Florida Terminates Negotiations for Port of Miami Tunnel
In its headline article Saturday, the Miami Herald announced Florida had withdrawn its support for the Port of Miami Tunnel PPP procurement. The state indicated concern about the financial markets’ impact on Babcock & Brown, the concessionaire’s 90% equity sponsor. Although the Australian investment bank’s shares had lost over 99% of their value in the past year, negotiations to identify a replacement sponsor were underway and were expected to be successful.
In February 2008, the Florida DOT had issued a notice of intent to award the 35-year concession to a consortium led by Bouygues and Babcock & Brown. This team had won the procurement by offering to accept a $33M annual availability payment for construction, operations, and maintenance of the four-lane bored tunnel. The concessionaire is contesting the state’s decision to terminate the project, as are the mayors of Miami city and Miami-Dade county.
Along with proposed improvements to Florida’s I-595 corridor, the Port of Miami Tunnel project was to be one of the first US PPPs to use the availability-payment structure. It was not yet determined whether the new tunnel, and the adjoining existing bridge, would be tolled to help the state meet its funding obligations.