Federal Highway Administration 18-03
Contact: Jim Pinkelman,
202-366-0660
Friday, May 23, 2003
U.S.
Transportation Secretary Mineta Announces $140 Million Loan For SR 125 South
Toll Road, Salutes California Public-Private Partnership
U.S.
Transportation Secretary Norman Y. Mineta today announced that the federal
government has executed a $140 million loan for the SR 125 South Toll Road project
in San Diego, CA. The borrower is
the
San Diego
Expressway Limited Partnership (SDELP), a private entity whose general partner
is California Transportation Ventures, Inc. (CTV).
CTV is a subsidiary of the Macquarie
Infrastructure Group (MIG), an international fund investing more than $150
million to develop and operate the toll road.
The
loan was made under an innovative financing program established by the
Transportation Infrastructure Finance and Innovation Act of 1998 (TIFIA).
The loan
proceeds will be used to help finance the design and construction of a 9.2-mile,
four-lane toll road in San Diego County, California, connecting State Route 905
near the Otay Mesa port of entry from Mexico to the region’s freeway system
about 1.5 miles south of State Route 54 in Spring Valley.
“This
project is a TIFIA success story, demonstrating how innovative federal financing
tools can attract private investment to critical transportation projects,”
Secretary Mineta said. “TIFIA
provides an alternative to grants as a way of doing business, allowing private
partners to share with the government the risk and rewards of infrastructure
investment, thereby providing transportation, creating jobs and contributing to
economic growth.”
In
its recently released proposal to reauthorize federal surface transportation
programs entitled the Safe Accountable Flexible Efficient Transportation Equity
Act of 2003 (SAFETEA), the Bush Administration placed a significant emphasis on
fostering similarly innovative public-private partnerships.
Among other things, the proposal includes an expansion of the TIFIA
program to include new kinds of freight projects and the project threshold was
lowered from $100 million to $50 million. In
addition, tax-exempt financing treatment is being sought for privately managed
and operated highways similar to what is currently available to public entities.
MIG,
with headquarters in Sydney, Australia, is the largest developer of toll roads
in the world, with a portfolio of 26 roads in eight countries.
The SR 125 South Toll Road
is MIG's first project in the United States.
“The SR 125 South Toll Road is an exciting opportunity for MIG to deliver a road that has been part of California's planned freeway system since 1959,” MIG Chief Executive Officer Stephen Allen said. “SR 125 South Toll Road will improve regional mobility and enhance access for residents, employment centers and businesses in the South Bay area of San Diego.”
The
TIFIA loan will provide part of the overall project financing, in conjunction
with bank debt being provided by Spanish bank Banco Bilbao Vizcaya Argentaria,
S.A. and Irish bank DEPFA BANK plc. These
two experienced international project financiers will be the joint lead
arrangers of a $400 million senior secured construction and term loan facility,
which will be syndicated following financial close.
TIFIA authorizes innovative financing
through which DOT provides credit assistance rather than grants to public and
private sponsors of major surface transportation projects. Eleven projects worth more than $15.4 billion have been
selected to benefit from TIFIA with $3.5 billion in credit assistance at a
budgetary cost of only $183 million to the federal government.
The
SR 125 South Toll Road is a key link in the regional transportation system that
is needed to accommodate economic growth in the southern part of San Diego
County. The project will facilitate
traffic and trade across the U.S.-Mexico border at the Otay Mesa crossing.
The current estimated project cost (including
preliminary engineering, development costs, construction and financing) for the
SR 125 South Toll Road is $642 million. The
project is being funded from a combination of senior bank debt, TIFIA loan,
sponsor equity, and donated right-of-way. This is the first TIFIA project advanced with substantial
private equity and bank loans.
TIFIA
is designed to provide 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.
Projects eligible for assistance under TIFIA include highways and
bridges; transit facilities and vehicles; intercity passenger bus and rail
facilities and vehicles, including Amtrak and components of magnetic levitation
systems; and publicly owned intermodal surface freight transfer facilities on or
adjacent to the National Highway System.
SR 125 South Toll Road
was one of the first five projects selected for credit assistance through TIFIA,
which was authorized
under the 1998 Transportation Equity Act for the 21st Century (TEA-21).
Other projects selected to receive support under TIFIA include Tren
Urbano Transit System, San Juan, PR; Miami Intermodal Center;
Farley-Pennsylvania Station redevelopment project, New York; Metrorail Capital
Program, Washington, DC; Staten Island Ferries and Terminals, New York; Cooper
River Bridge, Charleston, SC; Reno Transportation Rail Access Corridor, Reno,
NV; Central Texas Turnpike, Austin-San Antonio, TX, corridor; the San
Francisco/Oakland Bay Bridge; and the Warwick Train Station project, Warwick,
RI.
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