USDOT confirms TIFIA loan for Portsmouth bypass P3
U.S. Transportation Secretary Anthony Foxx has announced a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan for up to US$209.3 million to finance the Portsmouth Bypass in Scioto County, Ohio.
We recently reported that Fitch Ratings had assigned an expected rating of 'BBB(EXP)' for the project finance debt. Specifically the agency has assigned a rating of 'BBB(EXP)' to US$231 million of senior Treasurer of State (Ohio) private activity bonds (PABs) issued on behalf of the project and a rating of 'BBB(EXP)' to the US$209 million subordinate TIFIA loan . The PABs are expected to be priced this month.
Secretary Foxx stated:
"This is an important project that will not only improve highway safety, but represents an important partnership between the public and private sector to advance our overall investment in this nation's infrastructure. The Portsmouth Bypass will benefit the entire community by reducing the number of trucks in the city and opening up the area for economic development."
Deputy Federal Highway Administrator Gregory Nadeau commented:
"By using a P3 project delivery, Ohio Department of Transportation (ODOT) is able to accelerate this project. The TIFIA program is providing a critical piece of the financing to complete the missing link of the Appalachian Development Highway System in Ohio."
The TIFIA credit program is designed to fill market gaps and leverage substantial non-federal investments. Each dollar of federal funding can provide up to US$10 in TIFIA credit assistance and support up to US$30 in transportation infrastructure investment. Since its launch, the TIFIA program has helped 51 projects turn $22 billion in U.S. Department of Transportation assistance into $78 billion in infrastructure investment across America.
The ODOT selected the Portsmouth Gateway Group (PGG) as the preferred bidder for the project in September 2014. The team is composed by:
- Equity: ACS Infrastructure Development Inc.., Infrared Capital Partners Limited, and Star America Fund GP
- Contractors: Dragados, USA, Inc., The Beaver Excavating Company and John R. Jurgensen, Co., Inc. (Design Build Joint Venture)
- Designers: ms Consultants, Inc.
On 5 December 2014 ODOT entered into a concession agreement with the PGG to design, build, finance, operate, and maintain (DBFOM) the project for an approximately 41-year term. ODOT will compensate PGG through an availability payment mechanism.
The Portsmouth Bypass will be a four-lane, divided, limited-access highway around the City of Portsmouth in Scioto County, Ohio. The highway, to be designated State Route 823 (SR 823), is known as the Portsmouth Bypass and will comprise 16 miles of four lane divided highway, bypassing approximately 26 miles of US 52 and US 23 through Portsmouth.
The project includes construction of five new interchanges (U.S. 52, S.R. 140, Shumway Hollow Road, Lucasville Minford Road and U.S. 23.)
The total project investment is estimated at US$429 million.
The Portsmouth Bypass is the ODOT's largest single construction project, and its first PPP under new rules in the state that allow the private sector to participate in public transportation projects. As part of the Administration's Build America Investment Initiative, USDOT is working to expand opportunities for partnership between the public and private sectors, including through the establishment of a new Build America Transportation Investment Center as a one-stop shop to support potential PPP projects.
During the last month we reported about several transport PPP project in the USS:
