BRADENTON, Fla. - The Mississippi Department of Transportation yesterday announced that due to the credit crisis, it has suspended the procurement process for the state's first toll road to be built as a public-private partnership.
MDOT had already delayed receipt of proposals from three short-listed consortiums several times at their request and the latest deadline for submitting proposals was next Tuesday.
The procurement is now temporarily on hold because one of the short-listed consortiums asked for another extension while two others had stopped working on their proposals several months ago, said Brenda Znachko, chief financial officer for MDOT.
"We received a letter again saying they were having trouble getting their financing package together," she said, declining to name the firm that sent the letter.
Znachko said some or all of the companies also experienced difficulty obtaining an investment-grade rating on the senior debt, which was required for the project to qualify for an $80 million loan from the U.S. Transportation Infrastructure Finance and Innovation Act program. The project also was approved for up to $200 million of private-activity bonds.
Although disappointed that Mississippi's project had not moved forward, MDOT executive director Larry "Butch" Brown said it is like many other greenfield toll road projects that also are "suffering from general economic weakness and tight credit markets, which limit the amount of credit and capital available for new transportation projects."
More than a year ago, MDOT began the process of seeking a concessionaire to design, build, finance, operate, and maintain for 50 years a new 12-mile toll road called the Airport Parkway to relieve congestion on local roads and create a direct connection between downtown Jackson and Jackson-Evers International Airport. The project was estimated to cost between $350 million and $500 million.
The Airport Parkway has been in the pipeline since the early 1990s and was farther along than some start-up toll roads because it had already received federal funds for engineering and the purchase of rights of way, according to Znachko.
"It was at a good stage to offer it to the private sector," she said. "But it is our first toll road and there is some risk involved." The collapse of the credit markets and the recession took their toll on the project, which required the developer to take all the revenue risk, the CFO added.
"We really wanted the project to pay for itself and not have a government contribution," she said. "That's tough in today's market."
MDOT now will put together alternatives in hopes of moving the project forward. Those alternatives could include restructuring the P3 and using grant anticipation revenue vehicle bonds, among others, Znachko said.
The alternatives will be presented to the three elected members of the Mississippi Transportation Commission to consider on Sept. 23 or Oct. 13.
The three groups expected to bid on the Airport Parkway concession were the Jackson Access Mobility Group, with main partners ACS Infrastructure Development Inc. and Dragados USA; the Airport Parkway P3 Group, composed of Cintra Concesiones de Infraestructuras de Transporte SA and Ferrovial-Agroman SA; and Global Via Infraestructuras SA.
In May, the Florida DOT announced no bids were received from firms interested in leasing an existing toll road known as Alligator Alley after the agency delayed taking bids at the request of prospective bidders.