BRADENTON, Fla. - Florida's largest public-private project may be back on after all.

State Department of Transportation Secretary Stephanie Kopelousos is taking another look at the $1.2 billion effort to have a concessionaire build tunnels under the water to the busy Port of Miami.

The long-planned project is designed to relieve congestion through downtown Miami, the only way to access the port, which is located on an adjacent island.

"What the secretary has said about the tunnel project is we'll take a step back, put everything on the table, and look at our options," DOT spokesman Dick Kane said in an e-mail late Wednesday afternoon. "She has also said the department will not move the money for the tunnel project out of the work program."

The agency in December abruptly halted the project and said it would not close on the public-private partnership with the consortium known as Miami Access Tunnel, or MAT, because difficulties in the financial markets "made delivery unworkable."

The announcement immediately drew backlash from Miami and Miami-Dade County, the DOT's funding partners in the project, as well as MAT's major partners - Babcock & Brown Infrastructure Group US LLC, the main equity partner, and French construction company Bouygues Travaux Publics SA.

In a letter to Gov. Charlie Crist, Babcock & Brown and Bouygues Travaux Publics called the DOT's decision "arbitrary" and said equity funding is in place despite financial difficulties being experienced by Babcock.

MAT pointed out that efforts were well under way to replace Babcock & Brown's 90% equity commitment with Meridiam Infrastructure, a private equity investment fund designed for investments in P3 infrastructure assets in Europe and North America.

Miami-Dade County Mayor Carlos Alvarez and Miami Mayor Manny Diaz also wrote to the governor and asked him to reconsider the DOT's decision.

Last weekend, Kopelousos and some state lawmakers toured the port with local government officials.

The project, spearheaded by the department, 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.

Miami-Dade agreed to fund $402.5 million of the tunnel project, while the city agreed to contribute $55 million in funding and right of way. DOT agreed to fund the remaining amount in annual budget appropriations.

Nearly a year ago, after a decade of planning and a search for qualified concessionaires, the DOT announced that MAT would design, build, finance, operate, and maintain the tunnel project through a concession contract that provides it with availability payments.

As part of its financing to build the tunnels, MAT obtained a private-activity bond allocation of up to $900 million from the U.S. Department of Transportation.

Last April, Miami-Dade County sold $102.5 million of general obligation bonds to fund a portion of its payment toward the P3. The funding was part of Miami-Dade's Building Better Communities program, a $3 billion GO authorization approved by local voters in a referendum in November 2004. The bond proceeds are being held in escrow.

The county's bond documents said that if proceeds are not used for the tunnel project, proceeds would be used for other infrastructure projects under the Building Better Communities program.

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.