The Transportation Infrastructure Finance and Innovation Act – or TIFIA – has played a key role in delivering public-private partnerships in the US, according to a report released this week by Kroll Bond Rating Agency.
The programme provides low-cost federal loans for surface transportation projects throughout the US, covering up to 49 percent of project costs. The programme’s flexible repayment terms, KBRA said, “incentivises private sector interest in projects that would either not be viable, or significantly more expensive in the traditional market”.
KBRA pointed to five TIFIA loans rated by the agency, including the Moynihan Train Hall at New York’s Penn Station, upgrades to the Chicago Transportation Authority and two roads in California. The projects were “able to be completed because of the favourable financing terms provided by TIFIA”, the report said.
Launched in 1998 under the Department of Transportation, the TIFIA programme produces $40 in total infrastructure investment for every $1 of TIFIA funds, according to a letter to Congress sent last year by then-transportation secretary Anthony Foxx. Funding for TIFIA is already set to rise from $275 million this year to $300 million in 2019. And President Donald Trump has proposed further expanding the programme, with a budget blueprint released in May proposing a $1 billion yearly spend.
KBRA’s report noted that infrastructure funding in the US has historically relied on the municipal bond market, but said insufficient revenue streams have forced policymakers to look towards “innovative” funding alternatives.