The economy has its ups and downs and level periods as well. The problem is anticipating which will be in effect when a project is ready to start. As interest rates fluctuate, making decisions on lending for major projects can hold back banks and create a funding shortfall. In many cases, especially since the signing of the Bipartisan Infrastructure Law in November, government loans can save the day.
The U.S. DOT (Dept. of Transportation’s) Build America Bureau has provided direct TIFIA (Transportation Infrastructure Finance and Innovation Act) loans for many years. The Bureau was established as a “one-stop-shop” during the Obama Administration to help states and other sponsors carry out infrastructure projects. The Bureau offers credit programs, technical assistance, and best practices in project planning, financing, delivery, and operation. To date, the Bureau has provided more than $36.2 billion in financing through the TIFIA credit program, supporting more than $123.2 billion in infrastructure investment across the country.
The Bipartisan Infrastructure Law expands project eligibility for the Bureau’s TIFIA credit program and extends maturity of the loans, giving borrowers additional flexibility. Under the old program, a TIFIA loan of $388.6 million was made to the CBBT (Chesapeake Bay Bridge Tunnel) District for the construction of the Parallel Thimble Shoal Tunnel of the CBBT crossing. Now, that loan is being replaced by a similar amount to provide a portion of the financing for a 5,700-ft. tunnel connecting two southbound trestles of the existing CBBT, a 17.6-mile structure linking the Norfolk/Virginia Beach areas to Virginia’s Eastern Shore.
The CBBT first opened to traffic in 1964. It currently includes more than 12 miles of low-level trestle in each direction, two one-mile tunnels each running beneath a shipping channel, two bridges, almost two miles of causeway, four manmade islands, and over five miles of approach roads, totaling 23 miles. Because of its proximity to the shore, peak travel season occurs during the summer months (May 15 to September 15) with a significant portion of this traffic occurring on weekends.
By refinancing the original loan to take advantage of lower interest rates, the new funding will help the community save millions of dollars, address the economic harm caused by the pandemic, and keep important public works projects moving forward. The new loan would generate savings of approximately $57 million over the life of the loan which will help to mitigate the reduction in toll revenues that occurred as result of the pandemic and reinstate a capital expenditure program and routine rehabilitation projects that were postponed in response to the downturn in revenues.
The Project addresses numerous DOT policy priorities such as improving safety and supporting economic growth and will provide essential redundancy for Navy access to its bases in Norfolk and at Naval Air Station Oceana in the event that one of the Thimble Shoal tunnels is damaged or impassable. The CBBT carries US 13, the main north-south highway on Virginia’s Eastern Shore, and provides the only direct link between Virginia’s Eastern Shore and south Hampton Roads, Virginia.
Meanwhile, on the other side of the country, the Bureau provided a package of TIFIA loans totaling up to $3.84 billion for the Central Puget Sound Regional Transit Authority (Sound Transit) in Seattle for the financing of the Downtown Redmond Link Extension and refinancing of an additional five projects. The total savings to Sound Transit is estimated to be more than $630 million over the life of the loans, while helping move projects forward that will create and sustains tens of thousands of jobs.
Sound Transit is a public transit agency serving the central Puget Sound metropolitan area in Washington state and operates the Link light rail system in Seattle and Tacoma, the Sounder commuter rail, and the Sound Transit Express bus service. Sound Transit is the first transit system to achieve carbon-free operations utilizing hydroelectricity and wind.
The TIFIA loans will replace the current loan for the Sound Transit Northgate Link Light Rail Extension, which is scheduled to open this fall. This project is a 4.3-mile light rail extension, including three new stations, from the University of Washington north to Northgate. The TIFIA loans also include refinancing for the East Link, Lynnwood Link and Federal Way Link extensions of light rail as well as the Operations and Management Facility East projects.
Want to tweet about this article? Use hashtags #construction #IoT #sustainability #AI #5G #cloud #edge #futureofwork #infrastructure