The Port Authority of New York and New Jersey will have to spend more than $2 billion to repair the damage from storm Sandy, but the storm will ultimately have little financial impact on the Port Authority, said authority executive director Patrick Foye.
Foye provided the figures and the impact projection in a question-and-answer session with reporters on Wednesday after a scheduled meeting of the authority’s board of commissioners.
“We expect that after insurance, self-insurance, Federal Transit Administration, Federal Emergency Management Agency funding, et cetera, that there will be no material impact on the Port Authority,” Foye said.
The authority’s PATH transit system bore the biggest amount of damage, at $800 million. The World Trade Center construction site also sustained $500 million in damage. Sandy also damaged the authority’s Holland Tunnel and three major airports.
“We expect the impact from Superstorm Sandy will not have a negative impact on our ratings on the [Port Authority],” wrote Standard & Poor’s director Joseph Pezzimenti on Jan. 22. “Storm-related service interruptions were relatively short-term.”
Authority officials expect available insurance coverage and federal disaster relief funds will substantially cover the economic loss the authority sustained, Pezzimenti said, noting that ratings could face stress if Sandy’s impact is long-term.
“Negative rating pressure could also follow if the agency’s debt service coverage or liquidity position suffer should insurance coverage and federal disaster relief funds not substantially cover storm-related losses,” Pezzimenti wrote.
“It is currently our understanding that the resulting financial impact from Sandy will be limited given the authority’s insurance coverage and expected Federal reimbursements,” said Fitch Ratings senior director Ken Weinstein. “That said, the timing of reimbursements and repair activities is of concern in situations like these and we will be monitoring for any impact on the Authority’s significant liquidity position.”