August 1, 2016 - bondbuyer.com /TRA Newswire
DALLAS -- Sponsors of passenger and high-speed rail projects are leaving billions of funding dollars on the table by not taking advantage of a federal rail program that has made only $2.7 billion of low-interest loans from a $35 billion authorization, the Government Accountability Office said in a report to Congress.
The low-interest loans and loan guarantees of the Railroad Rehabilitation and Improvement Financing loan program have been under-utilized since they were adopted as part of the Transportation Equity Act for the 21st Century (PL 105-178) federal funding law in 1998, said Susan Fleming, director of physical infrastructure at GAO. The report was sent to the Senate Committee on Commerce, Science and Transportation and the House Committee on Transportation and Infrastructure.
"America's rail transportation infrastructure, including its passenger rail system, requires substantial repair as well as new capacity to accommodate growth," Fleming said. "Financing the various rail infrastructure projects will be challenging."
Congress has not funded the Federal Rail Administration's program for high-speed intercity passenger rail passenger rail projects since fiscal year 2010 while appropriations to Amtrak have remained relatively steady at about $1.4 billion per year over the last five years, she said.
The FRA can extend loan guarantees and make direct RRIF loans to finance up to 100% of eligible project costs. Projects eligible for the loans and guarantees include passenger rail as well as freight rail improvement projects, refinancing of project debt, and the construction of new intermodal or railroad facilities.
Railroad operators, state and local governments, and public-private partnerships are eligible for the RRIF loans.
So far, FRA has executed 35 loans with an approximate value of $2.7 billion, or about 8% of the total funds available, since the program began in 1998, with another $2.5 billion of projects under review, Fleming said.
The loans went to 29 freight projects and six passenger rail projects, but passenger rail accounted for $1.9 billion of the total, she said. No loan guarantees have been provided.
"While as of May 2016 only six loans had been made to passenger rail projects in the history of the program, future demand for RRIF loans may come largely from passenger rail projects," she said.
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