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Sepulveda Transit Corridor Project

Quantitative Risk Analysis to Support VfM Analysis

Sepulveda Transit Corridor Study Area Map

Los Angeles County Metropolitan Transportation Authority (LACMTA) 


Los Angeles, CA


Alternative Delivery/ P3 Evaluation
Risk Assessment and Risk Management

Sepulveda Transit Corridor Study Area. Source: LA Metro

SHA Analytics, LLC is part of the financial advisory team, collaborating with Metro in the comprehensive evaluation of procurement options for the Sepulveda Transit Corridor Project. The Sepulveda Transit Corridor Project is a significant public transportation initiative in the Los Angeles area, with the goal of improving transit options and reducing congestion along the Sepulveda Pass, a heavily traveled transportation corridor connecting the San Fernando Valley to the Westside and other parts of Los Angeles. The primary objective of the Sepulveda Transit Corridor Project is to provide high-capacity, rapid transit options to alleviate traffic congestion, improve transportation connectivity, and enhance mobility in the region. In pursuit of these objectives, Metro has initiated a Pre-Development Agreement (PDA) with private-sector teams to develop design concepts for project alternatives. The transit technologies being considered encompass heavy rail transit and monorail transit, while the delivery options range from conventional methods to public-private partnership (P3).


Our specific role involves leading a quantitative risk analysis of the project's cost and schedule. This analysis encompasses an evaluation of risk allocation to assess the potential transfer of risk between the public and private stakeholders under a P3 procurement approach. The outcomes of this quantitative risk analysis directly inform the Value-for-Money (VfM) assessment, which aids Metro in selecting the procurement option that optimizes value for the agency. A VfM analysis in the context of a potential P3 project serves as a thorough process for evaluating the efficiency and effectiveness of public resource utilization. P3 projects represent collaborative endeavors between the public sector and the private sector for the purpose of designing, financing, constructing, operating, and maintaining public infrastructure or delivering public services. The essence of VFM analysis lies in assessing whether the project, when procured through a P3 arrangement, achieves the most favorable balance between costs and benefits for the public sector, relative to traditional delivery methods like design-bid-build. In particular, the risk analysis examines and compares the risks associated with the P3 approach versus conventional delivery methods.

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