Florida taps TIFIA for express lanes
The U.S. Department of Transportation in early March issued a $607 million loan to the state of Florida to construct 'high-occupancy toll' (HOT) lanes on a 10.5-mile stretch of Interstate 595.
The loan is made possible through a program enacted by the Transportation Infrastructure Financing and Innovation Act (TIFIA) of 1998. TIFIA financing comes in several different forms. It is designed to leverage non-federal resources and multiply the value of the initial federal investment.
In Florida, the private co-investor is ACS Infrastructure Development. It was selected by the Florida Department of Transportation to finance, build, operate and maintain the HOT lanes under a 35-year concession. The ACS loan has a low, fixed interest rate and flexible repayment terms for the private company, which is expected to deliver the construction project about 15 years sooner than the typical project delivery method of hiring a company to design a project and then tendering it for general contractors to bid on, the U.S. DOT said.
ACS is contributing $950 million of up-front money for the $1.8 billion project, $750 million of which it borrowed from banks. Another $200 million is cash from its private investors.
The new express lanes are expected to remain congestion free because tolls will vary according to traffic volume to modulate demand.
The Florida DOT will continue to set and collect the tolls, and make annual payments to ACS based on meeting performance standards for the road.
As of December 2008, a total of $4.8 billion of TIFIA assistance was committed to 15 projects. The Florida project is the first TIFIA loan made in 2009.
The National Surface Transportation Infrastructure Financing Commission recommends that Congress increase the credit capacity of TIFIA, broaden its scope to include pre-construction feasibility assessments and allow TIFIA to support half of eligible project costs, up from 33 percent.
Florida taps TIFIA for express lanes
