State officials submitted a new letter of interest to the U.S. Department of Transportation (USDOT)Â seeking up to $2.9 billion in federal credit assistance for the construction of a new Tappan Zee Bridge.
In the letter, the New York State Thruway Authority also provided new information concerning how the bridge would be financed, with project capital costs ranging from $4.6 billion to $5.4 billion based on the three bids received in July.
The Thruway Authority”™s formal request to apply for funding under the Transportation Infrastructure Finance and Innovation Act (TIFIA) was delivered Sept. 5, just over two weeks after Gov. Andrew Cuomo addressed a letter to Secretary of Transportation Ray LaHood requesting his “fullest consideration” for “all available federal support.”
All three bids received by the state priced the project at $5.2 billion or less. The Thruway Authority will select a bid by Oct. 12.
The letter of interest states the TIFIA-eligible project costs will range from $5 billion to $5.9 billion, which would make the project eligible for a maximum TIFIA loan of $2.4 billion to $2.9 billion.
To pay for the remainder of the project, the Thruway Authority will issue bonds backed by toll revenues over the course of construction for a maximum of 40 years. The letter notes that in 2011, the current bridge generated $127 million in toll revenues.
Because the state may not hear back regarding its TIFIA request by the start of construction, the Thruway Authority wrote that it is prepared to issue Bond Anticipation Notes for initial funding requirements.
If approved, any TIFIA funds will be secured by a system-wide general revenue bond pledge of Thruway Authority revenues, the letter states, adding that the Thruway Authority board of directors has “the statutory authority, and has covenanted with its bond holders, to raise tolls as necessary to meet its financial obligations.”
Under TIFIA, public and private entities are eligible to apply for federal aid in the form of direct loans, loan guarantees and standby lines of credit to finance surface transportation projects of national and regional significance, with project lead agencies first required to submit a letter of interest, after which they may be invited by USDOT to submit a formal application.
After previously submitting a letter of interest seeking $2 billion in TIFIA aid in December 2011 for the fiscal year 2012 round of funding, the Thruway Authority was not invited to apply due to the limited availability of TIFIA funds at the time.
However, the available funding under TIFIA was expanded significantly as part of a surface transportation bill passed by Congress in June, with the percentage of project costs eligible for assistance increasing to 49 percent from 33 percent.
