Department of Transportation initiates loan program for short lines: Railway Age

A short line train pulls tank cars. Image: Flickr/Schnitzel_bank

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The U.S. Department of Transportation (DOT) recently announced the launch of a pilot program, the Railroad Rehabilitation and Investment Financing (RRIF) Express, to expedite long-term, low-cost loans for America’s short line and regional freight railroads.

RRIF Express is aimed at reducing the time and costs associated with securing loans to modernize aging freight rail infrastructure. In addition to expedited handling of loan requests, the program provides up to $26 million in additional financial support.

Under U.S. Transportation Secretary Elaine Chao’s leadership, the Build America Bureau will administer this new program in an effort to support economic activity and improve the safety, capacity and reliability of this freight transportation sector.

For qualified applicants, the new program will significantly cut credit risk premium costs and adviser fees, costs that borrowers would otherwise have to pay in the traditional RRIF program. Letters of interest will be accepted beginning Jan. 12 and ending April 11.

The Notice of Funding Opportunity on the bureau’s website may be found here

“We’re so pleased that this administration is launching a serious and smart effort to make the RRIF program work for smaller operators,” said Chuck Baker, president of the American Short Line and Regional Railroad Association. “Access to long-term, low-cost capital is a challenge in this industry, especially for railroads serving small town America. RRIF can be an effective solution, but only if it can be reliably and quickly accessed; this express program shows great promise for meeting that need.”

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Jim Blaze

Jim Blaze is a railroad career economist with an engineering background and a strategic analysis outlook. Jim’s career spans 21 years with Consolidated Rail Corporation (CONRAIL), 17 years with the rail engineering firm Zeta Tech Associates, 7 years with the State of Illinois Department of Transportation in Chicago urban goods movement research, and two years studying what to do with the seven bankrupt and unrecognizable Northeast railroads at the federal agency USRA. Now primarily a teacher and writer, Jim likes to focus on contrarian aspects of the railroad industry.