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Bouygues gets second chance on Port link Apr 2009
Miami State officials have resumed negotiations with the concessionaire lead by French contractor Bouygues on the Port of Miami Tunnel project after calling the project dead four months ago.
Pressured by local officials, the State agreed to give Bouygues a second chance to avoid a lengthy re-procurement process that could take up to 12 months. Bouygues was selected to build the estimated $1.3 billion twin tunnel project nearly two years ago but failed to reach a contract with the state. The state will re-bid the project if a contract is not signed by June 1, 2009.
Miami Port Tunnel on life support Jan 2009
Paula Wallis, Reporter
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Backers of the Port of Miami Tunnel are scrambling to resuscitate the billion-dollar project pronounced dead last month by the Florida Department of Transportation (FDOT).
Besieged by the consortium and Miami area lawmakers FDOT is reconsidering its decision to abandon the project after the chosen consortium's equity partner, Babcock & Brown failed to raise the necessary capitol to close the deal.
The Sydney based investment bank teamed with French construction giant, Bouygues Publics Trauvaux on the Miami port project with Babcock putting up 90% of the equity.
The investment banker has extensive and diverse assets in 22 countries, mostly in the United States, followed by Australia and Germany. However, its market capitalization has plunged more than 99% in the past year from about $8 billion to $60 million due to the global economic meltdown and is now on the verge of bankruptcy.
In its December 12, 2008 news release, Gus Pego, the department's District Six Secretary said. "Although everyone has worked hard to bring this project to fruition, we must face the reality that our private partners have been overwhelmed by the effects of the financial market making delivery unworkable."
But the Miami Access Tunnel consortium lead by Bouygue is challenging the state's reason for abandoning the project.
Paul Boucher, project manager for the tunnel team says the announcement came as a shock."We thought we were very close to a deal."
Boucher says they were already in discussions with FDOT to replace Backcock and Brown with Meridiam Infrastructure, a private equity fund headed by the second-largest bank in France and a global engineering fund. Boucher said FDOT officials had assure them in writing early in December that the swap would not prevent the tunnel project from moving forward and days later it was suddenly all over.
While FDOT's Pego did not immediately respond to requests for comment he has been quoted as saying. "They changed the captain of the ship," and that adding such a change "would create great discomfort in the process" for the state.
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Computer simulation of proposed tunnel


Miami/Dade County Mayor Carlos Alvarez says he and the mayor of Miami were also stunned by the state's abrupt decision." Every indication was that this project was moving forward," said Alvarez, a solid supporter of the tunnel. He said FDOT offices gave two reasons for killing the project." They said the financial backer had fallen on hard times and that they couldn't get a bottom line cost for the project. But the private consortium constructing and financing the project, disputes these allegations, and we need answers."
In August 2008, TunnelTalk reported that the teams were locked in intense negotiations to adjust the selected best value proposal to current economic conditions.
The group's construction estimate of $600 million came in at less than half the cost of the owner's estimate of $1.3 billion and well below two competitive bids of $1 billion and $1.1 billion.
The roughly one mile 42ft diameter twin-tube highway tunnel, crossing under the main shipping canal, would have been the largest "soft-bore" tunnel in the country.
The Port of Miami is the largest cruise ship destination in the world and the largest container port in Florida. Backers say improving access to the port by diverting most of the 18-wheel truck traffic away from Miami's downtown streets and onto Interstate 395 and the MacArthur Causeway, then into the tunnel under the main shipping canal to the Port is key to the redevelopment of the Miami waterfront and vital to the regions economic future.
Mayor Alvarez said at a time when cities are hurting and unemployment raising it is irresponsible of the state to kill a project that would create as many as 1000 local jobs.
Under growing pressure Florida Governor Charlie Crist has assured local leaders that the tunnel project will get a second look and State Transportation Secretary Stephanie Kopelousos confirmed that the state's share of the tunnel funds -- $452 million for construction and $850 million for long-term operations and maintenance would remain tied to the project. "They asked us to take a step back and take another look at it, and we're going to do that," Kopelousos said.
But Kopelousos is not optimistic that the project can be saved. Speaking to a local newspaper she said. "The reality of it is: In the current financial market, we don't believe we're going to be able to bring this thing to fruition."
With the situation changing daily it could cost the state dearly to pull out of the project. Miami and Miami/Dade County are hinting that the state should reimburse them money already sent on the project and the consortium that has ploughed tens of thousands of dollars into the project is also reviewing its options.
References
Miami Port Tunnel finally a project! - 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

        

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