Tuesday, July 31, 2012

US Stumps Up for Multimodal Logistics, Port and Road Transport Schemes

Series of Plans to Stimulate Jobs Announced
Shipping News Feature

US – Ray LaHood, US Secretary of Transport recently announced potential loans for up to $17 billion to fund infrastructure projects as a result of the surface transportation bill. The Bill provided $1.7 billion in capital over two years for the Transportation Infrastructure Finance and Innovation Act (TIFIA) credit assistance programme making it the largest transportation infrastructure finance fund in the department’s history. The TIFIA programme authorises the Department of Transport to provide credit assistance in the form of secured direct loans, lines of credit, and loan guarantees to public and private applicants for eligible surface transportation projects including multimodal and other logistics schemes with the hope to create jobs and encourage economic development and growth. Secretary LaHood said:

“[The] Obama Administration is launching the largest infrastructure loan program in [American] history, these investments will help cities and states create jobs right away building the big transportation projects we need to make sure our economy continues to grow and prosper.”

According to the authorities each dollar of federal funds can provide approximately $10 in TIFIA credit assistance, meaning $17 billion in loans through TIFIA, which in turn will hopefully leverage $20-$30 billion in transportation infrastructure investment. Altogether the authorities hope the expanded federal loan program could result in up to $50 billion in Federal, state, local and private sector investment for critical transportation projects across the country. A wide range of infrastructure projects are eligible for the funding, including everything from highway and passenger rail projects to public transit and international bridges and tunnels. At the time of writing the interest rate on a 35 year loan via TIFIA is 2.61%.

It was also announced earlier this month, that the Government are to accelerate a review of seven nationally and regionally significant infrastructure projects to help modernise and expand five major American ports namely Jacksonville, Miami, Savannah,  the combined ports of New York / New Jersey, and Charleston. The seven projects are the first in a set of forty three projects with more plans yet to be announced. With the widened Panama Canal opening in 2014 to much larger ships, preparing U.S. ports for Post-Panamax vessels is essential to the economic activity these ports support.

During the past three years and four rounds of Transportation Investment Generating Economic Recovery (TIGER) grants, DOT has awarded $353 million to 25 different port-related infrastructure projects. The government have already invested more than $10 million in the Port of Jacksonville through the TIGER program to build a new Intermodal Container Transfer Facility, which will expand capacity at the Port and improve energy efficiency.

Photo: The Garden City Terminal at the Port of Savannah, one of the ports benefitting from the infrastucture improvement schemes.