In the early 2000s, day-to-day responsibility for overseeing the project was transferred from FDOT to Florida's Turnpike Enterprise (FTE), largely because of the assumption that the new tunnel would be tolled. In 2003 FTE began a reevaluation study to update project documents and examine construction methods for the tunnel. As FTE's work progressed, two important realities became clear. There was great opposition to tolling by the Port of Miami and the cruise ship operators, who believed that tolls would drive customers away. More importantly, tolling the tunnel but not the Port Boulevard Bridge would divert traffic away from the new tunnel and keep the streets of downtown Miami crowded with trucks bound for the port. For these reasons decision makers in Florida recognized that it would not be tenable to toll the new tunnel.
As it completed its work to gain environmental approvals for the project, FDOT held informal discussions with major U.S. and European contractors to elicit their opinions on the design and procurement of the tunnel. A dichotomy soon became apparent. American contractors were unanimous in their belief that the crossing had to be constructed as an immersed tube tunnel delivered under a design-build contract. However, four European firms involved in the discussions agreed that the tunnel could be built as a bored facility. Further conversations also revealed that the European contractors would only be interested in pursuing the project if it were procured as a P3 concession, as this would give them greater flexibility to innovate and refine the design. Furthermore, they also indicated that they would only be interested in bidding for a P3 concession if it included the long-term operation of the tunnel.
The P3 approach was also attractive to FDOT and its advisers. The risks involved with constructing the tunnel were great. A 40-foot-diameter tunnel had never been undertaken before in the United States. Procuring the tunnel on a design-build-finance-operate-maintain (DBFOM) partnership basis would allow the state to transfer the risks associated with constructing the large-diameter tunnel to the private sector. They also believed that there would be a greater level of competition with a P3 procurement compared to a more standard design-build arrangement. In 2004 FDOT completed a high level value-for-money and risk analysis and concluded that a P3 procurement would be viable. The department also recognized that if the private partner were compensated with availability payments tolls would not be necessary.
An additional rationale for developing the project on a P3 basis was to capitalize on Florida's recently created Strategic Intermodal System (SIS) program. Created in 2003, the SIS program was funded from documentary (doc) stamp collections which are levied on documents that transfer interest in Florida real property. The doc stamp is an important revenue source in Florida, where there is no income tax, and has been in place for several decades. Legislation passed in 2003 allocated over one third of doc stamp proceeds to Florida's Transportation Trust Fund, and then applied formulas allocating that amount to a variety of uses, including the SIS program.
The doc stamp allocation represented the first time non-transportation revenues were devoted to transportation needs in Florida and state officials began looking for a select number of "hallmark" investments that it could support. The governor and FDOT officials were eager to use SIS funding to fund the Port of Miami Tunnel. However, the SIS program also required that each dollar of SIS funding be matched at the local level on a 50-50 basis. This led to discussions among the state, Miami-Dade County (which owns the Port), and the City of Miami on how that local share could be provided, eventually securing funding commitments from all three parties.
The county identified $100 million in upfront funding broadly earmarked for "port access" within a 2004 local bond program. In addition, the county was able to leverage the State Comprehensive Enhanced Transportation System (SCETS) tax, which was collected on motor fuels since 1991 and had to be spent in the county in which it was collected. This strategy enabled Miami Dade County to direct an additional $114 million toward the Port of Miami Tunnel. The final components of the county's contribution would include a $40 million pledge from the Port of Miami upon substantial completion of the project and right-of-way contributions valued at approximately $50 million.