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PortMiami seeks to modify Virgin Voyages terminal plan for cost savings

CRUISE Virgin PortMiami terminal.jpg
Miami-Dade County is talking with Virgin Voyages about modifications to its cruise terminal plan that would realize cost savings for the county without impacting the project's overall caliber
PortMiami hopes to negotiate modifications to Virgin Voyages' new cruise terminal in a bid to reduce capital expenditures during the COVID-19 pandemic.

The unspecified modifications would entail design, construction and delivery.

And adjustsments to capital recovery obligations

The Miami-Dade County Board of Commissioners is to consider a resolution at its virtual meeting today that also authorizes adjustments to the capital recovery obligations based on the savings realized on capital expenditures.

In September 2019, the board approved a preferential berthing rights agreement for Virgin that included the county's construction of Cruise Terminal V on 5.1 acres of land located at the port's northwest corner, facing downtown Miami.

The project includes a new bulkhead and apron; a new terminal complex; provision, staging, loading and intermodal areas with a substantial completion date of Oct. 15, 2021.

$175.5m design-build contract

Following a competitive bidding process, the county entered into a design-build contract with Suffolk Construction Co. for an amount not to exceed $175.5m.

In the context of the COVID pandemic, the county and its cruise partners have been working to identify potential reductions in capital expenditures. The resolution up for consideration would create a mechanism for amendments to the design, construction and delivery requirements in the agreement that would yield 'substantial savings' to the county.

Authority is requested because the agreement with Virgin requires the county to develop the project in a manner consistent with a design criteria package and delivery of the project by Oct. 15, 2021. In its current form, the agreement only authorizes reductions in scope from the design criteria package when cost overruns are incurred. An amendment would grant the county authority to make scope reductions that are mutually acceptable to the county and Virgin, which would generate savings to the county.

Talks with Virgin ongoing

The county and Virgin have been collaborating to identify specific elements of the project that can be modified to realize cost savings without impacting the project's overall caliber. The port has already begun cost-reduction negotiations with Suffolk and the resolution for consideration will complement those talks.

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