Payment Mechanisms

The payment mechanism for the Port of Miami Tunnel is split between milestone payments for the construction phase and ongoing availability payments during the operations phase, both paid by the Procuring Authority. The availability payments were set at USD $32.5 million a year, not including inflation adjustments or deductions.

During construction, external consultants were hired by the Procuring Authority under an owner's representative contract and a CEI contract. In addition to verifying compliance with the design, quality of works and overall progress (which was independently done by the CEI team with on-site presence), the owner's representative was responsible for certifying milestone payments to the Project Company.

Availability payments for the operations phase were set at a maximum annual payment. The payments are broken down into monthly unitary availability payments. Deductions attached to certain KPIs are enforced through a performance-points calculation, which are also linked to the events of default and termination.

The availability payment largely consists of the operations and maintenance (O&M) fee, fixed for 30 years with inflation adjustments. The objective is to ensure the asset's condition would meet the required specification throughout the duration of the contract and at handback. The parties agreed to share the risk of changes in O&M insurance costs, as these were seen to be dictated by global trends outside the control of either party. Savings made or additional expenses incurred on these premiums by the Project Company arranging the insurance cover are shared with the Procuring Authority.