BRADENTON, Fla. — The $1.2 billion Port of Miami Tunnel project will undergo another procurement process, Florida’s Department of Transportation chief said late Wednesday.
With the economy taking a toll on a member of a consortium selected to build the project, as well as on state transportation revenue, the DOT in December said it would not close on the state’s largest public-private partnership concession.
After backlash from local officials and some state lawmakers, Transportation Secretary Stephanie Kopelousos said she would reconsider.
In a letter to local and state officials Wednesday, Kopelousos said she is “well aware of the importance of this project to the community, to the port, and to the region.”
The project involves boring two 3,900-foot tunnels about 100 feet below the water to create a bypass for freight trucks and buses carrying cruise ship passengers to the Port of Miami. The only way that traffic can get to the port now is through downtown Miami.
In reconsidering the project, however, Kopelousos rejected suggestions that the DOT reopen discussions with the top concessionaire Miami Access Tunnel, or MAT, and she rejected negotiating with the second-ranked consortium, saying that too much time had elapsed since the proposals were submitted. More competitive proposals might be solicited in a new procurement process, she said.
To proceed, Kopelousos said the first option would be to allow Miami-Dade County to conduct a new procurement procedure. The second option was for the DOT to conduct a new procurement “on a revised schedule, based on a funding scenario acceptable to the parties.”
“In order to proceed with the development of this project, the department will be calling together representatives from the city, county, as well as our district and central office staff to lay out the procurement schedule, overall funding strategies (since the timeline and revenues associated have changed), and make a presentation back to the parties no later than July 1, 2009,” Kopelousos wrote. “That time schedule will also allow the parties to make the necessary adjustments to their overall budgets in response to recent revenue forecasts.”
The idea that the project was not dead elicited praise from officials in Miami and Miami-Dade County who would share in the cost of the project, albeit a minor portion compared to the state DOT’s contribution. Miami agreed to pay $55 million, plus grant rights of way, while the county agreed to contribute $402.5 million, some financed through bonds. The consortium was allocated nearly $1 billion of private-activity bonds to help finance the project.
The DOT planned to pay for most of the project with annual availability payments from its budget. However, it’s not clear if the same funds are still available from the state. One of the issues that stalled the tunnel project in the first place was a significant decline in Florida’s transportation revenues because of the recession.
“I am pleased that this important project is alive and will move forward,” said Miami Mayor Manny Diaz.
“The tunnel will not only improve access to the seaport and alleviate traffic congestion in downtown Miami, but it will keep us globally competitive,” said Miami-Dade County Mayor Carlos Alvarez, adding that he hoped to aggressively pursue options that would move the project forward.
After years of studying the best way to alleviate traffic problems in downtown Miami, the DOT spearheaded the tunnel project and ultimately solicited firms to design, build, finance, operate, and maintain the tunnel project through a concession contract. The planned use of availability payments in a P3 was — at the time — the first of its kind in the U.S., although it has been used in other countries.
In May 2007, the DOT announced that the 35-year concession would go to MAT, whose main equity partner was the parent company of Babcock & Brown Infrastructure Group US LLC., which suffered financial problems before the contract was signed. The DOT was unwilling to allow the consortium to submit a replacement for Babcock & Brown.
The Port of Miami Tunnel project was recognized as the P3 Project of the Year by the American Road & Transportation Builders Association in November 2007.
