Florida’s ‘Alligator Alley’ attracts no bidders(2)

A year-long attempt by the state to lease the 78-mile toll road to a private sector partner failed to attract any bidders. As early as two weeks ago, four teams of investors were known to be in contention for the right to lease, maintain, operate and received toll revenues from the road for 50 years.

The bid deadline for Florida’s “Alligator Alley” toll road lease came and went without any bids being submitted, effectively ending a year-long procurement effort to find a private sector partner for a 50-year lease of the 78-mile toll road connecting the state’s two coasts.

The Florida Department of Transportation (FDOT) said in a statement it did not receive any bids for the right to lease, maintain, operate and received toll revenues for the road.

“The state's primary objective in pursuing the lease was to maximise value to the state for reinvestment in transportation facilities while maintaining the Alley’s high safety standards, service levels and overall quality,” the statement continued.

A public hearing for 29 May in Naples, Florida, to analyse the bids was cancelled. No further details were provided.

The state did not return phone calls seeking comment.

It is the fourth major infrastructure deal in the US to fail to reach financial close in the last year. The other three include a Citi-backed consortium's $2.5 billion bid for Midway Airport, an Abertis-led bid for the Pennsylvania Turnpike for $12.8 billion and the Babcock-backed $1 billion Port of Miami Tunnel project.

Following a switch with another equity sponsor, Paris-based Meridiam Infrastructure Fund, Florida is again attempting to reach financial close on the Port of Miami Tunnel. It is unclear at this point whether the Alligator Alley project will face a similar rebirth.

The state's18 May deadline for Alligator Alley bids followed two previous postponements for bid submissions. They were originally going to be due 9 January, but in December 2008 the state postponed the deadline to 8 May because “global financial uncertainty adversely affected the ability to move forward with the process”. Bidders were given an extra ten days to finalise negotiations with their lenders, according to a statement.

Last year, the state received six responses to its request for qualifications to find a private sector partner for the road. And as early as two weeks ago, four groups of investors were still in the bidding for the road. They included:

–         Alligator Alley Partners, a 50-50 partnership between road concessionaires Atlantia and Global Via, who had originally led separate bidding camps but combined their efforts in April;
–         The Alligator Alley Development Partners, a 50-50 partnership between Spanish construction firm OHL and Carlyle Infrastructure Partners;
–          The Everglades Parkway Partners, a partnership between Spanish toll road developer Cintra and Goldman Sachs Infrastructure Partners I;
–          Vinci Concessions, a partnership between European transport concessionaire Vinci, Vinci road operator Cofiroute USA and Hubbard Construction Company.

A fifth group, A2 Transportation Partners consortium, informed FDOT on 29 April it would not be submitting a bid. A2 was a consortium of Portuguese toll road operator Brisa, CCR – a Brazilian road developer 18 percent owned by Brisa – and a JPMorgan infrastructure fund, JPMorgan IF Acquisitions.

A person in the consortium who did not wish to be identified told InfrastructureInvestor the group pulled its bid due to the high level of uncertainties surrounding the project.

The team, which included Citi as a financial advisor, had scored the highest of all the responders to the state’s RFQ in August 2008.