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



## Andrew (Aug 27, 2015)

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?


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## jis (Aug 27, 2015)

Theoretically yes. The pool of money available through RRIF is limited. Any money that is already loaned to someone else cannot be re-loaned to Amtrak.


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## Andrew (Aug 27, 2015)

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.


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## afigg (Aug 27, 2015)

Andrew said:


> 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.


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## Andrew (Aug 28, 2015)

afigg said:


> Andrew said:
> 
> 
> > 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.
> ...


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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## jis (Aug 28, 2015)

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.


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## Bob Dylan (Aug 28, 2015)

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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## jis (Aug 28, 2015)

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  

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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## The Davy Crockett (Aug 28, 2015)

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! 

Whatsamatta with rail advocates?

They've been beaten so many times they have an inferiority complex?


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## Bob Dylan (Aug 28, 2015)

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


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## keelhauled (Aug 28, 2015)

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.


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## Andrew (Aug 29, 2015)

keelhauled said:


> 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?


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## afigg (Aug 29, 2015)

Andrew said:


> 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.


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## Anderson (Aug 29, 2015)

Ok, now it's a separate topic. That seemed easier.


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## keelhauled (Aug 29, 2015)

Andrew said:


> keelhauled said:
> 
> 
> > 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.
> ...


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.


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## Andrew (Aug 30, 2015)

keelhauled said:


> Andrew said:
> 
> 
> > keelhauled said:
> ...


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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## neroden (Sep 1, 2015)

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.  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.


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## Andrew (Sep 2, 2015)

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?


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## neroden (Sep 4, 2015)

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.


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## Andrew (Sep 4, 2015)

neroden said:


> 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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## Andrew (Sep 23, 2015)

Andrew said:


> neroden said:
> 
> 
> > 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.
> ...


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)?


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## jis (Sep 23, 2015)

Why should they when highways continue getting 80% and 90% match from the Feds?


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## Andrew (Sep 23, 2015)

jis said:


> 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?


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## leemell (Sep 23, 2015)

neroden said:


> 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.  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.


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## jis (Sep 23, 2015)

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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## neroden (Sep 24, 2015)

I'm expecting some highly convoluted deal involving Chinese purchase of bonds issued by the Nevada High Speed Rail Authority with the proceeds lent to XPressWest, with the Authority using eminent domain to get land and XPressWest reimbursing them for that, and XPressWest sending payments back to the Chinese company for construction, which then largely get subcontracted back to Nevada subcontractors...


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## leemell (Sep 24, 2015)

You know that Xpresswest does not need eminent domain as they already have approval to used the I15 corridor for their tracks and infrastructure.


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## Andrew (Sep 25, 2015)

The states of New York and New Jersey are looking at RRIF Loans to finance their share of Gateway:

http://newyork.cbslocal.com/2015/09/15/cuomo-christie-hudson-river-rail-tunnel-funding/


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## afigg (Sep 25, 2015)

leemell said:


> You know that Xpresswest does not need eminent domain as they already have approval to used the I15 corridor for their tracks and infrastructure.


I don't about eminent domain acquisition, but while the Victorville to Las Vegas HSR route follows the I-15 corridor, the tracks will not stay in the I-15 median for many parts of the route. They can't because the design constraints for curve and grades on a highway are quite different from 150+ mph railroad tracks. Plus the electrified corridor will need land for power stations, service access roads, maintenance support sites, construction sites, rail yards, and large footprints for the train stations in Victorville and Vegas.

Pulling up the 2011 Record of Decision approving the DesertXpress route and searching for acres, there are numerous references to acres impacted by or required for the alternative route segments. For example: "The rail alignment would cross through several designated grazing land allotments, all within California. Approximately 442 acres of grazing lands would be directly and permanently converted to transportation uses, assuming the construction of Segment 4C. Most of this acreage consists of the VV3B site (205 acres) and the Segment 4C rail alignment north of I-15 in the Mountain Pass area (176 acres). Segment 4A would greatly reduce the direct effect on grazing lands because it would avoid impacts to grazing lands in the Mountain Pass area by following the existing I-15 freeway ROW rather than traversing a grazing allotment."

So part of the cost for XW is land and property acquisition. Most of it will be desert or grazing lands, so it will be far cheaper than, for example. the cost of land acquisition and eminent domain for a HSR corridor in the northeast or for much of the CA HSR route.


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## Andrew (Sep 25, 2015)

Senator's Schumer's speech on ways to fund Gateway:

https://wagner.nyu.edu/rudincenter/2015/08/senator-schumers-speech-at-the-rudin-center/


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## leemell (Sep 25, 2015)

I haven't looked, but I do remember most of the land is on BLM property not necessitate its purchase.


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## Andrew (Sep 27, 2015)

If Congress does allow NEC profits do be reinvested into Amtrak's Northeast Corridor, why can't Amtrak put those profits into Gateway?


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## jis (Sep 27, 2015)

Because that money is not even enough to maintain NEC in state of good repair. There will be no surplus of any kind of Amtrak is unable to run trains reliably on the NEC while the tunnel is built. That is why large sums of money from outside of NEC operating surpluses need to be found. People who claim that NEC surpluses are not needed to maintain NEC and can be used for building new infrastructure need to get better connected at reality and get better at simple arithmetic.


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## Andrew (Sep 27, 2015)

jis said:


> Because that money is not even enough to maintain NEC in state of good repair. There will be no surplus of any kind of Amtrak is unable to run trains reliably on the NEC while the tunnel is built. That is why large sums of money from outside of NEC operating surpluses need to be found. People who claim that NEC surpluses are not needed to maintain NEC and can be used for building new infrastructure need to get better connected at reality and get better at simple arithmetic.


So, if a "Gateway Development Corporation" does happen, senators have talked about New Starts money and CMAQ funds being put into Gateway--just like they were for ARC. What do you make of that?

Also, could Congress allocate money that is not part of the New Starts money and CMAQ funds into Gateway? I am just trying to get a sense of how the Federal government could pick up half of the funding for the Gateway Project.


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## neroden (Sep 28, 2015)

leemell said:


> You know that Xpresswest does not need eminent domain as they already have approval to used the I15 corridor for their tracks and infrastructure.


They have to divert from it in at least three places; both ends and one mountain-climbing section. I'm not expecting any of those places to be *problems*, exactly, but...


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## Andrew (Oct 2, 2015)

Another article on updated information regarding the Gateway Project:

http://www.nytimes.com/2015/10/02/nyregion/early-planning-for-new-hudson-rail-tunnel-is-underway-us-transportation-secretary-says.html?_r=0


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## Andrew (Oct 9, 2015)

Video update on Gateway:

http://www.nj.com/traffic/index.ssf/2015/10/nj_transit_to_lead_hudson_tunnel_environmental_stu.html


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