Governor Andrew M. Cuomo today announced that the New York State Thruway Authority and the U.S. Department of Transportation (USDOT) have closed on a $1.6 billion low interest loan from USDOT’s Transportation Infrastructure Finance and Innovation Act (TIFIA) program to support the New NY Bridge project.
The TIFIA loan is the largest in the history of the program and nearly $700 million more than any other loan made under the program. The New NY Bridge is the largest highway and bridge project in North America, one of the largest construction contracts in New York State history, and one of the most ambitious infrastructure projects the state has undertaken in decades.
“The closing of this historic TIFIA loan from the federal government is yet another milestone in our journey to build the New NY Bridge,” Governor Cuomo said. “After more than a decade of delay, we have worked closely with the federal government to move this project forward at a dramatic pace with an unprecedented level of transparency and community involvement. We are fully committed to seeing this project through on time and on budget, while limiting the impact on both toll payers and taxpayers. The support of the USDOT proves just how significant and vital the new bridge is to our state’s infrastructure and economy, and I thank the agency for their partnership.”
“The New York State Thruway Authority is grateful for the leadership of Governor Cuomo and the strong support of Transportation Secretary Anthony Secretary Foxx and the USDOT,” said Thruway Authority Chairman Howard P. Milstein. “The New NY Bridge project has become a model for how a major project like this can be planned and managed effectively using private sector knowledge and public sector transparency.”
“The success of the New NY Bridge project is a reflection of the extraordinary partnership of New York State agencies and employees, the federal government and highly knowledgeable consultants working with our contractor,” said Thruway Authority Executive Director Thomas J. Madison. “I want to extend special thanks to Administrator Victor Mendez and the entire Federal Highway Administration for their invaluable support and guidance over the past two years.”
The TIFIA program allows for flexibility in how loan proceeds are to be paid. Under the terms of the closing today, the Thruway Authority will not begin to draw on the proceeds until early 2019, and will not make any repayments until five years later. The interest rate on the TIFIA loan is 3.89 percent.
The closing of the TIFIA loan comes one day after the closing on the sale of $1.6 billion in five-year bonds to support the New NY Bridge. The Thruway Authority developed an innovative new credit structure to use the TIFIA loan proceeds to pay off the $1.6 billion in General Revenue Junior Indebtedness Obligations sold yesterday. There was strong demand in the market for the five-year bonds, and the final interest cost is 2.277 percent, much lower than the 3.89 percent interest on the TIFIA loan.
Construction on the New NY Bridge began in October, and test pilings and other pre-construction activities have been underway since earlier this year.
Under Governor Cuomo’s leadership and with the support of USDOT and other federal agencies, environmental review for the project was completed in just 11 months, far less than the seven years that is typical for projects of this complexity and magnitude. Extensive measures will be in place throughout the duration of the project to protect the environment and to monitor the impact of construction on surrounding communities.
In fact, in a span of just 14 months, the procurement process for the New NY Bridge was completed and a Project Labor Agreement (PLA) between the Thruway Authority and 14 labor organizations that will generate an estimated $452 million in savings on project costs was signed – in addition to the completion of the environmental review process.
When completed, the New NY Bridge will mean less congestion for motorists, with eight traffic lanes, four breakdown/emergency lanes, and state-of-the-art traffic monitoring systems, as well as a dedicated commuter bus lane from the day it opens. Designed and constructed to be mass-transit-ready, the new crossing will be able to accommodate bus rapid transit, light rail or commuter rail. The twin-span bridge will also include a bike and pedestrian path.
Design-build legislation signed into law by Governor Cuomo in December 2011 allows the state to enter into a single contract for the design and construction of major capital projects. The design-build contract for the New NY Bridge will help keep the project on-budget and on-time, because financial risk associated with most cost overruns or schedule delays lies with the contractor, rather than toll payers or taxpayers.
Congresswoman Nita Lowey said, “This is great news that will create momentum in 2014 for this major job creator and infrastructure project. It’s yet another big step forward in the construction of a New Tappan Zee Bridge, a critical link in our region’s infrastructure system and lifeline for commuters and businesses. I am excited that the largest ever TIFIA loan for a transportation project has closed. After over a decade of hard work and perseverance, the work on a new bridge can now move forward, creating jobs and helping New York’s economy grow. I am grateful to Governor Cuomo and my colleagues in the federal delegation for their continued commitment and teamwork in bringing a new Tappan Zee Bridge to the Lower Hudson Valley.”
Congressman Eliot Engel said, “This is good news for the Hudson Valley and the entire downstate area. The new Tappan Zee Bridge will enhance the well-being of the downstate area as well as New England by promoting an expanded economic development. This is the largest TIFIA loan ever and it is for a most important project.”
Congressman Sean Patrick Maloney said, “This historic investment in the Hudson Valley will create tens of thousands of good paying jobs, boost our economy, and serve commuters and businesses for decades. Since joining Congress, I’ve made it a top priority on the Transportation and Infrastructure Committee to cut through the red tape and work with our local, state and federal partners to push this process forward. I want to thank Governor Cuomo and other federal officials to finally get this done for folks in the Hudson Valley after a decade of delay.”
Press Release, December 20, 2013