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FAQs -- Financial

UPDATED 06/02/2009

How will the project be built?

The project will be developed as a public/private partnership (PPP) under a Concession Agreement.

How much will the project cost?

Based on the bid submitted by the Miami Access Tunnel Team, the design/construction cost for the project will be $610 million.

What is a PPP?

A PPP is a contractual agreement between a public agency, in this case the Florida Department of Transportation, and a private sector proposer or bidder.

What is a Concession Agreement?

It will be the contract entered into by FDOT and the winning private sector proposer selected in a competitive bidding process.

Is there a term for the successful bidder?

The successful bidder is known as the concessionaire.  

Why is a PPP the best approach for this project?

The Port of Miami Tunnel is a highly complex project.  The PPP structure will transfer substantial risk for construction overruns and the long-term cost of operations and maintenance to the concessionaire.  The concessionaire will be paid for performance by FDOT over the life of the PPP rather than upfront.  If the concessionaire underperforms, FDOT will be able to reduce payment.  This will align the interests of FDOT and of the concessionaire in being efficient and providing high-quality construction, upkeep and user service.

How will the concessionaire recoup that investment?

FDOT will make what are known as availability payments to the concessionaire for providing vehicle access through the Port of Miami Tunnel. These payments will begin once the tunnel opens for use and will continue at regular intervals throughout the duration (30 to 50 years) of the Concession Agreement.  If the concessionaire underperforms it will not receive a full availability payment.

Is the winning proposer, or concessionaire, one company or a group of companies?

The concessionaire will most likely be a company formed by one or more equity investors for the sole purpose of entering into this Concession Agreement with the FDOT. The concessionaire will bring in key subcontractors, such as the project designer, builder and operator, who may or may not be equity investors in the concessionaire. FDOT will evaluate the equity investing members of the team and the key subcontractors during the RFQ process.

What are the other sources of revenue?  

In addition to the private funds put forth by the concessionaire to build the tunnel, FDOT has reserved $150 million in its work program and the citizens of Miami-Dade County have voted to use $100 million from their November 2, 2004 general obligation bond program. Additional local and state contributions will be identified at a later date.

How long will the concession last?  

The term will be between 35 and 50 years, including both the construction period and the operating period, which will commence when the tunnel opens for service.  

What are some other U.S. transportation projects been funded and built through PPP?

U.S. transportation projects funded though PPP include the JFK Airtrain in New York City, Hudson-Bergen Light Rail in New Jersey and the Las Vegas Monorail.  This will be the first transportation project in Miami funded this way.