Florida DOT Reaches Agreement on Business Terms for Port of Miami P3

BRADENTON, Fla. - The Florida Department of Transportation yesterday said it had reached agreement on the business terms of a concession contract with the consortium Miami Access Tunnel to design, build, finance, operate, and maintain the $1.2 billion Port of Miami Tunnel project.

The project now has reached commercial close but it must meet yet another critical and final deadline and reach financial close by Oct. 1. A commercial close is the initial step leading to a financial close and means the parties have agreed to the terms for MAT to pursue final financing of the project.

The state's largest public-private partnership was nearly derailed last fall when 90% equity partner Babcock & Brown Infrastructure Group US LLC had to back out because of financial problems.

Initially, Transportation Secretary Stephanie Kopelousos was against allowing Babcock & Brown to be replaced. After political intervention by local and state elected officials over several months, Kopelousos established deadlines in order for the project to move forward. In the process, the DOT on May 8 approved Meridiam Infrastructure Finance S.a.r.l. as the new 90% equity partner.

MAT will have five years to finance and build two 3,900-foot tunnels 100 feet below the water to create a bypass to the Port of Miami to divert freight trucks and cruise ship passengers away from downtown Miami, which presently is the only way to get to the port. MAT will have another 30 years to operate and maintain the tunnels. It is not clear yet if they will be tolled.

MAT had at one time proposed using some bonding as part of its plan to finance the project. But with a new equity partner in place details about the financing plan have not been released.

The DOT, Miami-Dade County, and the city of Miami plan to use various forms of financing, including bonds, to pay back MAT over the life of the concession contract.

Kopelousos said the state continues to support the use of P3s to move transportation projects forward.

"We now hope we can continue to work together to make this [tunnel] project a reality," she said in a statement.

Miami-Dade County Mayor Carlos Alvarez said he looked forward to reaching financing close in October.

"The Port Tunnel is a project of local, regional and statewide significance," Alvarez said in a statement. "It will keep our seaport, Miami-Dade County's second most important economic engine, competitive and our community at the forefront of international trade."

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