USDOT Announces $605M Loan for Grand Parkway Project

Tue February 26, 2019 - West Edition #5
USDOT


Construction has already begun on the Texas Grand Parkway, which is being developed using a design-build approach, with substantial completion expected May 2022.
Construction has already begun on the Texas Grand Parkway, which is being developed using a design-build approach, with substantial completion expected May 2022.

U.S. Secretary of Transportation Elaine L. Chao announced on Feb. 22 that the U.S. Department of Transportation's Build America Bureau will provide up to a $605 million Transportation Infrastructure Finance and Innovation Act (TIFIA) loan to the Grand Parkway Transportation Corporation (GPTC) in Houston. The loan is for the Grand Parkway Project's H & I Segments.

"This government investment of $605 million will help regional and local agencies develop the infrastructure that best meets the needs of their communities, increase connectivity, alleviate congestion, and enhance safety," said Chao.

The Grand Parkway is a tollway construction project in the Greater Houston area, which will develop the next sections of a proposed 184-mi. circumferential tollway. Segments H and I will add 43.6 mi. of tollway to the Grand Parkway.

The GPTC is governed by a three-person Board of Directors and was incorporated in 2012 as an instrumentality of the Texas Transportation Commission, created to build and operate the Grand Parkway System. The GPTC is an experienced borrower, having financed the first five segments of the Grand Parkway with an $840.6 million TIFIA loan. That initial system was completed and commenced tolling operations between February 2014 and April 2016.

Construction has already begun on the project, which is being developed using a design-build approach, with substantial completion expected May 2022. The TIFIA loan, which will be issued at a 3.03 percent interest rate with a term of 30 years after substantial completion, represents 31.5 percent of eligible project costs totaling $1.9 billion. The project will increase connectivity, expand capacity, enhance safety and accommodate population growth.

The Bureau, which administers the TIFIA credit program, was established as a "one-stop shop" to streamline credit opportunities, while also providing technical assistance and encouraging innovative best practices in project planning, financing, delivery, and monitoring. During Chao's tenure at DOT, the Department has closed nearly $5.4 billion in TIFIA financings, supporting more than $18.6 billion in infrastructure projects across the country.