FL/I-595 toll lanes concession does $1.6b+ financial close
By Peter Samuel
Despite the forbidding financial climate some big projects seem to be going to financial close, though others are delayed. Florida's 595 Express successfully closed March 3, with simultaneous signings of nearly $800m of bank loans and $200m in equity in New York City, some $700m of TIFIA loans in Washington DC, and contract document signings at District 4 FDOT offices in Ft Lauderdale. There has not been an official announcement as we write, although apparently it is reported in Project Finance.
Spain-based ACS through subsidiares Iridium and Dragados are now committed as the design, build, finance, operate, toll team for the reconstruction of I-595 for 17km (10.5 miles) from just west of Ft Lauderdale airport near I-95 westward through the Turnpike Turnpike to the I-75/Sawgrass Expressway (FL869) interchange near the edge of east coast development and the beginning of the Everglades.
The project goes from the I-75/Sawgrass Expressway interchange to the I-595/I-95 interchange in central Broward County a total project length of approximately 17km (10.5 miles.) The work consists of the reconstruction, addition of auxiliary lanes and resurfacing of the I-595 mainline including associated improvements to adjacent cross-roads, frontage roads and ramps, and a new reversible express lanes system in the I-595 median.
13 travel lanes, 19 including auxiliaries, 29 including shoulder lanes too
Over much of the project there are 2x3 frontage road lanes part of FL84, 2x5 general purpose lanes and auxiliary lanes and 3 reversible toll express lanes for a total section of 19 lanes of which 13 are true through or travel lanes and 6 are auxiliary lanes between adjacent interchanges for accommodating entering and departing vehicles. In addition there are about five pairs of shoulder lanes, so in places there are 29 lanes total.
Major components are:
- tolled reversible express lanes to be known as 595Express, serving express traffic to & from I-75/Sawgrass Expressway from& to east of FL7, with a direct connection to the median of Florida's Turnpike
- geometric improvements to the I-595/Florida's Turnpike interchange
- widening and reconstruction of the Florida's Turnpike mainline for 4.3km (2.7 miles) from Griffin Road to Peters Road to accommodate the express lanes direct connection
- addition of auxiliary lanes on the eastbound and westbound I-595 and parallel SR84 roadways
- continuous connection of the FL84 frontage road between Davie Road and FL7
- grade separated "braided" or basket-weave entrance and exit ramps to prevent weaving problems
- combined ramps and cross-road bypasses
- construction of the New River "Greenway," a component of the Broward County linear park
- 13 sound barriers providing noise abatement for adjacent communities
- bus rapid transit (BRT) within the corridor.
Improvements east of FL7 past the Ft Lauderdale airport front boundary will be completed as part of a future project.
FDOT takes traffic & revenue risk - availability concession
The concessionaire as 'landlord' will be compensated by Florida DOT as 'tenant' renting the lanes and paying the concessionaire according to the lane availability. Florida DOT in turn will collect tolls from its 'tenant' in sublet central lanes. The state DOT therefore takes the traffic and revenue risk and has to find the difference between the revenue from toll payers and its availability payments or contracted 'rent.'
35 year concession
The only problem with this metaphor is that ACS only acts as landlord charging 'rent' to FDOT for 35 years, after which time the facility becomes the property of FDOT. Maybe it's a lease-to-purchase?
A US first
This is the first availability payments road concession contract in the US we know of, although the European countries, especially Britain, Portugal and Spain have a number in operation.
Lawyers for the state of Florida were Nossaman.
Financial advisers for the state were Jeffrey Parker & Associates and Macquarie for ACS.
The project went from notice of procurement to financial close in about 13 months.