February 19, 2007 Unsolicited New Mississippi River Bridge Public-Private Partnership Proposal presented to the Missouri Department of Transportation June 2006 Confidential

1 Contents New bridge rationale 2 PPP approach 3 Project scope 4 Tolling basis 5-6 Traffic modeling methodology and forecasts 7-11 Sources and uses of funding 12 Sources of public-sector capital 13 Financing issues 14 Conclusions and recommendations 15

2 1 – New Bridge Rationale The Poplar Street Bridge: -- provides the only downtown interstate link -- stressed by over-capacity at peak times -- suffers from safety and design shortcomings -- requires major maintenance reducing its capacity for extended periods in the future A New Mississippi River Bridge: -- adds capacity and predictability at peak times -- strengthens system linkages and community access -- enhances travel safety and efficiency -- enhances regional economic growth and development

3 2 – PPP Approach We propose to use a Public-Private Partnership (PPP) to build a new Mississippi River Bridge with tolling PPP stretches limited public-sector resources by capturing private-sector funding participation in long-term concession agreements PPP can finance, design, build, operate, maintain, and deliver new infrastructure years sooner and more cost effectively PPP structures can generate more up-front cash than can be raised in a traditional public authority bond sale PPP can generate value from tax treatment of depreciation and interest cost deductibility

4 3– Project Scope Our PPP proposes to build the revised EIS concept solution, with an initial 6-lane bridge now and a second four-lane span can be built later as traffic demand warrants Our PPP includes relocating I-70 as a four-lane interstate facility from a point east of Il Rt. 203 in Illinois to I-70 on the north side of downtown St. Louis in Missouri with programmed access The I-64 Connector, which was excluded as an initial project in the revised EIS, is important to attract some of the significant I-64 traffic volumes to the new bridge Our traffic and financial modeling assumes that the I-64 Connector will be provided by the Illinois DOT, by the time the new bridge opens Our PPP assumes that procurement can be completed in two years and that project construction can begin in 2009 and be completed in five years by 2014 We have assumed a 75-year concession agreement

5 4 – Tolling Basis Tolling collection proposed to be both travel-speed, state-of-the-art “open-road lanes” for regular and commuter users and “barrier lanes” for occasional and interstate users Off-Peak Toll: $1 for cars and $3 for trucks Peak-Period Toll: $3 for cars and $6 for trucks Tolls are to be collected in each direction and increased with an inflation-adjusted factor over the life of the concession

6 Value of Tolling to Users Motorists can continue to use existing access routes and bridges that are not tolled depending on their needs and time of day— signage can inform non-local users of alternate routes Motorists will choose to use the new, tolled bridge because many commercial and private consumers will value what the new, congestion-free toll bridge can offer:  Time-savings  Predictable travel time  Convenience  Comfort, and  Added Safety

7 Modeling Methodology #1 – New Model We used the latest East-West Gateway ‘Voyager-CUBE’ model for this PPP proposal, modifying it to correct for some significant imperfections for this kind of analysis This model covers the St. Louis region (see next image) The trip patterns are based on surveys undertaken in 2001, and we understand that the model is validated to 2002 traffic conditions The model is a conventional ‘four-stage’ model of trip generation, trip distribution, modal split, and assignment Only the highway assignment stage of the model has been run, which assumes that the NMRB only affects the routing of trips and not trip generation, trip distribution, or mode choice (This assumption could be changed in future, more detailed analyses)

8 Highway Network Cube Map

9 Modeling Methodology #2 - Diversion The Voyager-CUBE model assumes high rates of diversion of traffic from a new tolled facility to the existing free bridges The model uses an ‘all or nothing’ assignment technique that causes instabilities and traffic ‘flipping’ from one bridge to another according to traffic consultants Diversion rate adjustments have been made for this PPP proposal More detailed costly and time-consuming work will be needed to validate the diversion rates and other model features when the Department initiates a procurement process

10 Modeling Methodology #3 - Future Year Matrices (2020) Car growth factor was calculated at 1.26 Truck growth factor was calculated at 1.34 An AM peak hour and average off peak hour models have been assigned and the results combined to forecast average daily flows (AADT)

11 4 – Forecast Traffic Flows Scenario Toll Levels in 2009 (car/truck) AADT Downtown Bridges AADT 2020 NMRB AADT 2030 NMRB No-Build0213,00000 NMRB 6 lanes Off-Peak: $1/$3 Peak: $3/$6 221,00028,00032,000

12 5 – Sources and Uses of Funding Sources & Uses of Fundingin thousands of $ Debt Financing $ 722,869 Equity Financing 108,958 Federal Funding Contribution 239,000 Total Sources $1,070,827 Total Construction Funded with Debt 481,671 Total Construction Funded with Equity 108,958 Total Construction Funded with Federal Funds 239,000 Capitalized Interest 115,002 Debt Service Reserve Fund 20,863 Transaction and Development Costs 105,333 Total Uses $1,070,827

13 6 – Sources of Public-Sector Capital Federal funding: $239 million in SAFETEA-LU funding used in our financial model Illinois portion --$150 million—Section 1301 Projects of National and Regional Significance --$14 million—Section 1934 Transportation Improvements Missouri portion --$50 million—Section 1114 Highway Bridge Program --$25 million—Section 1934 Transportation Improvements Our financial model does not use: $210 million in Illinois state funding, or $15 million in Illinois state funding for the Tri- Level interchange, which includes the I-64 Connector

14 7 – Financing Issues We believe this project concept can be funded with a combination of tolling at acceptable rates and available federal funding Pending validation of the traffic model and projected traffic flows for the new bridge, financial outcomes could vary from the ability to fund eight lanes now to the need for some form of state funding contribution ZAI has assumed that the private entity would achieve "tax ownership" of the facility, thereby realizing certain depreciation treatment and application of other rules—We believe there is reasonable basis for such tax treatment, however should tax ownership treatment ultimately not be allowed, our financial analysis and resulting conclusions would necessarily change

15 8 – Conclusions and Recommendations Pending more detailed model validation, our PPP is prepared to fund a six-lane bridge now with connections to I-70 on both sides of the river Our preliminary review of the available data suggests that the Department may wish to proceed with issuing a procurement for formal PPP submittals