Streams

No Federal Loan for Tappan Zee Bridge -- At Least Right Now

Thursday, April 26, 2012 - 11:53 AM

UPDATED WITH LETTER FROM FEDERAL GOVERNMENT New York State had been hoping that a third of the cost of the Tappan Zee Bridge replacement would be funded through a low-interest loan. But the federal government has taken a pass -- at least for this round.

State officials are maintaining that today's announcement is "very good news."  Speaking at an Albany press conference, director of operations Howard Glaser said the bridge would still be considered in later rounds of funding.

"They advised us the Tappan Zee bridge would be one of the six large scale projects that will be considered in the second round," Glaser said. But Glaser acknowledged financing couldn't come until after congress passes a surface transportation re authorization bill, which many experts predict won't happen until after the November elections.  And a letter supplied to Transportation Nation (at the end of the post) didn't mention a short list of six projects.

In February, the state sent the U.S. Department of Transportation a letter of interest, requesting a $2 billion TIFIA (for Transportation Infrastructure Finance and Innovation Act) loan for the massive bridge construction project.

The state had said that the total cost of the project would be about $5.2 billion, although a budget hasn't been finalized.

The TIFIA website says that the agency received "26 Letters of Interest (LOIs) seeking more than $13 billion in credit assistance to finance approximately $36 billion in infrastructure investment across the country." It continues: "While limited TIFIA resources mean that not all of the LOIs can be selected, five projects are being invited to apply for credit assistance."

But state officials -- who have yet to release a financing plan for the project -- say the Tappan Zee bridge isn't out of it. "In this first round they only did $100 million total for the whole country," Glaser said. " Remember our application for the Tappan Zee alone is in excess of $2 billion.  So those large sclae  high profile projets will be a further round based  on federally available funding. They can't fund these large programs right now."

Glaser said the Tappan Zee bridge funding would have to wait until Congress reauthorizes the transportation bill.

TIFIA loans are used for large-scale infrastructure projects that cost $50 million or more. Loans can't exceed 33% of project costs.

The letter to the state from the federal government didn't make any mention of a short list of six projects. Here's the letter:

John M. Bryan
Chief Financial Officer & Treasurer
Interim Chief Information Officer

Thank you for submitting a Letter of Interest (LOI) in response to the FY 2012 TIFIA Notice of Funding Availability.  In response to the December 30, 2011 deadline, the Department received 26 LOIs seeking over $13 billion in credit assistance to finance an estimated $36 billion in infrastructure investment.  The requested level of TIFIA financing is more than 10 times the level than can be supported given current program resources.

Each LOI has been evaluated against the TIFIA statutory criteria, and the Tappan Zee Bridge project performed well in our review.  Unfortunately, the Department does not have sufficient budgetary resources to invite an application for your project at this time.  In light of those constraints, the Department prioritized projects that could be accommodated within resource levels and required financing in the nearest time frame.  However, if TIFIA budgetary resources are significantly increased as proposed in the President's Budget and the House and Senate reauthorization proposals, we will create an expedited review process for those funds.  We encourage you to continue the planning and financial work necessary to move your project if and when that review process takes place.  Please note that even with an augmented program, the level of TIFIA credit assistance may still be constrained, which could impact the amount available for the Tappan Zee Bridge project.

If you have any questions, please do not hesitate to contact me.

Duane

Duane Callender
Director
TIFIA Credit Program  (HITJ)
US Department of Transportation

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