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Friday, Sept. 12, 2003
Contact: Ruth Weber, 202-366-0660
FHWA 31-03
U.S. Transportation Secretary Mineta
Cites Benefits Of Innovative Financing
At Groundbreaking for SR 125 South Project
U.S. Transportation Secretary Norman Y. Mineta today
joined state and local officials at an historic groundbreaking ceremony for the
southern-most segment of the SR 125 South project, a key element in enhancing
the surface transportation system in the growing San Diego area.
“The expansion of SR 125 is powerful testimony to the importance of innovative
financing in the expansion of our transportation system,” Secretary Mineta
said. “By working together creatively at the federal, state and community
level, we have been able to harness the power of the private sector in support
of new transportation infrastructure. As a result we will achieve a long-term
goal to improve transportation in the San Diego area that also will reduce
congestion, keep the air clean, strengthen the economy, and put new technology
to work for us.”
Federal loan assistance was essential to the SR 125 South Toll Road financial
plan, 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 borrower is the
San Diego Expressway Limited Partnership, 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
approximately $150 million to develop and operate the toll road.
A major objective of the TIFIA program is to enhance the credit quality of the
senior financing, thereby facilitating access to private capital markets for the
financing of new transportation projects. The terms negotiated for this loan
provide the first example of a partnership acceptable to both TIFIA and a
private sector investor.
“In addition to its other benefits, this project demonstrates how our innovative
federal financing tools can attract private investment to critical
transportation projects,” Secretary Mineta said. “TIFIA has provided 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, and 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 to lower the project threshold 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.
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 to the federal government of only $174 million.
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.
The SR 125 South Toll Road will accommodate development and economic growth in
southern San Diego County and will facilitate the increasing trade traffic
across the U.S.-Mexico border crossing at Otay Mesa. The project is a key link
in the regional transportation system and has the strong support of local,
regional, and state governments.
The SR 125 South Toll Road project is an approximately 9.2-mile toll road in San
Diego County. It connects State Route 905 near the Otay Mesa port of entry from
Mexico to the region's outer-loop freeway system about 1.5 miles south of State
Route 54 in Spring Valley. The project, now budgeted at $642 million, will open
initially as a four-lane facility and is being designed so that it may be
expanded in the future, based on transportation needs.
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