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The Port of Miami is planning a cruise facility upgrade that would enable two cruise ships of the size of Royal Caribbean's Oasis of the Seas [pictured] and Allure of the Seas to dock at the same time.

Kevin Lynskey, port director of business initiatives, is quoted as saying that the plan, which is still under wraps, "includes the construction of a multi-terminal - a single terminal that can accommodate more than one cruise vessel."

The facility upgrade alone would cost approximately US$250 million, port director Bill Johnson told the Greater Miami Chamber of Commerce earlier this month.

Work on any new terminal is not expected to start for at least four of five years, according to Lynskey. He also believes the Caribbean cruise market will continue to grow annually over the next 10 years and that the port will be able to continue expanding in line with industry growth over the next 15 to 20 years.

An important issue will be how the project is financed. The port currently has more than US$490 million of debt, on which it pays around US$32.5 million per year, and annual port revenues averaging US$110-115 million. The debt ratio — debt capital divided by total assets — is amongst the highest of ports nationwide.

In order to fund the expansion project, the port may therefore have to look beyond traditional debt used to fund previous projects. One option could be a public-private partnership.

Commenting on the issue, Lynskey said "[The] next time we explore the construction of the new cruise terminal, we are going to be open to a different arrangement," adding that he was keen for the project to be approved by the county commission by the autumn of this year, so that it could be included in the comprehensive development master plan schedule.

Deep Dredge Funding

Earlier this year, US$77 million was allocated to the Port of Miami to deepen the channel to minus 50 feet so that larger ships will be able to gain access to the port. Miami’s Deep Dredge project is timed to coincide with the opening of an expanded Panama Canal in 2014, which will allow a new generation of larger cargo vessels to pass through the Canal.

Once the port is dredged to a depth of 50 feet, larger 'New Panamax' ships will be able to load and unload cargo at Miami, enabling it to become a 'first port of call' for ships coming through the expanded Panama Canal in 2014.

“This is a solid first step toward enhancing Florida’s infrastructure and getting our state ready for a new generation of international trade with South America and beyond,” said Governor Scott in March.