US DOT to expand pilot programme for rail financing

2 November 2020 (Last Updated November 2nd, 2020 15:47)

The US Department of Transportation (DOT) is set to expand the scope of a pilot programme that seeks to expedite financing for short line and regional railroads.

US DOT to expand pilot programme for rail financing
The RRIF Express is aimed to reduce time and costs associated with securing loans to modernise ageing rail infrastructure Credit: analogicus from Pixabay.

The US Department of Transportation (DOT) is set to expand the scope of a pilot programme that seeks to expedite financing for short line and regional railroads.

The move will expand eligibility and offer additional flexibility to the Railroad Rehabilitation and Improvement Financing Express (RRIF Express) programme.

US Transportation Secretary Elaine L Chao said: “Expanding this financing programme will strengthen the short line and regional railroad system, promote economic growth in rural communities, and boost America’s economic competitiveness.”

The RRIF Express scheme was initially devised to reduce costs and time associated with securing loans for upgrading freight and commuter rail infrastructure.

The revised programme will support loan disbursements up to $150m for qualified borrowers. The previous limit was $50m.

The updated RRIF Express programme will now also consider more types of projects for eligibility and will increase the option to finance loan amount from 40% to 75%.

American Short Line and Regional Railroad Association (ASLRRA) president Chuck Baker said: “The RRIF Express programme, originally introduced in December 2019, was a well-thought-out attempt to improve the traditional RRIF programme, and it has generated substantial interest throughout the country.

“Since that time, the RRIF Express programme was modified and improved, once in March 2020, and again now. In my opinion, the modifications being introduced in this iteration combine to form a robust and significant improvement to the RRIF Express programme.”

The US DOT’s Build America Bureau will administer the programme.

The move comes a week after the US approved more than $291m in grants to improve the rail infrastructure in the country. The amount will be allocated to 11 intercity passenger rail projects in nine states.