N.Y. MTA Gets $1B Federal Loan for Signal Safety

The Federal Railroad Administration has approved a $967.1 million loan to New York's Metropolitan Transportation Authority for signal system safety improvements on the MTA's two commuter railroads, Long Island Rail Road and Metro-North Railroad.

The loan, the largest and lowest-cost financing for the MTA, will finance the installment of positive train control, a technology designed to remove the potential for human error that can lead to train-involved accidents. "This loan is a dramatic investment in the MTA," Gov. Andrew Cuomo said April 24.

Earlier in the day, Cuomo, appearing at a breakfast forum sponsored by the business group Association for a Better New York, said he would renominate Thomas Prendergast for a full six-year term. Prendergast has been filling out the term of Joseph Lhota, who resigned at the end of 2012 to run for New York City mayor. The Senate must approve the nomination.

The loan is the largest to have been made through the Federal Railroad Administration's railroad rehabilitation and improvement financing program. The full MTA board is scheduled to vote on it April 29, with final closing expected in May.

The MTA will issue its transportation revenue bond directly to the FRA and will repay the obligation over 22½ years at a fixed interest rate of 2.38%. Standard & Poor's rates the MTA's transportation revenue bonds AA-minus, while Moody's Investors Service and Fitch Ratings rate them A2 and A, respectively.

Positive train control is a technology that allows computerized systems to automatically control certain aspects of train movement. It is intended to prevent train-to-train collisions, trains accidentally traveling into areas where track workers are working, or derailments caused by excessive train speed or the movement of a train through an improperly aligned switch.

The technology is supposed to prevent accidents like the Spuyten Duyvil derailment in the Bronx on Dec. 1, 2013, where a Metro-North train was going faster than its maximum allowable speed. Four people were killed and dozens injured in that wreck.

Congress mandated the installation of positive train control in 2008 for all commuter railroads in the U.S.

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Transportation industry New York
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