The announcement, made at the Airports Authority’s monthly board meeting on Wednesday, is the result of a concerted effort to reduce costs on the Silver Line Project, which is funded in part by tolls, and remains predicated on receipt of a low-interest federal Transportation Infrastructure Finance and Innovation Act (TIFIA) loan and the previous commitment of $300 million by the Commonwealth of Virginia to off-set toll increases.
“Our objective from the very beginning of our stewardship of the Metrorail Project has been to reduce the burden placed on users of the Dulles Toll Road,” said Jack Potter, Airports Authority president and CEO.
“We have already realized significant savings from debt refinancing, a lower than expected winning bid for the major design-build contract for Phase 2 of the project and the important contribution of $300 million from the Commonwealth of Virginia during the 2013 legislative session," he said. "Securing the TIFIA loan is the final piece of the puzzle to let us freeze toll rates for the next five years.”
The Airports Authority, along with its project partners Fairfax County and Loudoun County, were invited to apply for a low-interest TIFIA loan in February. While the loan still requires final federal approval, it would directly benefit drivers on the toll road. By supplying financing at more favorable interest rates than through private capital markets, less money would need to be generated by tolls to cover long-term financing costs for the project. A decision on the loan application is expected in the near future.
At its meeting the board also authorized the issuance of $450 million Dulles Toll Road Revenue Refunding Bonds. If the TIFIA loan is approved, this round of bonds, which are guaranteed against future revenue generated by tolls on the Dulles Toll Road, would fund the remaining portion of the Dulles Toll Road share of the Silver Line Project.
“This is a significant milestone,” said Board Chairman Frank M. Conner III. “Assuming our TIFIA loan application is successful, and we have every indication it will be, when these bonds are issued later this year the Airports Authority will have secured financing for the full amount of the project expected to be covered by tolls from the Dulles Toll Road. This will allow us to take much of the uncertainty out of future toll rates and to work to find additional cost savings that can be passed along to drivers.”
The bonds are expected to be issued in May.