DALLAS -- Federal grants for East Coast transit systems damaged by Hurricane Sandy in 2012 are credit positive because the work being funded by the grants will reduce the financial strain from future storms, Moody's Investors Service said Monday in its latest credit outlook report.
The $3.6 billion of Federal Transit Administration competitive grants awarded last week to 40 transit projects from Washington, D.C., to New England will upgrade and improve existing infrastructure to make rail and bus systems more resilient to natural disasters, Moody's said.
"The projects will help to harden existing infrastructure and create new systems and infrastructure to protect transit assets from natural disasters," said analyst John Lombardi. "We expect these projects to reduce the strains on agency funds in response to future severe storms."
Approximately 90% of the grants went to resilience projects in New York and New Jersey, where transit systems sustained the worst of the storm damage. The remainder was awarded to projects in Connecticut, the District of Columbia, Massachusetts, New Hampshire, and Pennsylvania.
The grants authorized by the Disaster Appropriations Relief Act of 2013 demonstrate federal support and "acknowledge the essential nature of public transit in the region," Lombardi said.
The 2013 act provided a total of $10.9 billion for FTA's emergency relief program in areas affected by Hurricane Sandy, but sequestration cut the total by almost $545 million.
Approximately $9.3 billion of the total $10.4 billion of available grants have been awarded, including $5.7 billion for initial and ongoing recovery work. FTA received 61 requests for the disaster relief grants totaling $6.6 billion in the latest round.
Transportation Secretary Anthony Foxx said the resiliency grants will help ensure that the money spent to restore transit service won't go down the drain in the next mega-storm that hits the region.
"While no one can predict the future with certainty, we believe these investments will help to harden transit facilities against future storms that Mother Nature dishes out, supporting President Obama's call to address climate change now and reducing the risk of service disruptions and future damage to some of the nation's busiest rail and bus services," Foxx said last week in New York where the grants were announced.
"We've made great progress rebuilding critical transit connections since Hurricane Sandy, and we want to make sure no one pays for these repairs twice," he said.
Many of grant projects will be underground and invisible to many riders, Foxx said.
"But they will give this region a fighting chance to withstand the kind of punishment that Mother Nature can mete out," he said.
New York's Metropolitan Transit Authority, whose bus and rail systems serve a population of 8 million with more than 3 billion trips, received $1.6 billion in grants for projects including flood protection facilities at multiple street-level openings, improved underground water pumping capacity, and flood-proof communications systems.
New Jersey Transit's $1.3 billion of FTA grants will enable the agency to reduce the risk of flooding at its rail yard in Hoboken and replace a bridge damaged by Sandy with one less vulnerable to storm surges.
The New York City Department of Transportation received a $191 million resiliency grant from FTA to upgrade its two ferry terminals and purchase two new Staten Island ferry boats capable of carrying out large-scale evacuations. The new boats are expected to be operational by 2019.