The Florida Department of Transportation (FDOT) has confirmed that Global Via Infrastructure submitted a bid for a 50-year lease of the 78-mile Alligator Alley highway last month. FDOT also said the bid came too late in the process to be accepted.
Global Via Infrastructure (GVI), the 50-50 joint venture of Caja Madrid and Spanish construction group FCC, has previously said in a statement that it did not bid for the project. GVI declined to comment beyond that statement.
Dick Kane, communications director for FDOT, said the bid came after the deadline of 4pm on 18 May and, as such, could not be considered. “It was not timely, it was not responsive and that’s why we did not accept it,” Kane said.
FDOT’s instructions to proposers, dated 26 August, 2008, said late proposals would not be accepted.
FDOT had previously said the project did not attract any bids.
Global Via, in response to previous inquiries from Infrastructure Investor as to whether it had submitted a bid, sent a statement with reasons for not doing so. “Financial proposals were required to be valid for a 150-day period, which is a long period considering the current financial environment and therefore made financing very expensive,” Global Via said in the statement.
Global Via also said the minimum price it believed was expected by FDOT for a 50-year lease of the highway was “difficult to reach” considering the firm’s financial constraints and its target return for the project.
In background materials distributed to the six shortlisted bidders for the project, FDOT cited a base case net present value between $750 million to $976 million for all the toll revenues from the highway over a 50-year lease period.
Other discounted gross revenue forecasts, based on a 6 percent interest rate over 50 years and higher traffic growth, went as high as $1.9 billion.
Price expectations were not the only factor cited by interested parties as to why they withdrew from the process. In background conversations on the topic, some cited uncertainty over the transaction process. Others said the process was too crowded for an asset with little scope for operational improvement. That essentially turned the bidding into a contest to see who had the lowest cost of capital for the asset – a hard contest to win in the current credit environment.