November 28, 2012
PDT Staff Writer
The Ohio Department Of Transportation (ODOT) has expressed interest to the U.S. Department of Transportation in receiving a Transportation Infrastructure Finance and Innovation Act (TIFIA) direct loan to help construct the Portsmouth Bypass.
According to the Federal Highway Administration website, “the TIFIA program provides Federal credit assistance in the form of direct loans, loan guarantees, and standby lines of credit to finance surface transportation projects of national and regional significance. TIFIA credit assistance provides improved access to capital markets, flexible repayment terms, and potentially more favorable interest rates than can be found in private capital markets for similar instruments. TIFIA can help advance qualified, large-scale projects that otherwise might be delayed or deferred because of size, complexity, or uncertainty over the timing of revenues. Many surface transportation projects - highway, transit, railroad, intermodal freight, and port access - are eligible for assistance. Each dollar of Federal funds can provide up to $10 in TIFIA credit assistance - and leverage $30 in transportation infrastructure investment.”
ODOT spokesperson Steve Faulkner said some money has been set aside for loans that states can apply for certain projects.
“Something that makes this (Portsmouth Bypass) appealing for this funding is its nature and location geography in southeastern Ohio,”Faulkner said. “We believe seven billion dollars is available through this program and an estimated $30 billion worth of projects have identified their interest in receiving some kind of money. Not all of the projects may be eligible to receive money. We believe this is a project that could be eligible for a portion of that money.”
Faulkner said while ODOT may have identified the total cost of the project at $819 million, ODOT is only seeking a TIFIA loan to cover 41 percent of the total project cost — which includes $660 million in construction costs, $13.1 million in design, $63.7 million in reserves and $82 million in estimated finance costs. He said a TIFIA loan is just one of many funding options ODOT is looking into.
“If we are granted the TIFIA loan there is interest on that loan that would need to be payed back. Similarly if there is a design build finance element, we would have to pay some finance charges on that,” Faulkner said. “A savings would be incurred when you look at the fact that with a plan like this, we could begin construction on the Portsmouth Bypass as soon as 2014. If we don’t pursue innovation or some kind of ultimate funding method. If we stuck with the typical status-quo way of doing things a project like this would be decades into the future.”
ODOT announced earlier this year they would be delaying the start of the Portsmouth Bypass to explore a public/private partnership (P3). According to ODOT, the public-private partnerships will allow ODOT to work with the private sector in developing new and innovative ways to develop, finance, maintain or operate a transportation facility. Kathleen Fuller, ODOT District 9 spokesperson, said it would likely be the end of the year before it’s known if a public/private partnership is an option for the Portsmouth Bypass.
“I was told a couple of weeks ago we were looking at the end of the year at the earliest and maybe December we would have a decision about the public/private partnership,” Fuller said.
Phase 1 of the construction will be from Shumway Hollow Road to Lucasville-Minford Road and is slated to cost an estimated $83 million with a time frame of three years to complete. Phase 2 of the construction has a five-year time frame for completion. Construction is set to begin at Lucasville-Minford Road to U.S. 23 and is expected to cost an estimated $242 million. Phase 3 is estimated to begin construction in 2017. Construction is slated for Shumway Hollow Road to U.S. 52. This phase is expected to cost $281 million.
The construction cost is an estimated $405 million.
“If we do not do a public/private partnership we are still moving forward with phase one of the project through traditional bidding,” Fuller said. “Some time next year we could potentially see construction start on Phase 1. If we go P3 we won’t see construction next year because it would be too early because it would be a package deal.”
Faulkner said that ODOT is looking at these options because it would otherwise take decades to construct, based upon current funding.
“We are going to continue to look at ways to be innovative when it comes to seeking financing. Even if only a portion of the funding is approved for a TIFIA loan, we would still need to come up with the remaining funding to get that project done. This is a three phase project we want to try to have done at the same time,” Faulkner said.
He said the timetable moving forward is, “we’ve expressed interest in the money available. That’s to help us see if this project is viable as a potential candidate for a TIFIA loan. Once the feds have decided if this is an project that is either acceptable to receive TIFIA loan or not an acceptable project. We will then submit a formal application.”
For more information about the bypass, visit www.portsmouthbypass.com, or call 888-819-8501, ext. 774-8834.
Wayne Allen may be reached at 740-353-3101, ext. 228, or firstname.lastname@example.org.