Loans again available for bridges project work

Clark County

Discussion

July 31, 2012

Loans again available for bridges project work

Major announcements on remaining obstacles expected soon

By BRADEN LAMMERS braden.lammers@newsandtribune.com The News and Tribune Tue Jul 31, 2012, 08:29 PM EDT

> SOUTHERN INDIANA — Billions of dollars in loan money is available for transportation projects around the country.

The U.S. Department of Transportation announced Friday that there will be $17 billion in loans through the Transportation Infrastructure Finance and Innovation Act — or TIFIA — for critical infrastructure projects across the country as a result of the recently enacted surface transportation bill, according to a press release.

Indiana and Kentucky will be among the states seeking a low interest loan through the TIFIA program for the Ohio River Bridges Project. The Louisville and Southern Indiana Bridges Authority has made multiple attempts to secure TIFIA financing, but in each case was passed over for other projects throughout the country.

However, for the latest round of the low-interest federal loans, the amount being offered has risen dramatically. The recently enacted surface transportation bill provided $1.7 billion in capital over two years for the TIFIA credit assistance program, up from $120 million in 2012, according to the release. To date, TIFIA has used $9.2 billion in funding to leverage more than $36.4 billion in private and other capital to help build 27 major transportation projects around the country.

With credit assistance, the $17 billion being offered in TIFIA loans can leverage between $20 billion and $30 billion in transportation infrastructure investment, totaling about $50 billion for transportation projects across the country.

Despite the massive increase in available funding, there are no assurances that the Ohio River Bridges Project will receive a loan as funding in the previous allotments has been highly competitive.

“In our estimation, the project lines up very well against the TIFIA statutory criteria,” said Indiana Finance Authority Director Kendra York in an email. “Moreover, we believe that recent events have converged to place the project in an unprecedented state of readiness to receive and take full advantage of TIFIA.”

Another change with the recent offering of TIFIA funding is that it will be offered on a rolling basis, York said.

According to U.S. Department of Transportation, the loans are available for “critical transportation projects” and it cites, because of the program’s flexibility, many qualified, large-scale projects can move forward quickly.

With the bridges project plan well on its way — a portion of the Indiana project is expected to break ground in late-August, while Kentucky is expected to break ground early next year — the $2.6 billion project, based on its state of readiness, would appear to be in a good position for funding.

But there are several factors for the loans that have yet to be determined.

York said the amount of the TIFIA loan that will be sought for the project has not been decided. And if a loan is secured there is uncertainty about what amount, if any, of the savings will be passed on to commuters.

“The receipt of a TIFIA loan could represent a significant enhancement to the financial plan for the bridges project by, among other things, leveraging private sector dollars and reducing borrowing costs,” York said. “We have long observed that any such enhancement — whether it be in the form of a TIFIA loan, a reduction in overall project costs or the ability to compress the construction timetable through innovation — can contribute to improving the project’s financial picture, and thus the ability to ensure that tolls will remain affordable.”

The Indiana Department of Transportation and the Indiana Financing Authority are also close to clearing two major hurdles ahead for the Ohio River Bridges Project. Progress on tolling approval from the Federal Highway Administration and a development agreement with Kentucky is expected to be announced within a week.