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Obama focuses on US infrastructure

Obama focuses on US infrastructure
President Obama’s efforts to revitalise America’s infrastructure brought him into the maritime realm with a visit to the Port of Miami, a top cruise port that is set to bolster its cargo business. Slightly more than 7m tons of cargo moved through the port in 2011 as a hub for distribution around the Caribbean, close to 60% of this cargo is exports.

President Obama spent several hours reviewing progress on a new tunnel that will directly link the cargo area to the Interstate highway network.  The tunnel, which will enable trucks laden with containers to bypass the highly congested downtown streets, is one leg of a three pronged strategy that port planners in Miami hope will catapult the port into the top echelons of US cargo ports.

The port is also building a linkage to the Florida East Coast Railway, which, in turn, provides a feed to the broader U.S. rail system, and will be dredging a channel through Biscayne Bay down to 50 ft. After necessary environmental approvals were obtained, last summer, the port is in the final phases of contracting for the dredging to accommodate larger vessels. At a time of constrained Federal budgets, funding remains a contentious political issue- the port has indicated an intention to raise finance in the bond markets.

Miami provides a noteworthy example of cooperation between the business sector and government, an important tool in the Obama Administration’s infrastructure toolkit. Port Director Bill Johnson told Seatrade Global: “PortMiami is way ahead of the curve. As President Obama noted in his remarks, following his tour of the Port Tunnel construction site, our tunnel project is an example of what can be accomplished through public-private partnerships.”

In advance of the trip, the White House press office said: “This is a good opportunity for the President to illustrate the value, both in the short term and the long term, of the important infrastructure investments that the President has talked about for quite some time."

The tunnel project brings together, in a PPP, Miami Access Tunnel Concessionnaire LLC (MAT, owned by European private sector firms Meridiam Infrastructure Finance  and Bouygues Travaux Publics),  and three governmental entities- Florida’s Department of Transportation, Miami-Dade County and the City of Miami.

The Miami visit came at a time that port commissioners in the Commonwealth of Virginia, operators of cargo facilities around the Norfolk area, have made a decision to reject a pair of proposals that would have “privatised” cargo handling operations of the Virginia Port Authority’s Virginia International Terminals. Proposals worth in excess of $3bn, over a 50-year term, had been submitted by APM Terminals, and by an investment consortium spearheaded by JP Morgan Chase in conjunction with two terminal operators.

Four years ago, the VPA turned down a bid, which it says was undervalued. This time, commentators pointed to a combination of political and business reasons for the decision; ultimately, the unknown “prize” some years down the road could be vast- if Norfolk wins the “Panama sweepstakes” and gains considerable business from a widened Canal.