/ Financial / Louisiana to Tap $600M in GARVEE Bonds to Build Major Highway Projects in Three Areas

Louisiana to Tap $600M in GARVEE Bonds to Build Major Highway Projects in Three Areas

Parul Dubey on February 26, 2018 - in Financial, News

Gov. John Bel Edwards and Louisiana Department of Transportation and Development Secretary Shawn Wilson said they would seek $600 million in federal Grant Anticipation Revenue Vehicle (GARVEE) bonds to build four major road and bridge projects that have been in the state’s transportation master plan for decades.

They said Jan. 29 that Louisiana would begin the administrative process to request the bonds, consistent with state law. Those types of bonds borrow against expected future state allocations of federal-aid highway program funds by the Federal Highway Administration.

Two days later, the LaDOTD announced that the Legislature’s Joint Transportation, Highways and Public Works Committee approved the GARVEE bond request.

“With the GARVEE bonds, we will be able to utilize the proceeds to expand and preserve critical elements our interstate system,” Wilson said. “This will create a better quality of life for citizens, a better experience for visitors, and a stronger economy for Louisiana by redeveloping our current infrastructure to meet the needs of business and the traveling public.”

He also said that the DOTD “is committed to maintaining and growing our interstate system and delivering transformational projects, and through this funding we will finally be able to deliver some much-needed projects across the state. Make no mistake, this does not solve our transportation funding problem, it simply addresses the tip of the iceberg of infrastructure needs.”

When the funding is received, the LaDOTD said, it will allow the state to build the following:
-A substantial portion of a project to rebuild and widen Interstate 10 from the Mississippi River Bridge to the I-10/I-12 split in Baton Rouge.
-A new Interchange on I-10 in Kenner at Loyola Drive to serve the new Armstrong airport terminal that is now under construction.
-A new access from I-20 directly into Barksdale AFB in Bossier City.
-Up to 10 percent of project cost for new toll bridges. The announcement said that the Belle Chasse bridge and tunnel replacement project would be eligible if the funds are necessary.

While the state would repay the GARVEE debt over 12 years, the LaDOTD also said that “significant financial contributions are being made by local governments and the metropolitan planning organizations in the impacted areas of the state.

Those include the city of Baton Rouge/EBR Parish, Capital Region Planning Commission, city of Kenner, Jefferson Parish, city of New Orleans, New Orleans International Airport, Regional Planning Commission, city of Bossier City, Bossier Parish and Northwest Louisiana Council of Governments.

“This innovative funding mechanism is needed in Louisiana at this time,” Edwards said. “These projects impact three large areas of our state and are of the utmost importance for economic development and for convenience to the traveling public. The longer we wait, the more they cost and the more we lose.”

The governor added: “It makes sense to move forward using GARVEE bonds and significant local contributions to fund these projects. We hear complaints of our crumbling infrastructure and growing congestion all the time. Without reliable funding available, tools like this will help us accelerate much-needed reconstruction and improvements to our system.”

All of the projects are expected to receive environmental clearance by the end of 2018, which is also about the time the state expects the GARVEE program funding to be finalized.

In addition, the department said it will seek approval to use design-build contracting for the Loyola Interchange and Barksdale entrance projects so that both projects will not have to wait for funding once environmental clearance is achieved. Those contracts can save time and money by combining the traditionally separate design and construction phases.

The LaDOTD said it will make a decision on the preferred contracting method for the I-10 reconstruction and widening once the project analysis is completed.

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