First round of BUILD grants is overly positive for freight transportation infrastructure

Freight transportation-related infrastructure projects were front and center this week in regards to funding awarded by the United States Department of Transportation (DOT) for the first round of the fiscal year 2018 Better Utilizing Investments to Leverage Development (BUILD) discretionary grant program.

As previously noted in this space, BUILD is the successor to the Transportation Investment Generating Economic Recovery (TIGER) grant program. TIGER was established under the Obama administration in 2009. And it largely delivered, providing around $5.5 billion to 421 projects in all 50 states, the District of Columbia, Puerto Rico, Guam, the Virgin Islands and tribal communities. These federal funds leverage money from private sector partners, states, local governments, metropolitan planning organizations and transit agencies. Funding for TIGER grants ensured that economic funding is made available for transportation infrastructure projects, specifically road, rail transit, and port, and that project spending is monitored and transparent.

But last April, the DOT issued a Notice of Funding Opportunity to apply for $1.5 billion in discretionary funding through the BUILD program. Funding for BUILD comes from the Consolidated Appropriations Act of 2018, which has made available $1.5 billion for National Infrastructure Investments through September 30, 2020.  For the initial round of BUILD Transportation grants, DOT said the maximum grant award is $25 million, and no more than $150 million can be awarded to a single State, as specified in the FY 2018 Appropriations Act. It also noted that at least 30% of funds must be awarded to projects located in rural areas. 

Well, this week DOT said that a total of 91 projects are set to receive BUILD grant funding for fiscal year 2018, with the amount of applicants asking for a collective $10.9 billion in funding, far outweighing the $1.5 billion available. Put another way, there were $7.26 in funding requests per each $1 actually available. This clearly speaks to the high level of demand for these dollars, to say the least.

And looking at the data from the Washington, D.C.-based Coalition for America’s Gateways and Trade Corridors (CAGTC), freight-related projects were the big winner in round one of BUILD grants.

Just how big of a winner was it? CAGTC reported that of the $1.5 billion available, freight projects, or projects with a freight component, received around $977 million, or 66%, of total BUILD dollars, with non-highway projects receiving around 20% of total funds. What’s more, CAGTC noted that this round of funding sets a new high level for the percentage of funding awarded to freight infrastructure, topping 2018’s TIGER funding, which saw 56% of total funds allocated for goods movement infrastructure.

“Competitive grant programs provide a funding opportunity for projects that are difficult to fund or do not qualify through traditional funding programs due to their complexity, size, or cost,” said Elaine Nessle, executive director of the Coalition for America’s Gateways and Trade Corridors (CAGTC), in a statement. “These programs, such as BUILD, provide an invaluable tool for critical freight infrastructure projects, which are often large in scale, crossing multiple jurisdictions and modes. We applaud Congress’ recognition of these important programs by significantly increasing the program’s funding in FY18 and USDOT’s commitment to making vital freight investments.”

As impressive as this most recent round of funding is, CAGTC noted that this output is really a continuation of the success that began with TIGER, given that 49% of available funds through the first ten rounds of TIGER, and now, BUILD, programs have been doled out to goods movement-related infrastructure projects to the tune of roughly $3.5 billion. And it added that this tally has, in turn, resulted in a total investment of $12.6 billion. CAGTC said this represents the fact that freight projects under the purview of BUILD, and before that TIGER, has garnered 72% of funding from other sources.

When news about BUILD first came out earlier this year, CAGTC’s Nessle told me that the tripling the available grant funding was a win-win, in that the TIGER program was significantly oversubscribed, with BUILD getting things closer in line to what the needs actually look like across the freight transportation spectrum.  

“We are interested in the freight system and the systems of systems the supply chains rely on are these comprehensive networks and systems where every single piece needs to work, whether that piece of infrastructure is located in a rural or urban area,” she said.

While the TIGER may not longer be roaring in the form of freight transportation grant funding, its legacy will likely be fondly remembered with something to firmly BUILD on in the coming years.