Showing concern for the TIFIA JPO’s slow pace of credit approvals for major US transportation, on July 24, 2013, the Senate Committee on Environment and Public Works conducted an oversight hearing on the implementation of the TIFIA Program following MAP 21’s expansion of the program almost a year ago. We are aware of only one project that has received credit approval in that time frame.
Geoff Yarema, a partner in the Infrastructure Practice Group and a member of the National Surface Transportation Infrastructure Financing Commission, provided testimony today at the hearing.
In his testimony, Geoff pointed to the importance of the TIFIA program in supporting large scale infrastructure projects by allowing applicants to leverage fewer federal dollars to maximize local, state and private funds. The passage of MAP-21, he said has greatly enhanced the availability of TIFIA loans from approximately $122 million a year to $750 million in FY 2013 and $1 billion in FY 2014. States and regional governments have been increasingly looking to the TIFIA program as a key component of their transportation funding and financing plans.
However, Geoff noted that the U.S. Department of Transportation (USDOT) faces certain challenges that need to be resolved to accelerate TIFIA’s approval process: (a) streamlining the pre-application process, (b) enhancing bidding competition with earlier TIFIA commitments to public sponsors, (c) accelerating financial closing, (d) preserving TIFIA’s value proposition to maintain flexible loan terms, (e) enhancing transparency, (f) processing higher quality credits more quickly and efficiently, and (g) implementing the authorization of loans up to 49% of eligible project costs, as approved by MAP-21.
James Bass, CFO of the Texas Department of Transportation, D.J. Gribbin of Macquarie Capital, Arthur Leahy, CEO of Los Angeles County Metropolitan Transportation Authority and James Roberts, President and CEO of Granite Construction Incorporated also provided their testimony to the committee.
Update: Geoff Yarema provided supplemental testimony to the Committee in response to follow-up questions posed by Senators Boxer and Vitter.
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