Location—Windsor-Detroit

4-4-

I-75

•Negotiated a Crossing Agreement with Michigan for Canada to implement project

•Continuing outreach and advocacy efforts in Michigan and Washington

policy•Vigorously defending legal actions against DRIC •Developed a legal strategy to shield DRIC from existing and future

legal challenges in Canada

legal

•Working with U.S. government to fund U.S. plaza •Committed $550 million to fund Michigan project components•Developing Business Case for P3 arrangement and project funding •Purchasing land and undertaking utility relocation

financial

5

Canada pursuing a three-pronged strategy to advance the project

6

Policy: Canada-Michigan Crossing Agreement, June 2012• Framework for each party’s roles and responsibilities• Project funded and delivered by Canada—no cost to Michigan

– US responsible for its customs plaza• Buy America waiver to use only Canadian & American iron and steel• Requires U.S. Presidential permit to become effective in U.S.

“an investment in the future of the North American economy”—Prime Minister Harper

Policy: Governance Structure   

7

State of Michigan(Governor)

Michigan Strategic FundMichigan DOT

International Authority

Government of Canada

Windsor-Detroit Bridge Authority

Concessionaire

Policy: Crossing Agreement • Windsor Detroit Bridge Authority responsible for management and

procurement– Responsible for delivery of project on behalf of Canada and Michigan– Conducts procurement process and enters into contractual agreement

with concessionaire– Oversees construction and manages operation of the crossing – Vehicle to flow Canada’s investment to project

• Windsor-Detroit Bridge Authority created October 2012– Approved by the Prime Minister – Canadian Crown corporation with 1

interim director– Complete Authority to be established in 2013 – 5 directors

• International Authority reflects shared governance– 50/50 participation – 3 Canadian and 3 Michigan members (after

Authority fully established)– Approves procurement process and final agreement 8

9

SECRET

Legal: Bridge to Strengthen Trade Act• Introduced in October 2012 as part of the Budget Implementation

Act II– Exempts DRIC construction from requiring certain permits, approvals or

authorizations under a number of federal laws – Clarifies corporate governance issues and provides minor amendments to

the International Bridges and Tunnels Act

• Provides certainty to private sector bidders that the project will not be delayed or stopped by frivolous lawsuits on the Canadian side

• DRIC must meet all obligations under relevant federal legislation pertaining to fisheries, species at risk and navigation

• DRIC must comply with the commitments made in the federal environmental assessment report

10

Windsor-Detroit Bridge Authority

Canada

Canadian Port of Entry

I-75 Interchange

Bridge

International Authority

Canada Michigan

Approvals/oversight as per the Crossing

Agreement

MichiganFunding/PaymentsProvides assistance

as requested by the Crossing Authority

U.S.POE

MIPOE

Financial: Procurement Structure   

11

Financial – Timelines• Budget 2007 confirmed Canada’s intention to pursue a P3

– To design, build, finance and operate new crossing system under long-term concession

• DRIC received environmental approvals in both Canada & U.S. in 2009

• Windsor Essex Parkway construction underway, completion expected 2015– Budget 2007 committed Canada to contribute up to 50% of eligible capital costs

• Property acquisition and utility relocation– Several industrial properties still to be acquired in Canada, utility relocation design

beginning – No properties have been acquired in the U.S., utilities also have to be relocated

• Project business case being completed– Based on an investment grade traffic and revenue forecast; robust project cost

estimates; and market soundings

• Timelines once approvals obtained and pre-procurement work completed– 18 months for actual project procurement process (Request for Qualifications - Request

for Proposals - financial close)– Construction expected to take up to 5 years

12

Procured as part of the P3 package?

Yeswill be included in P3

GSA works with Transport Canada/Crossing Authority to determine specifications and funding

Economies of scale

Integrated construction completion

Canada will require cross default provisions to ensure the delivery of the U.S. POE on a consistent timeline to avoid payment of penalties to concessionaire

Canada requires a firm assurance from U.S. Government on construction and operating commitments, including staffing, and

timeframes before proceeding with the project

Financial: Procurement of U.S. port of entry  

NoIndependently procured by GSA

• Confirm U.S. commitment for funding and required approvals

• Develop project business case– Complete U.S. due diligence– Seek approvals in Canada

• Complete establishment Windsor-Detroit Bridge Authority

• Establish International Authority

• Continue with property acquisition and utility relocation design in Canada

• Continue to manage legal risks– Vigorously defend legal and trade challenges– Passage of Bridge to Strengthen Trade Act 13

Next Steps