Tram Recommend Mem

MEMORANDUM

Roosevelt Island Operating Corporation of the State of New York 591 Main Street Roosevelt Island, NY 10044 (212) 832-4540 www.rioc.com David A. Paterson Governor Stephen H. Shane President Chief Executive Officer Kenneth A. Leitner Vice President General Counsel Fernando Martinez Vice President Operations Steven Chironis Vice President Chief Financial Officer Rosina Abramson Vice President Planning and InterGovernmental Affairs Board of Directors Deborah VanAmerongen Chairperson Laura L. Anglin Fay Fryer Christian Katherine Teets Grimm Jonathan Kalkin David Kraut Charlee Miller Michael Shinozaki H. Patrick Stewart

To: From: Re: Date:

RIOC Board of Directors Stephen H. Shane RFP Selection: Tram Modernization Project October 21, 2008

The two (2) bids described in my memorandum to the Board of October 10, 2008 were received and analyzed by the evaluation teams of Parametrix, LiRo, Professor Testa and RIOC personnel, assisted by outside counsel from Holland & Knight. They were received from POMAgalski S.A. (“POMA”) and Doppelmayr CTEC, Inc. (“Doppelmayr”). Key RFP Requirements: In summary, both bids were responsive to the design specification, with the goal of modernizing the Tram to convey in a dual haul system the population with peak capacities, at speeds and under conditions as set out in the RFP, requiring the delivery of a system which would function from the Island side of the existing Tram across the river to Manhattan terminating at the 2 nd Avenue Station, utilizing the existing towers, within their design tolerances as strengthened to meet engineering requirements, within the grandfathered variance and channel of the existing Tram operation, all to code and specification, as required by the New York State Department of Labor and all other applicable City, State and Federal agencies having or asserting jurisdiction,. The RFP also required a bid on a five (5) year maintenance contract post completion. Analysis of Bids: Both responders are well qualified, well financed, highly reputable companies whose ability to design, engineer, manufacture, construct and deliver the systems proposed is highly acceptable. The Doppelmayr bid proposal for the development was approximately $10 million more than the POMA proposal. Both parties excluded the potential strengthening work to be performed on the towers in their responses. RIOC, together with its consultants met with both responders to fully understand their proposals and to discuss their exclusions. Both parties bid approximately the same amount for the maintenance contract, both expecting to use the same personnel as presently employed at the tram under the existing union contract. Both responders made clear their lack of enthusiasm for the air conditioning alternate as being expensive both in dollars and in diminution of passenger capacity by reason of the weight of the required batteries and the problematic nature of such a system. RIOC made the decision to eliminate air conditioning, but to have a high volume air circulation system. Both responders, upon negotiation and discussion, accepted the risk of the required tower modifications, including both required strengthening and the unknown of New York City’s requirements with respect to cranes, hoists, rigging, traffic control, etc.

When confronted with the large bid price differential, Doppelmayr asked for and received the opportunity to modify their proposal to utilize much of the existing structures and equipment, and returned a price still about $2 million higher than POMA. Finally, Doppelmayr reduced its price by the $2 million in an effort to be competitive, as well as reducing its bid for the operations and maintenance contract by almost $1 million over the five (5) year life of the agreement. POMA declined to bid on a system designed and constructed by others. Recommendation: On the advice of our consultants whose opinions are attached for the record, we have collectively concluded that the POMA bid is better for RIOC and recommend that the officers of the Corporation be authorized to execute contracts with POMA for the design, construction and delivery of the overhauled tram and the operation and maintenance thereof for five (5) years after delivery of the completed system on the terms and conditions outlined below. As will be seen from the budget summary, there should be a significant sum available for terminal improvements and contingency. Summary of the POMA Proposal: The POMA proposal provides for the replacement of the entire existing tramway system with two new parallel single reversible tramways on the existing tower structures and within the existing terminals. The system will provide independent operation of the two systems so that at any time one system could be used without regard to the other. The systems are not required to be synchronized in any fashion, although operationally RIOC may choose to synchronize them. This independence increases operational and maintenance flexibility. The systems would each consist of entirely new equipment designed, furnished and installed with an “Integrated Rescue Concept” that provides for return of the cabins to the stations in the event of failure. There would be no separate rescue system provided. Instead, the systems are provided with a great deal of redundancy. Each of the two systems is supplied with two primary motors, an emergency motor and an evacuation motor. The power supplies to the motors are similarly redundant. As a rescue method of absolute last resort, the cabins will be furnished with equipment appropriate for a vertical evacuation as in the present tram. As proposed, the system uses fixed track ropes to eliminate the need for roller chains and their associated maintenance. POMA has agreed that if the fixed track ropes cannot be agreed upon through design reviews because of the extent of tower modifications, it can provide the system using live counterweights at similar cost. The final developed design will be carefully evaluated by Thornton Tomasetti. The proposed cabins are approximately the same physical size and floor area as the current system although capacity is reduced from the current 125 passengers to a projected 110 to reflect what is generally achieved with the existing system and to meet new standards for the weight of passengers and after elimination of the air conditioning system. The cabin hangers proposed are of a novel design using wider positioning of the track ropes than on the current system, allowing for faster terminal approaches and will keep the cabins generally horizontal during windy operations. This particular spacing of track ropes has not been proven, but is expected to present only minor design changes from proven designs. POMA has agreed to provide the system, test it and address any concerns. As requested, the proposal includes the modern mode of platform edge doors to protect passengers from the open space below and moving cabins. These doors will be synchronized to automatically operate with the docked cabins. The system will operate

within the NY State Department of Labor and City code clearances as established for the present tram, for which a continuing waiver has been granted. The baseline proposal for POMA is to provide the system at $14,615,421 with a service outage of 5.5 months beginning June, 2009, based on an extra of $332,168 for accelerated delivery. Tramway service would be reinstituted mid November, 2009 for one cabin and both cabins two weeks later. POMA has taken on the risk of the unknown at an upset price of $2 million for all costs and expenses for tower modifications and City and State requirements in connection therewith, on a cost plus basis with savings sharing below $2 million. Elimination of air conditioning (and the battery and charging system required) reduces the price by $253,695. The renowned architect Renzo Piano of Italy will be commissioned by POMA to design station modifications which will have to be reviewed and ultimately accepted in the context of a design development process and then costed and contracted. Mr. Piano’s bio from Google and Wikipedia is attached. Project Budget: POMA Bid: Add: Expedited delivery $ 332,168 Tower Modification (*upset) 2,000,000 Less: A/C Deduct Total POMA Contract

$14,615,421 2,332,168 (253,695) $16,693,894

Engineering & Supervision: Parametrix $2,150,000* LiRo 2,364,000 Prof. Testa 75,000 $4,589,000 Unknown: Electrical connection/transformer * 500,000 Total known Project Cost Available for Station Improvements and Contingency

5,089,000 $21,782,894 3,217,106

Total Project Budget:

$25,000,000

*It is to be noted that the Thornton Tomasetti add on of $600,000 to the Parametrix contract may be reduced by $200,000. The shared savings in the $2,000,000 Tower modification provision may be substantial. The cost of power supply from Con Edison on the Manhattan side and transformer suitability remains to be finalized. These items create additional funds for contingency in the Project budget. The recommendations of Parametrix and LiRo are attached. I recommend the resolution approving the POMA proposal to the Board.