Paula Wallis, TunnelTalk

Existing port bridge

Bouygues will have an opportunity to build the technically demanding Miami Port Tunnel after all. The Florida Department of Transportation (FDOT) announced a financial close with the concessionaire lead by the French contractor yesterday, October 15. The project overcame a series of setbacks in the 19 months since the Miami Access Tunnel (MAT) group was awarded the 35-year PPP, including a last minute scramble by the City of Miami to deliver its funding commitment.

"FDOT is pleased to help deliver this landmark transportation project to the people of South Florida," said FDOT Secretary Stephanie Kopelousos. "It will result in a major enhancement to the quality of life in the region."

The total cost of design and construction of the tunnel is set at $607 million. The State has agreed to pay 50% of the capital cost and all of the operation and maintenance costs, while the remaining 50% of the capital costs will be provided by the local governments. The unique financial agreement transfers

Computer simulation of proposed tunnel

design-build-finance-operate-and-maintain (DBFOM) of the project to MAT. The group's financial plan combines private bank and federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loans with their own equity to finance the project's construction. Under the concession contract, FDOT will pay MAT milestone payments at various stages of project development. In addition, the department will provide availability payments to the concessionaire that begin at the completion of construction and will occur annually for 30 years.

The City of Miami almost scuttled the project when it failed to deliver a letter of credit for its $50 million share of the $1.3 billion project by the specified September 25, 2009 deadline. Funding commitments from both the City, and Miami-Dade County were tied to the TIFIA loans.

In the days leading up to, and following the deadline the State publicly accused the City of trying to back out of the financial deal and questioned the Mayor's commitment to the project.

Last minute wrangling concluded last Thursday (October 8) when Miami, finally made good on its commitment. The Department notified TIFIA that financing was in place and requested it move as quickly as possible to bring about a financial close. Kopelousos expressed her appreciation of the continued support for the project by both Mayors even in the face of some difficult challenges.

Miami Port Tunnel alignment

Troubles emerged almost as soon as MAT was awarded the project in February, 2008. Soon after, the concessionaire and the State were locked in protracted negotiations to adjust the group's construction estimate of $607 million upwards to be more in line with the owner's estimate of $1.3 billion and two competitive bids of $1 billion and $1.1 billion.

Then in December 2008, the group's equity partner, a victim of the economic meltdown, backed out causing the State to pull the plug on the entire project. MAT and local officials cried foul forcing FDOT to take another look at the project and in April of this year it resumed negotiations with MAT and its new equity partner, Meridiam Infrastructure.

With the signing of the financial details, focus now shifts to constructing the mile long, 42ft (1.6km x 12.8m) diameter twin-tube under-sea highway tunnel tubes. "I look forward to celebrating with our local partners as we launch this important project," said Kopelousos. "The new tunnel will improve access to the Port, free up congested downtown Miami streets and provide thousands of new jobs for Florida's families."

Construction is expected to begin May 2010, and be open to traffic by 2014

References

Miami Port Tunnel clings to life - TunnelTalk, Oct 2009
Miami Port Tunnel troubles continue - TunnelTalk, Sep 2009
Miami Port Tunnel on life support - TunnelTalk, Jan 2009
Miami still on hold - TunnelTalk, Aug 2008