(Updates with revised loan size in first paragraph.)
Feb. 14 (Bloomberg) -- New York state has applied for a $2 billion federal loan for construction of a $5.2 billion replacement for the Tappan Zee Bridge across the Hudson River, state officials said.
Transportation Commissioner Joan McDonald said the state sent a letter of interest to the Federal Highway Administration and U.S. Department of Transportation, which administers a program that provides credit assistance for “regionally significant” infrastructure projects.
“They’re reviewing it now,” McDonald said in an interview today after leaving a Cabinet meeting with Governor Andrew Cuomo in Albany.
McDonald said during the interview that the loan request was for $3 billion, a figure later revised to $2 billion by her spokesman, Bill Reynolds.
“The commissioner misspoke,” he said in telephone interview.
Bloomberg News had asked Reynolds for a copy of the letter in a Feb. 6 e-mail. It wasn’t provided.
Replacing the 56-year-old bridge, which carries 138,000 vehicles a day between Rockland and Westchester counties as part of the New York State Thruway system, is a priority for Cuomo. In his $132.5 billion budget, the governor didn’t identify a specific funding source, though said the new bridge would be financed with public money. The 54-year-old Democrat has compared building a new Tappan Zee to the construction of the Erie Canal in the 19th century.
The three-mile-long (4.8-kilometer) bridge is estimated to cost $5.2 billion, with the price tag rising as high as $16 billion if public transportation projects are included. Loans through the Transportation Infrastructure Finance and Innovation Act, which McDonald said the state applied for in December, can be used only to pay for one-third of a project’s total estimated cost under current law. If New York is applying for the full amount, that would make the value of the project $6 billion.
Legislators in Washington are currently considering whether to increase the participation limit to about 49 percent of the total cost.
“We’re following what happens in Congress very closely,” McDonald said.
Fluor Corp., Bechtel Group Inc., Skanska AB and Grupo Dragados SA are part of four teams selected to bid on the project, the state said in a Feb. 7 statement.
State officials have mostly been mum on financing plans. At today’s cabinet meeting, Cuomo said only, “We’re working on a financial plan.”
New York’s Transportation Department hired Jeffrey A. Parker & Associates to develop a funding plan, according to a December announcement. The Philadelphia-based financing consultant specializes in public infrastructure projects and will help secure a federal loan, according to the firm’s website.
Tifia loans are generally used for projects costing more than $500 million, last about 35 years and have an interest rate tied to U.S. Treasuries. As of Feb. 10, Tifia’s interest rate was 3.14 percent.
Nancy Singer, a U.S. transportation department spokeswoman, said in an e-mail she couldn’t immediately comment.
--With assistance from Martin Z. Braun in New York and Carol Wolf in Washington. Editors: Mark Schoifet, William Glasgall
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