January 31, 2008

Strategic Partnership

MMM Group forms alliance for P3 transportation projects

PATRICIA WILLIAMS

staff writer

No stranger to public-private partnerships, Thornhill, Ontario-headquartered MMM Group Ltd. has forged a strategic alliance with Chicago-based H.W. Lochner Inc. to pursue large-scale P3 transportation projects in the United States.

Bob Nairn, MMM Group’s transportation director, said there is a huge potential market for such ventures as cash-strapped government agencies seek alternative approaches for building, maintaining and financing highways, bridges and other infrastructure.

One factor in the equation, he said, is the fact that the U.S. Highway Trust Fund is projected to run dry next year. That fund is used to finance maintenance of the interstate highway system and certain other roads.

“So what’s happening is that the states are turning to the P3 market,” Nairn said.

He said about 24 states now have legislation in place enabling public-private partnerships.

The strategic alliance is operating as the Lochner MMM Group, LLC.

MMM has extensive experience in public-private ventures in Canada and elsewhere. Lochner, a transportation engineering firm established in 1944, has a well-established track record in the transportation sphere.

The value of transportation projects currently undertaken by the two firms exceeds $5 billion.

“The group enjoys proven relationships with some of the nation’s leading constructors,” said Bill Longden, alliance director and MMM Group vice-chair. “Just as important for the public-private venture market, the group has ... the confidence and familiarity of the infrastructure investment community.”

Denny Ingham, senior vice-president, strategy and business development at Lochner, said state transportation departments or tolling authorities are seen as the key potential clients for the alliance’s services.

He said Florida, Texas and Virginia are the leaders at the moment in the P3 realm, with active projects already under way.

“But there are a lot of other states that are gearing up, developing legislation that allows them to go in that direction and just getting comfortable with the concept,” Ingham said.

“I think governments generally are risk-adverse. They want to make sure they are comfortable with this procurement process. They’re sitting back to some degree and letting others test the waters first and see how it works. Certainly, they are learning from the folks in Canada.”

The alliance partners became acquainted while pursuing work in Florida. Lochner has four offices in that state.

“We saw this (partnership) as an excellent fit,” Ingham said. “We bring complementary skills to the table.”

The alliance currently is pursuing a highway project in Florida.

Nairn said that Canada’s P3 market is about five years ahead of that of the United States.

“That’s why we’re there,” he said.

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