Friendly and open

Florida is one of the US states that is considered friendly and open to using public-private partnerships (PPP; P3) to upgrade its transportation infrastructure.

To date, the state has either delivered or is constructing several projects in the transportation sector as P3s.

One currently under way is the Port of Miami Tunnel, a $663 million project that has already been contracted as a 35-year concession. The project involves widening the MacArthur Causeway Bridge and constructing a tunnel to provide a direct highway connection to the Port of Miami on Dodge Island from Watson Island. It is expected to open next month.

The project drew attention last April, when President Barack Obama chose it as a backdrop to a speech he delivered just a few months into his second term, making the case for private investment in public infrastructure.

The ‘I-4 Ultimate’ is another big-ticket, high-profile project currently under way in the Sunshine State. Estimated to cost $2.1 billion, the project will add four tolled lanes along 21 miles of the Interstate 4 highway. It is under procurement and last June the Florida Department of Transportation (FDOT) announced a shortlist of four teams, as follows:

• ‘4wardPartners’ – led by Meridiam Infrastructure, Vinci Concessions and Walsh Investors;
• ‘I-4 Development Partners’ – teaming Macquarie Capital and Obrascon Huarte Lain;
• ‘Ultimate Mobility Partners’ – comprising InfraRed Capital Partners and Fluor Enterprises; and
• ‘I-4 Mobility Partners’ – teaming John Laing Investments with Skanska Infrastructure Development.

Proposals were to be submitted early this year with a winner expected to be announced this spring.

However, no other projects appear as currently in development or under procurement on FDOT’s website which was updated in February.

Missing from the list is the ‘FL54 Xpressway’, an unsolicited proposal that resulted in FDOT’s launch of a Request for Proposals (RFP) last August.

The FL54 Xpressway is a proposed design, build, finance, operate and maintain (DBFOM) concession of the Florida State Route 54 (SR54) and State Route 56 (SR56) corridor in Pasco County, north of Tampa.

It was conceived by Gerald Stanley, a bridge and road builder who has worked as a transportation consultant with FDOT, and formed the ‘International Infrastructure Partners’ (IPP) consortium specifically for this project.

Other members of the IPP consortium include financial services firm Guggenheim Partners and construction company PCL.

The rationale for the FL54 Xpressway, according to Stanley, is that “there is no east-west route in Pasco not in gridlock,” while population growth in the county is “enormous”.

The reason the project does not appear on the FDOT’s list is because despite the RFP and a deadline extension, the state agency did not receive any responses to its request.

Certain communities that would be affected by the project voiced concern about segments of the expressway that would be elevated, FDOT spokeswoman Kristin Carson explained.

IPP has been asked to modify its original proposal and is expected to do so in the near future after holding scheduled public meetings and reaching out to communities that may be affected by the $2 billion project.

But P3 activity is no longer reliant solely on the transportation sector thanks to a new law passed by the Florida legislature last July.

EXPANDING THE SCOPE

The Partnership for Public Facilities and Infrastructure Act significantly expands the type of projects that can be financed by private companies. They include any ferry or mass transit facility, parking facility, airport or seaport, health care facility, school, energy infrastructure, sporting facility, “or any other public facility or infrastructure that is used or will be used by the public at large or in support of an accepted public purpose or activity”.

In addition to expanding the scope of qualifying projects, the new law also allows for the submission of unsolicited proposals.

The state legislature tried passing a similar law in 2012 but was unsuccessful.

“While the concept is similar, this version has a lot less red tape,” Lee A. Weintraub, vice chair of construction law and litigation at Becker & Poliakoff, who helped draft bill CS/CS/HB 85 told Infrastructure Investor at the time.

He pointed out the protection the new law afforded lenders by giving precedence to any contractual appropriations over non-contractual appropriations.

While the law does not provide for a dedicated P3 authority, it does call for the creation of a seven-member task force charged with formulating recommendations to create a uniform process for project procurement on the local level.

The task force is expected to provide, among other things, criteria for awarding a P3 contract, timelines for selecting proposals and negotiating agreements, and procedures for financial review and analysis.

The seven-member team, which will be disbanded at the end of this year, has until July 1 to submit its recommendations to the Governor, the President of the Senate and the Speaker of the House of Representatives.

This new legislation paved the way for Miami-Dade County to issue a Request for Expressions of Interest (REOI) for a number of water and wastewater projects in southern Florida, including wastewater pump stations, the expansion of an existing wastewater treatment plant, a biosolids processing plant, new water treatment plants, and new maintenance facilities.

According to Jennifer Messemer, public information officer of Miami-Dade County, the local authority received 32 responses to the REOI that was issued last November. Miami-Dade officials are analysing the information and expect to take the next step in the next six months, Messemer told Infrastructure Investor.

This year saw the introduction of a new bill in the state’s House of Representatives.

House Bill 1051, filed in February by state Representative Ken Roberson, aims at protecting information that may be proprietary in unsolicited proposals. The bill, if enacted, would exempt unsolicited P3 proposals from public records requirements for a specified period of time in order to protect companies’ information, ideas or strategies.

The bill has been presented before several House committees and a companion version of the bill was introduced in the Senate in early April.

But, with the exception of this bill, activity in Florida’s P3 market seems to be at a standstill.

“There have been some P3s at the state university level,” Weintraub said.

One is the UniversityCity project led by Florida International University in partnership with, among others, the Miami-Dade Expressway Authority, Miami-Dade County, FDOT and IBM. The project includes a parking facility, bus rapid transit, and student housing, as well as other components.

MIXED USE

Miami-Dade College is also looking to develop a mixed-use project on its medical campus through a public-private partnership.

“Most of these aren’t pure P3s […] with performance based payments to the private sector out of availability payments,” Weintraub explained.

Instead, they are different amalgamations of partnering concepts between public and private entities to deliver public facilities he said.

“Florida is definitely still trying to figure things out and we have a long way to go,” Weintraub acknowledged. “But the desire is still there and things are moving, albeit at a slow pace and in a mostly non-traditional form.”

With the Partnership for Public Facilities and Infrastructure Act Guidelines Task Force due to turn in its recommendations on July 1 and a preferred bidder expected to be announced this spring for the I-4 Ultimate project, things might once again pick up in the Florida P3 market.

After all, Governor Rick Scott has said that he hopes to make Florida the biggest P3 state in the country. Projects may currently be few, but one thing clearly not lacking is ambition.