Advocates of public-private partnerships to help finance transportation projects are hailing the new Moving Ahead for Progress in the 21st Century Act, or MAP-21, and hustling to take advantage of a key part of the statute: a more than five-fold hike in a Dept. of Transportation loan program.
As states await word from DOT on preliminary requests for 2013 aid under its Transportation Infrastructure Finance and Innovation Act (TIFIA) program, they and other P3 supporters know MAP-21 funding, including TIFIA's share, expires on Sept. 30, 2014. They already are talking about trying to increase, or at least hold, the newly achieved gains when Congress works on MAP-21's successor.
The expanded TIFIA was a key focus at the American Road & Transportation Builders Association's 24th annual P3 conference, which drew about 200 attendees to Washington, D.C., on Oct. 10-12. Geoffrey Yarema, a partner at law firm Nossaman LLP, said the 14-year-old TIFIA "has become an essential building block for public-private partnerships in the United States."
MAP-21's changes make TIFIA even more attractive, particularly its funding (ENR 8/27). The law boosts federal TIFIA credit subsidies to $690 million in fiscal 2013 and to $920 million in 2014 from $122 million in 2012. Each subsidy dollar supports $10 in loan volume. The 2013 loans could total about $7 billion.
Less than three months after DOT issued its notice of 2013 TIFIA funding availability, demand has outrun supply. Chris Bertram, DOT chief financial officer, told attendees the department already has gotten 19 letters of interest from state and local agencies seeking a total of $27 billion in loans—more than triple what DOT has available to lend.
Bertram says DOT aims to streamline its reviews. He says it already has contacted about two-thirds of the agencies that filed TIFIA letters "and told them that we are moving them to the next step, which is gathering more financial information." The stage beyond that would involve hiring a financial adviser and delving into the projects in more detail. Bertram says he expects "a couple of projects" to move forward this fall.
Robert Poole, transportation policy director at the Reason Foundation, said that as P3 advocates look to the next highway-transit bill, their agenda should include expanding TIFIA and adding provisions to widen the use of tolls on existing interstate highways.
Peter Ruane, ARTBA president and CEO, says it is important to have TIFIA-aided projects under way, with "dirt flying" in the next couple of years. He says that visible project activity would give TIFIA more credibility and momentum as TIFIA fans make their case for increased funds.
TIFIA can provide only up to 49% of a project's costs, but a federal loan commitment can help draw private financing. D.J. Gribbin, a managing director with Macquarie Capital, told attendees the number of infrastructure funds has risen to 143, from 47 in 2007, with more investor attention returning to North America. "There is no lack of money," he says. "All we need to do is to … structure these projects and make some adjustments to allow the private sector to invest in infrastructure."About 20 states do not have legislation on their books to enable P3 projects to be launched, which is an obstacle.