The Massachusetts Department of Transportation (MassDOT) is taking another pass at a procurement to redevelop 18 service plazas on highways across the state, but is making several changes to their procurement approach and re-starting a state P3 Commission for additional oversight. The procurement, which was initiated in March, will be the state’s second attempt at a first highway P3.
Hopefully the current procurement will go better than the last one, because it was nothing short of a disaster. MassDOT’s original service center P3 procurement fell apart last fall after multiple lawsuits from a losing bidder, a nasty public relations campaign disparaging the procurement, and the winning bid team walking away from the deal during final negotiations. The state’s Secretary of Transportation resigned less than a month later.
MassDOT’s original attempt at a service plaza P3 was modeled after a very similar concession to redevelop and operate 27 service areas owned by the New York State Thruway Authority. That concession included a $450 million investment plan and was awarded in 2021. Last November, the Thruway Authority announced that all 27 service areas were reopened and in operation.
The New York service area P3 was awarded to a team led by Applegreen and Blackstone Infrastructure Partners. Applegreen is a roadside fuel and service area operator with operations in Ireland, the United Kingdom and the United States. The company was taken private by Blackstone around the time of the New York service area concession. The Applegreen/Blackstone team was also selected as the preferred bidder for the original MassDOT service plaza P3 last year.
In August, the E-470 Public Highway Authority in Colorado announced the award of a much smaller contract to redevelop four service plazas in the Denver area to an Applegreen-led team. That project will include a $70 million investment. The installation of electric vehicle charging stations was an important component of both the New York and Colorado projects, as well as the failed MassDOT procurement last year.
Back to the Drawing Board
MassDOT announced that it would be making another attempt to procure redevelopment contracts on the same 18 service plazas last month. This time the state is breaking the 18 service plazas into three separate bid packages, and prospective bidders can make proposals on one, two, or all three packages. MassDOT’s intent with that change is to increase the pool of potential bidders for the project and increase competition.
