Port of Miami Tunnel Open for Traffic

On August 3, 2014, the Florida Department of Transportation (FDOT) and the Port of Miami achieved an important milestone when the est. $1 billion Port of Miami Tunnel opened for traffic.  The project consists of twin tunnels under Biscayne Bay linking Port facilities on Dodge Island with a widened MacArthur Causeway and I-395.  One of the first public-private partnerships in the United States to use an availability payment contracting structure, the tunnel improves access for freight trucks and cruise passengers, reducing traffic congestion in downtown Miami and improving air quality.

Under the concession agreement, FDOT made milestone payments to the concessionaire during the construction period, upon the achievement of contractual milestones.  With the operating period now underway, FDOT will make availability payments to the concessionaire, contingent upon lane availability and service quality. The project was awarded to a Concessionaire headed by Meridiam (approx. 90% equity) and Bouygues Construction (approximately 10% equity) and reached financial close in October, 2009, at the height of the recession following the collapse of Lehman Brothers.  

In March, President Obama toured the construction site for the new tunnel while promoting a new initiative intended to encourage more projects like the Port of Miami Tunnel.  The president emphasized the important role of partnerships between public and private sectors as a part of the solution to the critical need to rebuild and upgrade the nation’s roads, bridges and ports. 

Financed with the combination of bank loans and a TIFIA loan, the project has received numerous awards, including The Bond Buyer’s 2010 “Nontraditional Financing Deal of the Year,” “Global Deal of the Year” and “P3 Deal of the Year” from Project Finance Magazine in 2009, Project Finance International’s 2009 “North American P3 Deal of the Year” and the 2007 “Project of the Year” by the American Road and Transportation Builders Association.
 

Amtrak and Maryland DOT Plan for Improvements to the Vital Baltimore and Potomac Tunnel Moves to the Public Input Stage

The 141-year-old Baltimore and Potomac (B&P) Tunnel is a major bottleneck on the Northeast Corridor, but Amtrak, the Maryland Department of Transportation (MDOT) and Federal Railroad Administration (FRA) are conducting a study to examine alternatives to improve or replace the tunnel. 

The two-track B&P Tunnel is used by Amtrak, Maryland's MARC Commuter Rail trains and Norfolk Southern freight trains. The track geometry of the outdated tunnel creates a low-speed bottleneck impacting approximately 85 Amtrak trains, 57 MARC commuter trains and one to two freight trains each day.

When the project began last Fall, Maryland Gov. Martin O’Malley said “We're taking the first step toward upgrading rail traffic through this Civil War era tunnel, which will improve passenger rail service along the entire East Coast.”

“The B&P tunnel is a crucial link on the Northeast Corridor making Amtrak and MARC service possible through the city of Baltimore,” said Amtrak President and CEO Joseph Boardman. “As owners and stewards of this vital piece of infrastructure, we know that a new or rehabilitated tunnel is what we need to maintain and ultimately improve reliability, speed and safety for all trains — Amtrak, MARC and others — that use it.”

The $60 million federally funded study will include range of rehabilitation alternatives and options for a new tunnel on new alignment.  The study is moving into a new phase with expanded public outreach and opportunities for stakeholders to learn more about the project's purpose and need and comment on alternatives.
 

Amtrak CEO Boardman Warns Hudson Rail Tunnels Have 20 Years Max Of Remaining Service

Amtrak CEO Joe Boardman is warning that one or both of the Hudson River rail tunnels will need to be shut down within the next 20 years.  Boardman also noted that it would take seven to nine years to build and deliver new rail tunnels and that Amtrak’s plan for new tunnels is still unfunded. CEO Boardman made these remarks at the Regional Plan Association’s conference on April 25th in New York City.  

Readers will recall that Access to the Region’s Core (ARC) was a passenger rail infrastructure project that would have significantly expand transportation access between Midtown Manhattan and New Jersey. The centerpiece of ARC was a new two-track rail tunnel under the Hudson River from New Jersey to New York Penn Station. ARC would have added much needed capacity for the 160,000 passengers who travel through the existing tunnels each weekday and allowed for temporary closure of the existing tunnels for major rehabilitation projects. NJ Transit, New York Metropolitan Transit Authority (MTA) and the Port Authority of New York and New Jersey were the primary proponents of ARC.  In October of 2010, New Jersey Governor Chris Christie decided to terminate ARC, citing a concern that New Jersey was bearing too much of the project risk.

After the demise of ARC, Amtrak and elected officials moved quickly to develop a new plan for Hudson River rail tunnels called the Gateway Project .  Amtrak’s plan calls for completion of construction by 2030, but CEO Boardman acknowledged that the consensus view of a panel at the Regional Plan Association conference was that the new tunnel would take “25 years if you’re lucky.”  The present lack of funding means the new tunnel could take until 2040 or later. 

Complicating matters, repairs to the existing tunnels to repair damage caused by Super Storm Sandy flooding will cost at least a half a billion dollars and will require temporary closures.  Presently, the two tunnels handle 24 trains per hour, but closure of one tunnel for major rehabilitation would cut capacity by more than half because a single tunnel would need to handle trains in both directions.

Prospects for funding for a new tunnel are unclear to put it charitably.  Amtrak is receiving $45 million in federal funding over three years for planning and preconstruction work, but a construction funding solution is one of the many open questions for House and Senate Transportation appropriators.

Virginia DOT Reaches Financial Close on Midtown Tunnel Project

The Virginia Department of Transportation and Elizabeth River Crossings Opco LLC (“ERC”) reached financial close on a toll concession public-private partnership ("PPP") for the $2.1 billion Midtown Tunnel Project.  It is the first United States transportation PPP to reach financial close in 2012 and will include construction of a new Midtown Tunnel, rehabilitating the existing Midtown and Downtown Tunnels, extending Martin Luther King Boulevard and will provide much needed transportation improvements and congestion relief to motorists in the Hampton Roads region.  Construction will begin in Fall 2012 and completion is expected in 2018.

Under the Public-Private Transportation Act, the Virginia DOT will continue ownership of the Project elements and oversee ERC's activities.  ERC will finance, build, operate and maintain the facilities for a 58-year concession period and also assumes risk of delivering the project on a performance-based, fixed-price, fixed-date contract, protecting users and taxpayers from construction cost overruns and delays. 

The Project will involve tolling of the existing and newly-constructed assets with tolls initially ranging from $1.59 to $1.84 per car for the tunnels and $.50 for the MLK Extension for tunnel users and $1 for non-tunnel users.  This is approximately 40 percent lower than the $2.89 toll rate estimated under the interim agreement signed in January 2010 before Governor Bob McDonnell took office.  Additional financing includes a $422 million TIFIA loan, $663.75 million of private activity bonds and $310 million in public contribution from Virginia DOT.  ERC, a joint venture of Macquarie and Skanska, will contribute up to $272 million in equity.

The Midtown Tunnel Project was a priority of the region’s leaders and is the largest transportation project to get under way in almost 30 years.  More than 500 jobs will support the construction efforts and another 1,000 jobs in other sectors of the local economy.  The Project is anticipated to cut round-trip travel time by 30 minutes a day and improve safety, reliability and connectivity to the region’s transportation network.

Click here to learn more about this Project.

VDOT's Midtown Tunnel Project Targets Financial Close By Year's End

During a July 20, 2011 presentation before the Commonwealth Transportation Board, the Virginia Department of Transportation reported that VDOT reached agreement on major business terms with Elizabeth River Crossings LLC for the design, construction, financing, operations and maintenance of the Midtown Tunnel Project in the Portsmouth and Norfolk area.  As a result of this major milestone, VDOT is targeting to reach financial close on the Midtown Tunnel Project by the end of 2011.  

The Midtown Tunnel Project will involve the construction of a new two-lane tunnel under the Elizabeth River, extension of the Martin Luther King Freeway, and certain improvements to the existing Midtown Tunnel and Downtown Tunnels.  The capital costs of the Midtown Tunnel Project is approximately $1.45 billion.  Construction is scheduled to start in 2012 and to be completed in 2017.