BRADENTON, Fla. - Miami-Dade County Mayor Carlos Alvarez is objecting to the Florida Department of Transportation's decision to reject further negotiations with the concessionaire originally selected to build the $1.2 billion Port of Miami Tunnel project.
Transportation Secretary Stephanie Kopelousos on April 1 recommended against reopening negotiations with the top concessionaire - Miami Access Tunnel, or MAT - and rejected negotiating with the second-ranked consortium, saying that too much time had elapsed since the proposals were submitted in early 2007.
More competitive proposals might be solicited in a new procurement process led by Miami-Dade County or the DOT, Kopelousos said.
"It is clear that all factors continue to point to there being only one plausible solution," Alvarez wrote in a letter last week to David Rivera, chairman of the state House Full Appropriations Council on Education and Economic Development. "We must re-establish and finalize negotiations with MAT."
Alvarez said solutions other than negotiating with MAT would be "critically flawed" because they would trigger legal action that could delay the project for years.
Kopelousos rejected finalizing a contract with MAT because her agency would have to evaluate a substitution for the major equity partner, Babcock & Brown Infrastructure Group US LLC, whose parent company has suffered financial problems. MAT wanted to replace Babcock with Meridiam Infrastructure.
But Alvarez said last week that vetting of Meridiam's finances was all but complete before the DOT suspended the project in December, and he said Meridiam is qualified to be MAT's main equity partner.
Alvarez also said that MAT was willing to reprice its proposed contract, which would "save the project millions of dollars" and eliminate the need for seeking new concessionaires.
Meridiam could not be reached for comment.
The DOT is working with Rivera, the House appropriations chairman, on the Miami tunnel project, agency spokesperson Pam Griffis said on Friday when asked for a response to Alvarez' letter.
The DOT said in December it would not close on the MAT contract because the "private partners have been overwhelmed by the effects of the financial market making delivery unworkable." Later the department said it would reevaluate its position and eventually agreed to seek new concession proposals.
The project calls for building two 3,900-foot tunnels about 100 feet below the water to create a bypass to the Port of Miami for freight trucks and cruise ship passengers. The only access to the port now is through downtown Miami, which causes extreme congestion in the city.
The DOT, which spearheaded the mega-project for more than 20 years, has spent $30 million on planning, permitting, and obtaining proposals from firms to finance, design, build, maintain, and operate the tunnels. The first-of-its-kind public-private partnership in the U.S. was to be based on availability payments where the concessionaire would be paid to build the tunnels, and paid annually to operate and maintain them.
Project costs were to come from the DOT, Miami-Dade County, and the city of Miami. In fact, the county last year sold $102.5 million of general obligation bonds to fund a portion of its $400 million contribution toward the project. Miami agreed to contribute $50 million and right of way.
The DOT planned to pay $457 million toward construction and another $800 million over 30 years to the concessionaire for operation and maintenance of the tunnels through annual budget appropriations. MAT initially was going to pay for a portion of the cost to build the tunnels through debt.
Like most governments and agencies across Florida, the DOT has been hit hard by slumping revenues, which was a factor in reconsidering the project.