Infrastructure Improvements, Job Creation Consistent With GovernorÂ’s Economic Growth Agenda
Governor Donald L. Carcieri today announced that has requested the necessary legislative approval to use a new and innovative federal financing program to jump-start construction of five vital transportation projects.
The proposed projects, dispersed throughout the East Bay and the West Bay, would be financed, in large measure, by what is referred to as "GARVEE" bonds. According to the Governor, projects funded with the proceeds of a Grant Anticipation Revenue Vehicle (GARVEE) are subject to the same requirements as other federal aid projects. The reimbursement process, however, is structured a bit differently to reduce financing costs and, just as importantly, speed-up the construction timetable.
The Governor is targeting five projects, noting that the "state will save millions of dollars in maintenance and future capital expenses and, in the process, create a powerful engine for job growth." Specifically:
Constructing a new Sakonnet River Bridge, connecting the towns of Tiverton and Portsmouth, would greatly improve the safety of passengers travelling to and from Aquidneck Island. The Governor has pledged that he would build a new span without imposing tolls.
Relocating and realigning Route 195 in Providence would vastly improve the traffic patterns at the second busiest interchange in New England and eliminate the precarious twists and turns that make the roadway challenging. The project would also help spark the development of the City of ProvidenceÂ’s Old Harbor Plan.
Building a new Washington Bridge on the Providence/East Providence line will replace an aging and dilapidated structure with a modern span capable of moving traffic freely and efficiently.
Moving forward with the long awaited Freight Rail Improvement Project in North Kingstown would help build upon the existing intermodal strengths at the Quonset Davisville Industrial Park. The project would allow the continuation of freight service along a 22-mile corridor.
Embarking on Phase II of the Route 403 project in North Kingstown would open up a vast array of viable development possibilities within the adjacent Quonset Davisville Industrial Park and, just as importantly, significantly reduce commercial traffic in nearby residential neighborhoods.
What are the benefits of GARVEE? The GARVEE financing mechanism generates up-front capital for major highway projects at tax-exempt rates and enables a state to construct a project on an expedited basis. With projects in place sooner, costs are considerably less due to inflation savings and the public realizes safety and economic benefits. By utilizing prospective Federal Highway Administration reimbursements, the price tag of the project is spread over its useful life and not just the construction period.
The Governor noted that upon taking office, he asked Rhode Island Department of Transportation Director James R. Capaldi P.E. to investigate new and different methods of financing badly-needed highway projects. "I want to see our critical infrastructure improvement projects move quickly, efficiently and at reduced cost to the taxpayer," said Governor Carcieri. The Governor noted that Ohio, Michigan, Massachusetts and Colorado are among those states that have taken already advantage of the cost-saving benefits of federal GARVEE financing.
To supplement the estimated $585 million in federal reimbursed GARVEE bonds, the State of Rhode Island will also issue revenue bonds totaling approximately $125 million that will be paid back by tapping a portion of the gas tax.
For more information on the Governor's vision please consult the web site www.gov.state.ri.us