Cheap loan could help build toll roadPublished 9:18pm Tuesday, January 22, 2013
State transportation officials hope to reduce the $1.4 billion new Route 460’s financial shock to the commonwealth with cheap credit under a federal loan program, Virginia Port Authority commissioners heard Tuesday.
At a VPA Board of Commissioners meeting in Norfolk, 460 project manager Morteza Farajian, from the state Office of Transportation Public-Private Partnerships, said officials are hoping to secure a loan under the Transportation Infrastructure Finance and Innovation Act.
Officials believe the new 55-mile toll road from Suffolk to Petersburg fits TIFIA criteria of “(a) nationally or regionally significant surface transportation project” with “substantial state and private co-investment.”
“There is a really good opportunity for the project to receive a TIFIA loan … (with the) benefit shared between the commonwealth and the VPA,” Farajian said.
Under a contract Gov. Bob McDonnell inked on Dec. 20, the Virginia Department of Transportation will provide $903 million for the $1.4 billion project, and the Virginia Port Authority will chip in another $250 million. Bond sales by the Route 460 Funding Corp. of Virginia netted $243 million.
Farajian said anywhere from $150 million to $500 million could be borrowed under the TIFIA program.
A letter of interest has been sent to the TIFIA office, which replied with a letter requesting more information on the road project, Farajian said.
The office “want(s) to know the project qualifies for all the categories”, he said. And, before deciding how much it can lend, “first they want to look at our financial proposal … (and) revenue study.”
“We are submitting different (financial structure) scenarios with them. … We just need to work out which proposal would work for the TIFIA office,” Farajian continued.
The federal credit program comes with two different interest rates, he said, one “below the market” and the other, reserved for rural projects, that is half again.
“That’s (the rural rate) what we are trying to get for this project,” he said. The rate would be “1.6 percent — something like that,” he added.
Construction on the road is expected to begin in December 2014, and the new road will open in 2018, according to a news release. Tolls are currently set to begin at 7 cents per mile for cars and 21 cents for trucks, translating to $3.69 and $11.72, respectively, for the entire 55-mile route.