The Transportation Infrastructure Finance and Innovation Act (TIFIA) must remain a competitive federal transportation programme, approve projects speedily, and take a portfolio approach, funding projects with different risk profiles, now that it has been significantly expanded, Macquarie Capital managing director of government advisory and affairs DJ Gribbin argued.
“It would be a loss to the transportation community if TIFIA could not be used as an incentive to encourage new thinking,” Gribbin told the Senate Committee on Environment and Public Works during a recent hearing, crediting the programme with prioritising project selection, innovation in project finance, and creativity in project delivery.
Pointing out that “the TIFIA success story goes far beyond the $11 billion invested in $43 billion worth of projects,” Gribbin proposed ways of making TIFIA, which has been expanded nearly ten-fold, better and more effective.
“Now that Congress has increased funding for the TIFIA programme, the most serious challenge facing the programme is the time it takes to process and approve a loan application,” Gribbin said.
According to Gribbin, most of his proposed changes can be made administratively without requiring a change in statute. They include centralising decision-making power by making TIFIA part of the Office of the Secretary of Transportation; provide borrowers with a loan amount, not a credit subsidy amount; and establish any policy changes that will apply to a given project when the letter of interest is accepted and make no subsequent policy changes for that project.
He also called for TIFIA to adopt a portfolio approach, which means approving projects with varying degrees of risk.
A minimal risk or zero-risk strategy “would work against the policy foundation of the TIFIA programme, which was to provide credit for projects that would otherwise be difficult to construct,” he said. “It is important to recognise that even the worst-performing TIFIA loan is better than the best grant in terms of the return it provides taxpayers.”
Secretary of Transportation Anthony Foxx also provided testimony during the hearing, his first since being sworn into office in early July. The hearing was aimed at examining the way changes are being implemented in the TIFIA programme following the enactment of the Moving Ahead for Progress in the 21st Century Act (MAP-21).
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