NBSL Project Update January 15, 2014

1. NBSL Project Update January 15, 2014

2. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

3. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

4. Strategic Importance of Champlain Bridge Corridor • The Champlain Bridge is one of the busiest bridges in Canada and has a vital role in the Canadian economy • Approximately 40-60M vehicles and 11M public transit users/year • $20B in Canada-U.S. trade crosses the bridge every year • The project is one of the largest infrastructure projects in North America • A series of studies have been undertaken to ensure the projectmeetshightechnical and environmental standards while representing value-for-money for taxpayers

5. Business Case • Prepared by PricewaterhouseCoopers (PwC) in conjunction with a team of expert technical consultants (Steer Davies Gleave and Arup-led team) • Consulting team performed a rigorous financial and technical analysis of the Project • Business case adhered to best practices and the methodologies and principles set out in the PPP Canada Business Case Guide • Informed by a number of studies • Preliminary Design and Costing (PD&C) by Arup • Tolling and revenue forecasts by Steer Davies Gleave • Primary objective of the business case was to examine different procurement models and determine if cost and other benefits could be achieved using a PPP • Business case recommends a detailed procurement model and process, including a defined scope

6. Dissemination of Information • Backgrounder on the business case is available on Transport Canada’s website: www.tc.gc.ca/nbfsl • To protect integrity and public funds, does not include information that could influence the competitive procurement process and result in a lower return for taxpayers • Specific project costs • Traffic and revenue forecasts • Financial information such as assumptions, project funding, payment mechanisms • Information such as contract amount, value-for-money, and final bridge design will be made public following the conclusion of the procurement process in summer 2015 • Consistent with approach taken for projects across Canada (A-25, A-30, Port Mann Bridge, etc.)

7. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

8. Project Drivers

9. Project Overview Longueuil Jacques-Cartier Bridge Autoroute Bonaventure (federal portion) Victoria Bridge Montréal Alignment with A-10 New Bridge for the St. Lawrence Clément Bridge New île des Sœurs Bridge and work on île des Soeurs Brossard Champlain Bridge Reconstruction and widening of A-15 (federal portion)

10. Project Highlights NBSL • Accelerated in-service date of 2018, construction to start in 2015 • Three lanes for cars, one lane for public transit in each direction • Dedicated public transit lanes will accommodate light rail transit as recommended by Government of Québec • Phasing of light rail system will be accommodated • Multi-use path for pedestrians and cyclists • To be located on North side of bridge to provide better view of downtown Montreal • Uninterrupted use of existing Champlain Bridge during construction A-15 • Three lanes per direction, which will provide consistency throughout the corridor and mitigate current bottlenecks – in-service date by 2020 • Will heighten safety in the corridor by increasing traffic fluidity

11. Project Scope • The scope of the Project to be included in the PPP is: • Construction of the new bridge for the St. Lawrence, including Autoroute 10 approaches in Brossard and the installation of tolling equipment and facilities • Construction of a new île des SœursBridge and highway on île des Sœurs • Demolition of the current île des Sœurs Bridge • Reconstruction and widening of the federal portion of Autoroute 15, including the operation and minor maintenance of Autoroute 15 from the start of the PPP contract • Operation and maintenance of all newly constructed infrastructure for 30 years • Surface operation and maintenance of the Clément Bridge and Bonaventure Expressway

12. Outside of Scope • The following elements will not be included in the PPP contract: • Demolition of existing Champlain Bridge • Unrelated to providing a replacement NBSL corridor • Will be tendered after corridor is delivered • Operation, maintenance, and demolition of the temporary île des Sœurs causeway-bridge • Causeway-bridge will be built and in service by early 2015, before the selection of a private partner • Operation and maintenance of the ice breaking structure • Lifecycle and major maintenance of the Clément Bridge and the Bonaventure Expressway

13. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

14. Preliminary Design and Costing (Arup) • Objective was to evaluate bridge options at 5% design, develop a preferred design, and estimate costs of the preferred option for the purposes of the business case • Single vs. multi-level? • Type of structure? • 1, 2, or 3 decks? • The preliminary design does not represent a final technical solution or final associated costs • Will only be determined by the selected proponent, through the competitive PPP procurement process

15. Preferred Bridge Design Selection Process • The preferred preliminary design was chosen following a multi-stage process

16. Options Evaluated for New Bridge • Several options were examined as part of our analysis, including: • Various configurations for the approaches and the Seaway crossing; • Various span lengths (from 80m to 800m) • Various materials (steel, pre-stressed concrete) • Several levels • Two or three corridors • The options analyzed include box girder bridges, extradosed bridges as well as a long span cable-stayed bridge and a long span suspended bridge

17. Screening Considerations • Many factors supported the option selection process, including: Construction • Construction cost and duration • Construction complexity • Construction over the Seaway Operation • Suitability for a light rail system • Relative operation and maintenance cost • Winter suitability • Transition from buses transit lanes to a light rail system Project impact • Environmental impact

18. 2nd Stage Screening Considerations • A multi-level bridge is not recommended because of the additional complexity of the works on the approaches to the bridge, the visual and environmental impact such an infrastructure would have on both île des Sœurs and the South Shore and the complications for the connections to the approach roads • A three corridor bridge will ensure a dedicated lane to transit

19. Preferred Alternative • The preferred alternative combines the benefits of two of the options in order to achieve the optimum configuration • Box girder for the approach spans, cable supported over the St. Lawrence Seaway • Three decks: two decks with three lanes each for cars and trucks; middle deck for transit (buses, convertible to a light rail system) • Multi-use path next to one of the car decks Approaches: Concrete box girder Seaway: Cable supported Configuration:

20. Project Costing • Design and construction costs estimated from the beginning at $3 to $5 billion for the corridor Project • Based on pre-feasibility study concerning the replacement of the Champlain Bridge conducted in 2011 • Constitutes a very preliminary, conservative estimate with a wide range of hypotheses • Wide range is typical at the pre-business case stage and for a project of this scope and complexity • The preliminary design (5% design) for each component of the Project was used as the basis for estimating design and construction costs for the purposes of the business case • At this stage, it is prudent to continue to consider cost estimates as preliminary • Final project costs will be determined by the end of the competitive PPP procurement process

21. Cost Comparisons • The NBSL is not a just a replacement bridge. It will offer new features (a dedicated transit lane, a multiuse path, a lifespan of over 100 years) and will meet very high standards • It is challenging to make simple comparisons with other infrastructure projects. • Cost depends on many factors and the NBSL is a complex project with a large size and scope • Not only includes the new bridge for the St. Lawrence (3.4 km), but also highway work onîle des Sœurs, a new île des SœursBridge (470m) and the reconstruction of the federal portion of Autoroute 15 (3 km) • New bridge for the St. Lawrence includes six lanes for traffic and a dedicated public transit corridor to accommodate a light rail system

22. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

23. Traffic and Revenue Forecasting • A variety of toll rates comparable to current rates in the Montreal region were examined • Rates aim to achieve an appropriate balance between capital cost recovery and maximizing traffic fluidity • Additional studies and consultations will be completed prior to the establishment of a toll rate for the Project • A-25 and A-30 toll rates wereonly confirmed a few months before opening

24. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

25. Procurement Objectives • Ensure the Project meets Transport Canada’s design, operational and lifecycle performance criteria • Deliver an infrastructure of the highest quality while being mindful of the use of public funds • Enable appropriate risk allocation and mitigation with creditworthy counterparties • Benefit from the private sector’s innovative solutions and best practices for similar projects • Ensure a fair, transparent, competitive procurement process The choice of procurement model will greatly impact the attainment of these objectives

26. Traditional Model • Under this approach, would likely use Design-Bid-Build (DBB) • Project design procured separately from project construction • Transport Canada would hire an engineer to complete the design and divide Project into different components • A separate contractor would likely be retained for the construction of each component • Transport Canada would supervise all construction work • Well understood process • Allows for Project to be divided into smaller components • Direct involvement by Transport Canada • Higher risk of delays and increased costs • No recourse for delays or poor performance • Less opportunity for private sector innovation • Design does not benefit from input of construction contractors – could result in a lack of constructability

27. PPP Approach • Under this approach, would use Design-Build-Finance-Operate-Maintain (DBFOM) model • Long-term responsibilities bundled together and transferred to private sector partners • All components of the project combined into the same contract • Commitment to deliver Project for a fixed price and by a specific date • Payments only made at specific milestones • Up-front planning and procurement costs higher • Typically longer planning and procurement (although time is made up during construction) - significantly reduced time in this Project • Cost overrun and delay risks transferred to the private sector • Incentives to fulfill responsibilities over the long term • Harnesses innovation • Payment deductions are made in case of performance failures

28. Business Case Recommendation • Procure the Project as a PPP • The Value-For-Money (VFM) and qualitative analysis clearly demonstrate the advantages of procuring the Project using this approach • Advantages include: • Adherence to the project timelines • Substantial risk transferred to the private partner: incentives for construction to be completed on budget with penalties for late delivery • Model supported by several major road and bridge projects which have been successfully carried out in Canada during the past ten years (e.g., A-25 and A-30 in Quebec, Golden Ears Bridge and Sea-to-Sky Highway in B.C., etc.) • Design which better takes into account construction constraints and operating needs as a result of an integrated team • Opportunity to attract the world’s largest and most sophisticated bridge and road designers and builders, with the partnering of key local businesses • Competitive process induces greater incentive for design and construction methodology innovations • Enhanced traffic management during construction since a single consortium will be responsible for the entire corridor • Preventive and lifecycle maintenance are contractual obligations

29. Value-For-Money Analysis • VFM analysis compares the cost of undertaking the Project through traditional procurement to the cost of the Project as a PPP by: • Estimating Project costs • Developing assumptions for the financial analysis • Developing financing structure for the PPP model • Identifying, quantifying and allocating risks • Estimating whole-life, risk adjusted cost of each procurement model • Must demonstrate positive VFM – which means that it would be less expensive – for the Project to proceed to PPP procurement • The PPP procurement model indicates cost savings between 5% and 18% of the traditional model cost • A sensitivity analysis confirmed the robustness of the findings in the face of varying assumptions

30. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

31. Procurement Process • A two-phase procurement approach is recommended • This process is consistent with best practices for large PPP procurements, respectful of PPP Canada guidelines and will be familiar to bidders • Request for Qualifications (RFQ) • Public process open to all interested parties • Bidders evaluated on several qualifications to carry out the Project successfully • Short listing of a specific number of bidders • Request for Proposals (RFP) • Short-listed bidders will submit binding technical and financial proposals, including a fixed price and schedule • Proposals will be evaluated to verify compliance with technical (including architectural quality) and financial criteria

32. Industry Information Sessions • Information sessions are planned in winter 2014 in order to keep industry apprised of the Project and upcoming milestones • These sessions are essential to ensuring continued market interest in the project which will maximize competition, ensure higher quality bids and better value for taxpayers • These sessions will also provide an opportunity for interested businesses to interact and explore opportunities to establish partnerships • The information sessions will provide greater detail with respect to issues such as: • Project scope; • Detailed timelines and key milestones; and • The project financing structure • Sessions with small and medium enterprises will also be organized to promote local and regional expertise

33. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

34. Project Timelines

35. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

36. Architectural Quality • Prescriptive architectural directives will be developed in collaboration with an architectural review panel • The directives could address elements such as structural form, lighting, views to and of the bridge, etc. • The design will be developed by world renowned architect PoulOve Jensen, supported by local firm Provencher Roy + Associés and members from the Montreal design community • Role will be to develop clear directives to be adhered to by the proponents • The directives will be incorporated in the procurement documents and bidders will be required to comply with them • The directives will be made public at the RFP launch; the final design of the bridge will be made public at the end of the RFP process

37. Public Transit • The Government of Canada has clearly stated that the Project will include dedicated transit lanes • In June 2013, the Government of Québec confirmed that a light rail transit system is the preferred mode of transit for the corridor • Accordingly, the Government of Canada has been working closely with the Agence métropolitaine de transport and the ministère des Transports du Québec to ensure the integration of a light rail system • The Government of Canada will provide the right of way for the light-rail system within the Project corridor • Federal funding for the light rail system is also available via the New Building Canada Plan should Quebec wish to prioritize the project

38. Presentation Outline • Introduction • Project overview and scope • Preliminary engineering • Traffic and revenue forecasts • Procurement options analysis • Procurement Process • Project timelines • Key issues • Project governance

39. External Project Governance Structure • External Stakeholder Advisory Committee • Transport Canada • Ministère des Transports du Québec • Agencemétropolitaine de transport • Infrastructure Québec • Ville de Montréal • Ville de Longueuil • Ville de Brossard Integrated Project Team Transport Canada, PPP Canada, Public Works and Government Services Canada Legal Group Policy and Communications Group Technical Group Procurement Group Environment and Aboriginal Affairs Architectural Quality Engineering and Urban Integration Public Transit Design criteria working group A15 Working Group Meetings and External Consultations Architectural Review Panel Contractual aspects working group South Shore Working Group Mobility Montréal – Champlain Sub- Committee Meetings and External Consultations Legend: Project Team Technical components ExternalStakeholders

40. For more information on the project, please consult the new bridge for the St. Lawrence section on Transport Canada’s website: www.tc.gc.ca/nbfsl