U.S. DOT gives short line railroads a shot in the financial arm

Iowa Northern

Short line railroad companies now have an option that will help in the long term. The U.S. DOT announced it is expanding the Railroad Rehabilitation and Improvement Financing Express program (RRIF Express). The changes will cut the time and costs linked to securing loans for projects that modernize aging freight and rail infrastructure.

Here is a look at what will be different:

• Loan amounts will be increased from $50 million to $150 million;
• More types of projects will be eligible for funding;
• The option to finance the loan amount moves from 40 percent to 75 percent; and
• There will be more flexibility in considering different categories of environmental review.

Credit risk premium assistance also has been increased to up to 10 percent of the loan value, with a cap of $5 million per application.

The U.S. DOT says letters of interest will be accepted until the funding runs out. The U.S. DOT’s Build America Bureau will be in charge of the program and will work with the American Short Line and Regional Railroads Association (ASLRRA) to provide educational training and technical assistance for those interested in applying for a loan.

“The ASLRRA and the short line freight railroads we represent are excited about these improvements being rolled out as RRIF Express 2.0. The modifications combine to form a robust and significant improvement to the program and should allow for more short line projects to be presented and selected for funding,” said ASLRRA President Chuck Baker. “These projects will in turn allow short lines to better serve their thousands of shippers and the largely rural and small town communities that they serve with safe, efficient, reliable and environmentally sustainable freight rail service.”

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