RRIF Loans and Possible Uses (Gateway vs. Xpress West)

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Andrew

OBS Chief
Joined
May 3, 2013
Messages
613
I do support XpressWest.

But, if the a RRIF loan is used to help finance the project, would this make it more difficult for Amtrak to take out a RRIF Loan for new Acela Train-sets or Gateway?
 
I think over $32 Billion is left in RRIF--and Amtrak is anticipated to take out a RRIF loan for new Acela train-sets shortly.
 
I think over $32 Billion is left in RRIF--and Amtrak is anticipated to take out a RRIF loan for new Acela train-sets shortly.
Andrew, of the things to worry about with regards to Amtrak funding sources, the amount left in the RRIF authorization is way down the list. RRIF is authorized to distribute $35 billion total in federally backed loans with, according to the FRA website, $7 billion reserved for non Class 1 railroads. Since Amtrak is, IIRC, actually a Class 1 railroad that leaves $28 billion, with perhaps $1 to $2 billion used so far. RRIF is one of the most underused of the federal loan programs because of the strings attached and terms.

Xpress West applied for $5.5 billion, which they were unable to qualify for. XW in combination with the new NV HSR Authority might try again for RRIF, or a TIFIA type program, or private activity bonds. But even if XW were to qualify for a circa $6 billion RRIF loan, that would still leave plenty for Amtrak and CHSRA to draw on. That is, if they can qualify or, in the case of Amtrak, Congress outright gives Amtrak in effect a $14 billion RRIF line of credit to draw on.
 
I think over $32 Billion is left in RRIF--and Amtrak is anticipated to take out a RRIF loan for new Acela train-sets shortly.
Andrew, of the things to worry about with regards to Amtrak funding sources, the amount left in the RRIF authorization is way down the list. RRIF is authorized to distribute $35 billion total in federally backed loans with, according to the FRA website, $7 billion reserved for non Class 1 railroads. Since Amtrak is, IIRC, actually a Class 1 railroad that leaves $28 billion, with perhaps $1 to $2 billion used so far. RRIF is one of the most underused of the federal loan programs because of the strings attached and terms.

Xpress West applied for $5.5 billion, which they were unable to qualify for. XW in combination with the new NV HSR Authority might try again for RRIF, or a TIFIA type program, or private activity bonds. But even if XW were to qualify for a circa $6 billion RRIF loan, that would still leave plenty for Amtrak and CHSRA to draw on. That is, if they can qualify or, in the case of Amtrak, Congress outright gives Amtrak in effect a $14 billion RRIF line of credit to draw on.
According to the RRIF Website, https://www.fra.dot.gov/Page/P0128

"Up to $7.0 billion is reserved for projects benefiting freight railroads other than Class I carriers. "

It is my understanding that XpressWest began Environmental Review in 2006--and a Record of Decision was issued in 2011--but the $5.5 Billion RRIF Loan request was ultimately turned down. (I think two hotel companies had promised to chip in had the RRIF Loan be OK'd). IIRC, Congressional Republicans thought that RRIF money would be better utilized on Amtrak's Northeast Corridor, and the Obama Administration was upset that the XpressWest project would not use 100% domestically sourced components.

The $14 billion has not been reserved yet for Amtrak--but I expect Congress to pass the Amtrak reauthorization by Spring of 2016 at the latest. I expect that, should Congress reserve $14 billion for Amtrak's Northeast Corridor like they proposed they would, Gateway would get several billion--perhaps 7 billion--of the $14 Billion RRIF pot of money.

RRIF is expected to be part of the Gateway funding pot...

http://www.nj.com/opinion/index.ssf/2015/08/the_source_of_your_commuter_hell_your_governors_cr.html
 
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I am still left wondering how Amtrak would pay the loan back. Seems like it will be a way to kick the can down the road like was done with the way in which Eurotunnel was financed. Ultimately the debt had to be restructured and part of it forgiven etc.
 
Wouldn't it be Smart Management to borrow it now @ today's Low Interest and Pay it back in Cheaper Dollars?

Oops, that's a contradiction in terms, Amtrak and Smart Management!
 
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It depends on how much debt load is reasonable for Amtrak to carry. Just because the interest rates are low, I don't see you Jim going and acquiring yourself a mansion which you can pay off in cheaper dollars :p

Frankly I don't know the answer to the question I pose regarding Amtrak's ability to carry a debt load. It has been working hard of late to try to reduce its debt load so that it can take on some moderate amount of debt for equipment. Furthermore one needs to ask why is it fair to have Amtrak carry all the debt load for the tunnels when 80% of its usage is by NJTransit?

And even furthermore, why is it that when it comes to rail infrastructure people roll over and talk about loading up the guardians of them with huge debt while the highways get away with 80/20 or 90/10 formula where the larger number is the percentage that is funded by capital grants from the federal government? What the hell is the matter with the rail advocates?
 
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Why will Amtrak carry the debt load for Andrew's pet project?

Because the Governor of NJ Transit wants it that way? Obviously no one messes with him and gets away with it, as people in high places look out for him! :rolleyes:

Whatsamatta with rail advocates?

They've been beaten so many times they have an inferiority complex?
 
What you said is sure true in regards to me jis.( old, poor, retired Gov. hand on a fixed income).

But back when I was in Grad school ( MPA in Public Administration)I had Biz classes with lots of MBA aspirants and borrowing now @ low interest and paying it back in cheaper dollars was the Gospel!

Debt wasn't considered a bad thing then and evidently this is what has gotten the US Government into the pickle it's in now.

We owe more than there is money in the world! As the late Senator Dirksrn of Illinois used to say, "A Billion here, a Billion there, pretty soon were talking about real money!"

The loose change in the Pentagon and HLS budgets would fund Amtrak till the end of time!

And it sure would be a great Jobs Program along with fixing up the rest of our crumbling infrastructure! YMMV
 
Just because the NEC is profitible under some analyses does not mean it is making money hand over fist. If you saddle the corridor with massive debt to get Gateway done, that means you have no cash for the B&P tunnels, DC's Long Bridge, the various drawbridges in CT, the stressed electrical infrastructure, Amfleet replacements, etc.
 
Just because the NEC is profitible under some analyses does not mean it is making money hand over fist. If you saddle the corridor with massive debt to get Gateway done, that means you have no cash for the B&P tunnels, DC's Long Bridge, the various drawbridges in CT, the stressed electrical infrastructure, Amfleet replacements, etc.
And if you don't get Gateway done, how do you possibly grow the capacity into New York City, and help Amtrak better deal with redundancy in the event of a stalled train?
 
And if you don't get Gateway done, how do you possibly grow the capacity into New York City, and help Amtrak better deal with redundancy in the event of a stalled train?
Andrew, this is a thread on Xpress West, not Amtrak. Unfortunately I responded to your post about RIFF which helped to take this thread off-topic. If you want to continue to discuss Gateway and how to pay for it, post in the NEC Gateway thread.
The questions for XW are what happens once a Nevada HSR Authority is setup, gets a board and some staff in place? Which could take a year or longer.

I think in order for XW to move forward and succeed in building their line, they have to work closely with the CA HSR project and eventually tie their line into CA HSR so XW trains to Vegas can someday operate out of LA and SF over CA HSR tracks to Palmdale and then to Vegas. XW also needs the CA HSR line to, at a minimum have the Bakersfield to Palmdale segment well along in construction before they start service over a XW Palmdale to Vegas corridor. The viability of a stand-alone Victorville to Vegas corridor operating for more than a couple of years is questionable while the Victorville to Palmdale segment is completed.
 
Just because the NEC is profitible under some analyses does not mean it is making money hand over fist. If you saddle the corridor with massive debt to get Gateway done, that means you have no cash for the B&P tunnels, DC's Long Bridge, the various drawbridges in CT, the stressed electrical infrastructure, Amfleet replacements, etc.
And if you don't get Gateway done, how do you possibly grow the capacity into New York City, and help Amtrak better deal with redundancy in the event of a stalled train?
Yeah added track capacity is great, but what good does it do you if your substations start blowing up because you've got too many locomotives drawing the from the caternary? Or what about when you can run all the trains out of New York you want, but you can't stuff them through Baltimore?

The whole corridor needs so much investment it's not even funny, and if Amtrak tries to borrow the cash to do so the debt service is going to cripple them until the end of time. A modern NEC is not going to happen without government grants, end of story. RRIF loans can be part of the funding mix, but expecting them to pay the whole thing is gonna be a long time waiting for a ship that won't come in.
 
Just because the NEC is profitible under some analyses does not mean it is making money hand over fist. If you saddle the corridor with massive debt to get Gateway done, that means you have no cash for the B&P tunnels, DC's Long Bridge, the various drawbridges in CT, the stressed electrical infrastructure, Amfleet replacements, etc.
And if you don't get Gateway done, how do you possibly grow the capacity into New York City, and help Amtrak better deal with redundancy in the event of a stalled train?
Yeah added track capacity is great, but what good does it do you if your substations start blowing up because you've got too many locomotives drawing the from the caternary? Or what about when you can run all the trains out of New York you want, but you can't stuff them through Baltimore?

The whole corridor needs so much investment it's not even funny, and if Amtrak tries to borrow the cash to do so the debt service is going to cripple them until the end of time. A modern NEC is not going to happen without government grants, end of story. RRIF loans can be part of the funding mix, but expecting them to pay the whole thing is gonna be a long time waiting for a ship that won't come in.
I never said anything about a RRIF Loan paying for the whole thing!

Rather, they can be a PART of the funding mix for Gateway, along with NEW START'S Grants and CMAQ Grants. Remember, the ARC tunnel was supposed to get $3 billion from New Starts, and there has been some recent talk about Gateway receiving New Start's money as well, if New Jersey Transit and the MTA get on board for it, which I think they will.

If Amtrak anticipates receiving the Record of Decision in October of 2018, I wonder how long it will take until tunneling contracts get signed--and actual boring begins.
 
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FWIW, I expect that XPressWest with the new Nevada HSR Authority will probably go back around and apply for another RRIF loan. They'll probably have to promise to meet the Buy America rules. :p There will still be loads of money left in the RRIF revolving fund.

Gateway is important for NJ Transit capacity... but I don't see a solid return-on-investment for Amtrak, financially. This makes it hard to apply for an RRIF loan. It would be better if Amtrak used RRIF loans for the things which are proven revenue-generators. The Sprinters (being purchased now) are actually a bit of a stretch. The Acela IIs are a pretty obvious case of "this will generate money to pay the loan back". Frankly, so are the Viewliner IIs, although so far Amtrak has paid cash for them.
 
Are you saying that Amtrak should not even raise commute rail fees and use their future operating profits to pay back debt service on the RRIF Loan for Gateway?
 
Amtrak won't get to set the commuter rail fees any more, if the PRIIA provisions ever get implemented. :sigh: The new fee structure *may* create a possibility of NJ Transit paying higher fees for use of new tunnels which Amtrak could then use as a revenue stream to pay back an RRIF loan. Or it may not -- it's very unclear to me what the new fee structure actually will be.
 
Amtrak won't get to set the commuter rail fees any more, if the PRIIA provisions ever get implemented. :sigh: The new fee structure *may* create a possibility of NJ Transit paying higher fees for use of new tunnels which Amtrak could then use as a revenue stream to pay back an RRIF loan. Or it may not -- it's very unclear to me what the new fee structure actually will be.
I just still don't think the the RRIF Loan will pay for the ENTIRE Gateway Tunnel Resielency Project. NJ Transit and the MTA's Long Island Rail Road will be a part of this project, so New Starts funding should get available, CMAQ funds as well, and perhaps some money from a future multi-year federal transportation bill...

And remember, commuter rail fees will go up by $100 million this October 1st, and another $105 million on October 1st of 2018. I'd bet they go up again at least once at some other point between 2018 and 2030.

There has also been talk about cost-sharing for the Gateway Program as well: http://www.njspotlight.com/stories/14/10/22/analysis-new-jersey-facing-hefty-price-tag-for-new-rail-tunnels/

Let's not forget Port Authority contributing to Gateway, but I still don't see how RRIF wouldn't be a part of Gateway.
 
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Amtrak won't get to set the commuter rail fees any more, if the PRIIA provisions ever get implemented. :sigh: The new fee structure *may* create a possibility of NJ Transit paying higher fees for use of new tunnels which Amtrak could then use as a revenue stream to pay back an RRIF loan. Or it may not -- it's very unclear to me what the new fee structure actually will be.
I just still don't think the the RRIF Loan will pay for the ENTIRE Gateway Tunnel Resielency Project. NJ Transit and the MTA's Long Island Rail Road will be a part of this project, so New Starts funding should get available, CMAQ funds as well, and perhaps some money from a future multi-year federal transportation bill...

And remember, commuter rail fees will go up by $100 million this October 1st, and another $105 million on October 1st of 2018. I'd bet they go up again at least once at some other point between 2018 and 2030.

There has also been talk about cost-sharing for the Gateway Program as well: http://www.njspotlight.com/stories/14/10/22/analysis-new-jersey-facing-hefty-price-tag-for-new-rail-tunnels/

Let's not forget Port Authority contributing to Gateway, but I still don't see how RRIF wouldn't be a part of Gateway.
Cuomo and Christie want the Fed's to pay for half of Gateway.

I imagine that Amtrak will partner with the MTA and NJ Transit to help get Gateway funded.

Not including New Starts funding and CMAQ funding, why can't Amtrak take out a long-term, low interest RRIF Loan to help fund Gateway (and the Fed's share)?
 
Why should they when highways continue getting 80% and 90% match from the Feds?
Are you saying that you think Congress will end providing some Gateway money?

Also, do you know if a "two phase" approach is still expected--by Amtrak putting off the Penn Station South Expansion until a later date?
 
FWIW, I expect that XPressWest with the new Nevada HSR Authority will probably go back around and apply for another RRIF loan. They'll probably have to promise to meet the Buy America rules. :p There will still be loads of money left in the RRIF revolving fund.
That won't happen now. The whole thing will be built without US Government money. Technically it won't even have to follow Buy American rules.
 
Yeah. The thing will basically get funded by China through some financing deal and I am sure they will make it all as convenient as possible for themselves like the US has done for decades in US funded projects everywhere else.
 
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