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Committee hears MDOT explanation of I‑75 public‑private partnership and availability payments
Summary
MDOT said the I‑75 project was delivered as a public‑private partnership; the private partner paid construction costs up front and MDOT will make availability payments over a multi‑decade contract term.
During committee questions about major project costs and long‑term obligations, MDOT officials explained how the I‑75 project was financed and structured.
Demetrius Parker described I‑75 as a public‑private partnership (P3): "It was set up as a P3, a public private partnership. So, it is set up where they're going to continue to operate and maintain that roadway for the next 25 years for us. And so we are we are paying them availability payments, which is basically the company up fronted the cost for all of the work and construction, and we're we're paying them back over, I think it's probably 25 years with availability payments."
Parker said availability payments include built-in financing costs and are contractually scheduled; he distinguished those payments from conventional bonded debt but described them as scheduled contractual payments that include principal and interest components.
Why it matters: Long-term contractual obligations affect future appropriations and maintenance planning. Committee members said they are concerned about paying for past projects while trying to fund future investments.
Ending: MDOT said it will provide the committee with the payment schedule and additional details about outstanding obligations on the I‑75 P3 contract.
