Secretary Mineta applauds Innovative financing for S.R. 125 South project

Public Roads, March-April, 2004

U.S. Transportation Secretary Norman Y. Mineta recently joined State and local officials at a historic ground-breaking ceremony for the southernmost segment of a construction project on State Route (S.R.) 125 South in southern California. A key element in enhancing the surface transportation system in the growing San Diego area, the project involves developing and operating a toll road to reduce congestion and pollution.

Federal loan assistance was essential to finance the road, providing flexibility in the repayment structure during the project's ramp-up period. The Federal government executed a $140 million loan for the project under an innovative financing program established by the Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA). The terms negotiated for the loan provide the first example of a partnership acceptable to both TIFIA and a private sector investor.

TIFIA provides Federal credit assistance to major transportation infrastructure projects that address critical national needs, such as intermodal facilities, border crossing infrastructure, highway trade corridors, and transit and passenger rail facilities with regional and national benefits. Although the S.R. 125 project satisfies loan eligibility criteria by falling into the major highway category, funds also may be allocated under the categories of bridges, intercity bus and rail systems, and transit facilities and vehicles.

By enabling USDOT to provide credit assistance (rather than grants) to private sponsors, TIFIA facilitates the accessing of private capital markets for financing major transportation projects.

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