Compliance 360: Ports gain DOT respect

Ports gain DOT respect    Freight transportation—ports in particular—has been the red-headed stepchild of federal transportation policy for decades. Congress and the Department of Transportation have focused on supporting highway expansion for motorists, who complain about congestion and vote.
   In the past six years, though, ports have become a greater part of the national dialogue on infrastructure investment.
   President Barack Obama, Vice President Joe Biden and DOT Secretary Anthony Foxx have visited numerous ports and spoken of their role as catalysts for economic development. DOT officials have partnered with the American Association of Port Authorities to help ports with infrastructure investment, most notably through the Maritime Administration’s Strong Ports program. Kristin Decas, Port Hueneme’s director and AAPA’s immediate past chairwoman, has served on the DOT’s Maritime Transportation System National Advisory Committee and its Freight Advisory Committee, bringing a port perspective to policy discussions. And Maritime Administrator Paul “Chip” Jaenichen has helped the administration recognize the importance of ports.
   All that relationship building has paid off in several ways, including the fact that port authorities are eligible for awards under several DOT grant programs. But more work is still necessary.
   Since 2009, more than $500 billion in TIGER grants have been invested in 43 port projects across 24 states. Over the seven TIGER rounds of funding, ports have accounted for about 8 percent of the applications, but have received more than 11 percent of the awards. The AAPA feels a quarter of TIGER funding should be dedicated to port-related infrastructure.
   Port authorities are also eligible for money under the new FASTLane discretionary program for nationally significant highway projects, and the 10 percent set-aside for intermodal facilities in the freight formula program.
   DOT estimates that freight volume will increase 45 percent in the next 30 years to accommodate population growth. “This growth will especially increase demands on our ports and waterways,” Foxx said.
   Meanwhile, DOT’s new Build America Transportation Investment Center (BATIC) is working with ports to streamline the application process for credit assistance programs such as TIFIA (Transportation Infrastructure Finance and Innovation Act) and RRIF (Railroad Rehabilitation and Improvement Financing). The programs offer loans, loan guarantees and standby lines of credit with flexible repayment terms and low interest rates, making it easier to access capital markets, but bureaucratic requirements have deterred many project sponsors from applying.
   The Obama administration stood up the BATIC in 2014 to make it simpler and easier to access infrastructure financing programs. Among the challenges: TIFIA is embedded in the Federal Highway Administration and RRIF in the Federal Railroad Administration; environmental permitting staff are scattered throughout the different modal administrations and regional offices; and technical experts are all over the department.
   BATIC, which started out as a pilot working group, is a one-stop shop where project sponsors can tap all DOT resources and get help navigating the application process. BATIC 2.0 evolved last summer with the creation of a core team of five persons who play the coordination role.
   BATIC works with the TIFIA office to determine what port projects are eligible. It helps ports put letters of interest in transportation language DOT regulators recognize and helps them sort out compliance with requirements for things such as environmental reviews, “Buy America” requirements, and hiring disadvantaged business enterprises.
   So far two ports have received TIFIA financing for outside-the-gate projects: PortMiami for the new tunnel bypass to Interstate 95 and the Port of Long Beach for overhauling the Gerald Desmond Bridge.
   The TIFIA legislation says money can go to port terminals if projects facilitate intermodal exchanges and port access. BATIC has been able to convince TIFIA that ports, by definition, are intermodal transfer zones, Deputy Director Roger Bohnert said. Otherwise, they’d just be a marina.
   As a result, the Maritime Administration has become the TIFIA office’s partner and allowed different port projects to be eligible for aid.
   The best example of this is the $500 million modernization of Port Newark Container Terminal. The next phase is estimated to cost $230 million and a TIFIA loan represents a large chunk of the financing. The process began in September. Credit rating letters are expected to be completed in April and the package should be finalized soon after, setting a precedent for port financing.
   BATIC 3.0 is now evolving into the National Surface Transportation Innovative Finance Bureau, which was established under the FAST Act to align, coordinate and consolidate existing finance programs and FASTLane grants. It builds upon BATIC’s success so far, but gives the transportation secretary unique authority to move around people and resources as necessary.
   Bohnert said the structural reorganization of these programs is complex, but incremental implementation will begin this summer and continue into the winter.