TIFIA oversubscribed again

The US Department of Transportation received 34 requests for $14bn of the low-cost loans, about 12% more than the $12.5bn sought last year. Several big PPP projects are requesting loans this year, according to letters of interest published by the department.

Thirty-four infrastructure projects are seeking $14 billion in low-cost loans from the US Department of Transportation in this year’s round of TIFIA funding, an increase of about 12 percent from the $12.5 billion sought last year.

That’s according to letters of interest published by the office that administers the loans under the Transportation Infrastructure Finance and Innovation Act, which created the TIFIA programme in 1998.

The letters come from a mix of cities, developers, public authorities and state departments of transportation seeking an average TIFIA loan of $412 million. They include several big public-private partnerships (PPPs): the $1.4 billion Northwest Corridor portion of Georgia’s West by Northwest PPP, which asked for $375 million; Virginia’s $2.2 billion Route 460 PPP, which asked for $650 million; and Indiana’s and Kentucky’s self-described $4 billion bridge replacement “mega-project” in Louisville, which, at $1.3 billion, made the third-largest TIFIA loan request.

The Kentucky and Georgia PPPs are both among repeat loan requestors, having participated unsuccessfully in last year’s round of TIFIA funding. At the same time last year, the TIFIA office received 39 letters of interests for TIFIA loans requesting $12.5 billion, according to the TIFIA website. Eventually, four projects got the go-ahead to apply for loans, including three PPPs – California’s Presidio Parkway, Denver’s Eagle Commuter Rail Project and the Port Authority of New York and New Jersey’s Goethals bridge replacement project.

A similarly small group of projects is likely to get the go-ahead to apply this year, as demand for the low-cost loans – a 35-year TIFIA loan costs 4.46 percent, according to today’s published interest rate – greatly exceeds their supply. Under a 2005 transportation bill, Congress funded the TIFIA programme at an annual level of $122 million. Assuming the same funding is extended for 2011, that’s enough funding to make about $1 billion worth of loans annually, according to a Department of Transportation spokesperson. 

The letters of interest will next be evaluated by the TIFIA office prior to an invitation for a formal loan application being extended to the selected projects, according to the spokesperson.