The federal government approved a $1.6 billion Transportation Infrastructure Finance and Innovation Act loan for the New York Thruway Authority’s new Tappan Zee Bridge.
While the approval was slower than expected, the loan size may have been larger than expected. In April authority chief financial officer said he expected the TIFIA loan to be approved in July. New York Gov. Andrew Cuomo announced the approval on Thursday.
In March the authority said it was hoping for a $1.5 billion loan. At $1.6 billion it will be by far the largest loan in TIFIA’s history.
The authority expects the bridge to cost around $3.9 billion. It has said that construction of the bridge will be financed with the TIFIA loan and revenue bonds.
Construction of the new bridge to replace the existing Tappan Zee Bridge has already started.
Proceeds of the TIFIA loan will be used for, among other things, paying off a $700 million note that the authority has outstanding.
“Approval of New York State’s request for this loan is great news for the tens of thousands of commuters who depend on the Tappan Zee every day, for communities in the Lower Hudson Valley, and for our entire state,” Cuomo said. “This is a huge win for New York state, creating thousands of jobs and an endorsement of one of the most ambitious infrastructure projects in our history.”
The Tappan Zee bridge spans the Hudson River about 20 miles north of New York City. The bridge was opened in 1955. Designed to carry 100,000 vehicles a day, bridge traffic has grown to 138,000 vehicles daily.
The authority has had to spend hundreds of millions of dollars to maintain the structure. Heavy traffic and a lack of emergency shoulders can create unsafe conditions and can lead to traffic congestion, according to the governor’s press office.
The authority’s general revenue bonds are rated A by Standard & Poor’s and A1 by Moody’s Investors Service. Standard & Poor’s downgraded the authority from A-plus Tuesday citing expected debt burdens from the Tappan Zee project.
The authority did not immediately respond to The Bond Buyer’s inquiries.