Infra Insight Blog : written by Nossaman LLP Infrastructure attorneys, covers infrastructure project delivery, including Public-Private Partnerships, Operations & Management Agreements, policy, and news.

The U.S. Department of Transportation (USDOT) announced a much-anticipated fourth round of funding for USDOT’s popular TIGER Discretionary Grants program, totalling $500 million for capital investments in surface transportation infrastructure.

Pre-applications must be submitted by Feb. 20, 2012 and final applications must be submitted by March 19, 2012.  Previous rounds of competitive TIGER grants were heavily over-subscribed.  The last round attracted 848 applications with funding requests for $14.29 billion, while USDOT awarded funds in December 2011 for 46 capital projects totaling $511 million.

USDOT did not make many substantive changes in this week's notice to the TIGER application and selection process as compared to previous TIGER funding rounds.  Authorizing legislation for this round allows for an amount not to exceed $175 million of the $500 million total to be used to pay the subsidy and administrative costs for a project receiving credit assistance under the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA) program.  Applicants for these TIGER TIFIA payments must submit a TIGER application and a separate TIFIA letter of interest.

USDOT will also specifically make up to $100 million in TIGER funds available to high speed and intercity passenger rail projects, which have fallen out of favor in Congress but remain an Obama Administration priority.

More detailed information can be found in USDOT’s Notice of Funding Availability published in the Jan. 31, 2012 Federal Register.

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This morning, U.S. Department of Transportation (USDOT) Secretary Ray LaHood announced the winners of the extremely competitive TIGER III grant application cycle.  Forty-six projects in 33 states will share $511 million in grant funds.  The announcement was made several months earlier than the originally scheduled date.

As has been the case with the previous two rounds of TIGER grants, this cycle was wildly oversubscribed.  According to the announcement, USDOT received 848 project applications from all 50 states, Puerto Rico, and Washington, DC, requesting a total of $14.29 billion, far exceeding the amount available under the TIGER III program. 

“The overwhelming demand for these grants clearly shows that communities across the country can’t afford to wait any longer for Congress to put Americans to work building the transportation projects that are critical to our economic future,” said Secretary LaHood. “That’s why we’ve taken action to get these grants out the door quickly, and that is why we will continue to ask Congress to make the targeted investments we need to create jobs, repair our nation’s transportation systems, better serve the traveling public and our nation’s businesses, factories and farms, and make sure our economy continues to grow."

Of the grants awarded, only three included payments to support TIFIA loans.  The projects that will receive TIFIA payments are the SR-91 Corridor Improvement Project managed lanes being developed by the Riverside County Transportation Commission; Virginia DOT’s I-95 HOT Lanes; and Dallas Area Rapid Transit’s Orange Line Extension.

TIGER grants are awarded to transportation projects that have significant national or regional impact.  USDOT allocated the TIGER III funds to transportation projects in both urban and rural areas.  The funding was distributed between a broad array of road and bridge, transit, port and freight rail projects.  The three rounds of TIGER grants have resulted in an award of over $2.6 billion for critical transportation funding.

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U.S. Department of Transportation Secretary Ray LaHood plans to name Karen J. Hedlund as Deputy Administrator at the Federal Railroad Administration (FRA).  Hedlund moves to the Deputy Administrator position from her current role as Chief Counsel at FRA, replacing Karen Rae, who Gov. Cuomo recently appointed as New York State Deputy Transportation Secretary.  Before moving to FRA, Hedlund served as Federal Highway Administration Chief Counsel from June 2009-June 2010, where she helped implement the American Recovery and Reinvestment Act, including new investments in highway, intermodal and freight rail facilities.
 
Prior to joining DOT, Hedlund was a partner in the Washington, DC, office of Nossaman. She has 35 years of experience in transportation and is recognized nationally for her expertise in structuring public-private partnerships. All of us at Nossaman offer congratulations to our former partner on this new appointment.

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As discussed in a previous blog post, the U.S. Department of Transportation (USDOT) recently set new level-entry boarding requirements for disabled passengers on intercity and commuter railroads through amended regulations implementing the Americans with Disabilities Act (76 Fed. Reg. 57924).

In the proposed rule, USDOT stated its intent to require passenger railroads to provide level-entry boarding at all new or altered station platforms, unless the passenger railroad could show that level boarding was infeasible.  In the final rule, USDOT retained the level-boarding mandate, but will permit alternatives at platforms adjacent to track used by freight railroads if the passenger railroad can demonstrate reliability, safety and access to all cars available to non-disabled passengers.

Due to concerns about equipment clearance issues, freight railroads generally refuse to permit passenger railroads to construct station platforms more than 8 inches above top-of-rail.  USDOT’s ADA regulations give it authority over owners or persons in control of a station (e.g., passenger railroads), but not owners or persons in control of track that passes through the station (e.g., freight railroads). Due to this limitation, USDOT concluded that it “does not currently have legal tools to overcome this refusal” (76 Fed. Reg. at 57927).

This is an unusually candid assessment on the part of USDOT, especially in the context of the ADA.  What remains unclear is what passenger railroads will need to demonstrate in order to meet this performance based standard for an alternative to level boarding and what will happen if the standard cannot be met at a particular location.

Stay tuned.

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In a recent move that will have wide-ranging impact on the rail industry, the U.S. Department of Transportation (USDOT) set new level-entry boarding requirements for the access of passengers with disabilities to passenger railroads, applicable to new and altered station platforms where construction or alteration begins on or after March 2, 2012.  Through a final rule promulgated on September 19, 2011, USDOT amended its Americans with Disabilities Act regulations to require intercity and commuter passenger railroads to provide that disabled passengers can access any passenger cars accessible to non-disabled passengers (76 Fed. Reg. 57924)  This rule does not require railroads to retrofit existing station platforms.

In stations not shared with freight railroads, passenger railroads must provide level-entry boarding to all passenger cars.

In stations where freight railroads run on track adjacent to passenger platforms, passenger railroads may choose among non-level boarding alternatives – including car-borne lifts, station-based lifts or mini-high platforms – to meet a prescribed performance standard.  In order to use a non-level boarding alternative, a passenger railroad must submit a detailed plan to the Federal Railroad Administration (FRA) and the Federal Transit Administration (FTA) demonstrating that the selected alternative meets USDOT’s accessibility performance standard efficiently and safely, and in a manner that integrates disabled and non-disabled passengers.  The plan must provide details on deployment, maintenance and operation of the non-level boarding alternative, and FRA and FTA have discretion to modify or disapprove the plan.  If proposing an approach other than car-borne lifts, USDOT also requires railroads to submit a cost/benefit analysis of car-borne lifts versus that other technique.

Compliance with these new level-entry boarding requirements will involve significant cost to passenger railroads.  First, covered railroads must alter design plans for any station platform construction that will begin on or after March 2, 2012.  Passenger railroads that alter or construct station platforms accessing track shared with freight railroads will also incur expensive ongoing work-arounds to the level-entry boarding requirement.

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USDOT’s TIFIA Office is hiring a new lead negotiator/financial policy advisor and a financial analyst.  Both positions are based in Washington, DC, and applications are due September 21st. 

The ideal candidate for the lead negotiator position will be a senior finance expert who has negotiated transportation finance and/or infrastructure project finance credit agreements as practiced in domestic and international capital markets.

For the financial analysts role, the ideal candidate is a mid-level professional with experience in the financial operations and practices of corporate business organizations, U.S. capital markets and transportation finance.  

Questions about either position should be directed to TRANSJOBS@dot.gov.

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Monday, U.S. Transportation Secretary Ray LaHood announced an additional $2 billion in High-Speed Intercity Passenger Rail Program funding, bringing the total awards for the program to $10.1 billion.  USDOT distributed the $2 billion to 22 projects in 15 states, but three big winners together received over $1.8 billion or about 90 percent of the additional money.

We said we will roll out our view of the big winners on three successive days, in reverse order.  On Monday, we explained why we think California is the third biggest winner in this latest round of funding. Yesterday, we outlined the package of funded projects that make the Midwest region the second biggest winner.

Today, we tell you why we think the biggest winner of all in the latest round is the Northeast Corridor, which runs from Washington, DC, to Boston, including stops in Baltimore, Philadelphia, New York and Providence.  All together, USDOT awarded $795 million to the projects on the Northeast Corridor, including $450 million for power, track, and signal improvements on a 24-mile stretch between New Brunswick and Trenton, NJ; $295 million to unsnarl an interlocking in Queens, NY; and a total of $50 million for preliminary engineering and environmental work for a bridge replacement on the Susquehanna River and station improvements in Kingston and Providence, RI.

The $450 million awarded to Amtrak for the New Brunswick to Trenton corridor project will boost capacity, reliability, and speed in this heavily-used segment of the Northeast Corridor by adding high-tension catenary, upgraded power facilities, and high-speed interlockings.  The award also will fund track and interlocking upgrades between Morrisville, PA, and Trenton and at New York Penn Station.

The $295 million awarded to New York DOT will pay for new routings through Harold Interlocking in Queens, NY, one of the busiest passenger rail interlockings in the nation, allowing Amtrak through trains to/from New York or Boston to bypass the interlocking.  The project also will improve access to nearby Sunnyside Yard.

In March, Secretary LaHood designated the Northeast Corridor as a federally-recognized high-speed rail corridor, making Amtrak eligible to compete for this round of funding awards.  Several Democratic senators from Northeast Corridor states praised this designation and issued a statement applauding Monday’s awards.

Not all influential elected officials were as sanguine.  House T&I Committee Chairman John Mica (R-FL), a strong supporter of improved passenger service on the Northeast Corridor, issued a statement on the announced awards: “. . . with Amtrak’s plan to spend $117 billion over the next 30 years, the Administration continues to take a piecemeal approach to improving the NEC.  We need a comprehensive, responsible plan for the Northeast Corridor, and Amtrak – our nation’s Soviet-style passenger rail service – is incapable of carrying out a project of this scope and significance.  We need to bring in the private sector to finance, design, build, operate and maintain true high-speed service in the Northeast Corridor if we are going to have any chance of success.”

Peter W. Denton also contributed to this post.

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As discussed in yesterday's post on California, three big winners have emerged from the U.S. Department of Transportation’s announcement of $2 billion in federal funds to 15 states for 22 different high-speed and intercity passenger rail projects.  The second biggest winner of this funding round is the Midwest region.

Illinois received $186 million for upgrades and improvements to the Chicago – St. Louis corridor between Dwight and Joliet, Ill., to allow trains to operate at 110 mph (from 79 mph) and increase operational flexibility and reliability.  Also on the Chicago – St. Louis corridor, Missouri received $13.5 million for design work on a new span to replace the circa-1890 Merchant’s Bridge over the Mississippi River.

Michigan received $196 million for track rehabilitation and positive train control implementation along the Chicago – Detroit corridor between Kalamazoo and Dearborn, which will allow trains to travel at 110 mph for 235 miles.  Michigan also received $2.8 million for preliminary engineering and environmental work on a new high-speed rail station in Ann Arbor, Mich.

Michigan Gov. Rick Snyder welcomed the news, stating that an “investment of this magnitude can spur economic development in our communities with rail stations, and provide access to a 21st century rail system that will help Michigan citizens compete in a global economy.”

In addition to the funds for track work, Illinois, Indiana, Iowa, Michigan and Missouri received $268 million for the purchase of 48 passenger rail cars and seven locomotives for eight separate intercity rail corridors.  The new bi-level cars replace aging and obsolete Amtrak equipment and can travel at speeds up to 125 mph.

All told, yesterday Midwestern states received approximately $657 million of the $2 billion in federal funds redistributed from the canceled Florida high-speed rail project.

"This is a big deal," said Transportation Secretary Ray LaHood. "America's ready for high-speed rail. Nothing can stand in the way of it. We're going to create a huge economic corridor between Chicago and Detroit and beyond."

The federally-designated Chicago Hub Network envisions mostly incremental upgrades to increase speeds of existing passenger rail service on a variety of rail lines radiating from Chicago, including service to St. Louis, Detroit, Milwaukee, Indianapolis, Des Moines, Cleveland, and Minneapolis.  While newly installed governors in Wisconsin and Ohio have rejected federal funds over concerns about operating subsidies and cost overruns, states like Illinois and Michigan have welcomed the passenger rail funding.  Total federal funds now awarded to Midwestern states for high-speed and intercity passenger rail include nearly $1.5 billion for Illinois, $400 million for Michigan, $230 million for Iowa, and $71 million for Indiana.

Kevin M. Sheys also contributed to this post.
 

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Today U.S. Transportation Secretary Ray LaHood announced an additional $2 billion in High-Speed Intercity Passenger Rail Program funding, bringing the total awards for the program to $10.1 billion.

The $2 billion awarded today by the Department of Transportation was largely redistributed from initial awards to Florida, whose governor canceled the state’s high-speed rail project due to concerns about cost overruns and operating subsidies.  DOT distributed today’s funds to 22 projects in 15 states, but three big winners together received over $1.8 billion or about 90% of the additional money.

Secretary LaHood focused on the job-creating benefits of these grants, stating that “the investments we’re making today will help states across the country create jobs, spur economic development and boost manufacturing in their communities.”

On the theory that good news on high speed and intercity rail should be savored, we will roll out our view of the big winners on three successive days, in reverse order.

The third biggest winner in this latest round of funding is California.

The California High Speed Rail Authority (“CHSRA”) today received $300 million to help extend by an additional 20 miles construction of an initial 113-mile Central Valley segment (from Bakersfield to Fresno) of its proposed statewide system.  The CHSRA has already received almost $3 billion in federal funds for final design and construction of the Central Valley segment.  The additional funds will allow CHSRA to extend the initial construction segment from Fresno north to a wye junction, where one future track will be constructed to San Jose and another future track will be constructed to Merced.

Curt Pringle, chairman of CHSRA, said today: “It is a testament to the strength of California’s project that we have won 40 percent of every federal dollar awarded for the development of high-speed rail. In the past 15 months we have won the lion’s share of federal dollars, unlocked state bond funds and began engaging the private sector to secure their future participation, so that we can begin construction and begin creating thousands of quality jobs next year.”

The proposed California high-speed rail system will eventually traverse up to 800 miles and is currently estimated to cost about $45 billion.

Peter W. Denton also contributed to this post.

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The fiscally conservative House majority continues to pursue reductions in federal spending, and federal transportation spending is part of the mix.  Further use of the general fund to supplement the Highway Trust Fund motor fuel taxes, as well as increases in fuel taxes, are opposed by the House majority.  Cuts could come in several forms, including cuts in Title 23 programs overall or cuts to specific programs.

Given the diminishing role of the Highway Trust Fund in funding future transportation investment, federal credit assistance under the TIFIA program needs to grow in significance.  But concerns are rising that TIFIA will be among the U.S. Department of Transportation programs targeted for substantial cuts in the current and next fiscal years.  Such cuts would put in jeopardy the financial feasibility of most of the large, complex projects that are being delivered via public-private partnerships in the U.S.

In response, leaders of transportation agencies from across the country delivered a letter to Congress on Feb. 14 urging against such action.  The letter, signed by 21 leaders of state and regional transportation agencies, states:

"The TIFIA program remains one of the critical methods available in this country to advance major transportation projects by leveraging private sector funding. While we would like to see the program’s capacity increased and are working to do so as part of the SAFETEA-LU authorization process, it is critical that Congress provide the authorized level of $122 million this fiscal year.  Given the fact that this authorized level can be leveraged to over a billion dollars of infrastructure investment, there are few federal programs that provide this return-on-investment for the American taxpayer and the economy as a whole."

The letter is a summons to all in the surface transportation sector to make the case to Congress and the Administration to preserve, if not expand, the TIFIA program.

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