Delays In Setting Final Contract Could Push Port Of Miami Tunnel Opening Back A Year To 2013
Written by Risa Polansky on October 23, 2008
By Risa Polansky
Delays in setting a final contract for a $1 billion-plus tunnel to the Port of Miami could push back the project’s once-expected opening, said Gus Pego, District 6 secretary for the Florida Department of Transportation, which is heading up the project.
A "2012 [completion] would be probably unrealistic. 2013 would be more realistic," he said in an interview last week.
Miami-Dade County and City of Miami commissioners have already given final approval to the tunnel, designed to relieve downtown traffic by connecting the port with Watson Island, allowing trucks direct access to the MacArthur Causeway and I-395.
The tunnel is a major element of the governments’ multi-billion-dollar mega plan of public works projects that includes a Marlins stadium and a revamp of Bicentennial Park.
The department of transportation in February selected a consortium dubbed Miami Access Tunnel — a team of international companies — to build, operate and maintain the tunnel.
Since then, the department and the group have worked to iron out an official contract, but turbulent financial markets and fluctuating materials costs have stood in the way for months.
Now, "we’re going through a lot of the contract language to make sure it’s clear," Mr. Pego said. "It’s not material adjustments; a lot of it is just clarity."
Though the deal is nearly complete, "it would be premature" to reveal the terms, as they’re still being finalized, he said.
But regardless of outside factors, the tunnel is to cost taxpayers $457 million in state dollars, $402 million from the county and $88 million from the city, as planned.
Should costs run over, it would be up to the concessionaire to cover them, as the agreed-upon financing structure sets maximum annual payments.
"The ceiling’s set, so they have to deliver the project within that price," Mr. Pego said.
The parties are pursuing a Transportation Infrastructure Finance and Innovation Act loan at lower interest rates than bonding future government payments would require.
The act provides federal credit assistance to nationally or regionally significant surface transportation projects.
The county’s Industrial Development Authority is to issue up to $980 million in industrial development transportation revenue bonds for the project.
It would be the Miami Access Tunnel team’s responsibility to pay them, leaving the authority and county liability free.
Miami-Dade commissioners OK’d the plan in July.
Delays in setting a final project contract have caught the attention of at least one county commissioner.
Alice Bravo, district director of transportation systems development for the department of transportation, updated the county’s Transit Committee last week, assuring commissioners that "we’re actually much closer today than we were in the past."
She said also that "despite the turbulence in the financial markets, they’re (the project concessionaire) looking favorably upon their ability to finance the structure."
Transit Committee Chair Dorrin Rolle pressed for specifics.
"We get that report each month: "we’re much closer than before’," he said. "Where are we with this thing? You’re going to have to define the word "closer.’"
Ms. Bravo said that, "in principal, we have managed to agree to the basic parameters that we’re going to work within. A lot of the issues now have to do with external market forces… we don’t want to commit to a certain date and have that be a particularly turbulent week in the market. We want to make sure that we lock in at the best available time."
Mr. Pego said the same.
"It’s up to the financial markets now to hopefully deliver the project."
Conditions may stabilize over time, he said, and the cost of materials may trend downward due to turmoil in the global economy.
"It may work out to our benefit" to wait, he said. "But you can’t wait forever."
He said he expects a signed contract by year’s end, January at the latest.