DOT Selects $1.2 Billion in Megaproject Awards for FY22 Cycle

Last week, the U.S. Department of Transportation notified Congress that they have selected nine projects to share almost $1.2 billion in “megaproject” funding through the first year’s awards of grants from the new megaprojects program established by the bipartisan infrastructure law (at 49 U.S.C. §6701).

Per subsection (k) of that statute, the Department cannot make a public announcement of grant selections until a 30-day waiting period has passed following Congressional notification (which took place on December 29). But the Members of Congress in whose states and districts the projects are located have been making their own announcements (the $250 million in MEGA funding for the Brent Spence Bridge Corridor, for example, was announced last week by Senator McConnell and others).

The infrastructure law (IIJA) provided $1.0 billion in funding per year over five years for this program, which gets reduced by a $20 million per year oversight takedown. So, Dear Reader, you might ask, “how did they make $1.2 billion of grants with only $980 million in first-year funding?” The answer is that, for one project, they committed $192 million in IIJA appropriations already made which will not become available, legally, until future years.

The projects to which DOT intends to award grants are in the following table:

There is not necessarily anything fiscally irresponsible with DOT committing out-year IIJA advance appropriations – the budget authority has been created and is on the books, and will stay that way unelss Congress were to pass a special law repealing it, which rarely happens. In future cycles, however, a close eye must be kept on DOT to see whether they start announcing intent to commit funds that would require future appropriations after the IIJA money runs out in 2026. That would be fundamentally different.

The MEGA program has a statutory federal share ceiling – a MEGA grant cannot comprise more than 60 percent of the eligible capital costs of a proposed project. This year’s selections run between 9 percent and 58 percent of the proposed project costs.

Total Proposed MEGA
Cost MEGA Grant Share
CA Watsonville-Cruz Corridor, Santa Cruz County 193.6 30.0 15%
IL Chicago Metra UP North Rebuild, Fullerton to Addison 323.1 117.0 36%
KY-OH New I-71/I-75 Bridge, Cincinnati to Covington 2,770.7 250.0 9%
LA I-10 Calcasieu River Bridge 1,532.0 150.0 10%
MS I-10 Widening, Harrison/Hancock Counties 118.8 60.0 51%
NC U.S. 64 Alligator River Bridge, Dare/Tyrrell Counties 289.5 110.0 38%
NY Hudson Yards Concrete Casing, Section 3 610.0 292.1 48%
OK Tulsa I-44/US-75 Interchange 205.8 85.0 41%
PA Roosevelt Blvd (Phila.) 134.7 78.0 58%

This year, DOT combined three different competitive grant program into one grant solicitation – the new MEGA program, the pre-IIJA INFRA program, and the new rural grant program. According to documentation sent to Capitol Hill by DOT, a total of 138 applications were filed for projects that are eligible for the MEGA program. 10 of those were given INFRA grants instead when the FY 2022 round of those projects went out last September.

Of the remaining 128 MEGA applications, the career staff at DOT evaluated them under the terms of the statute. Any project that did not meet the six statutory criteria for a successful grant application, in the staff’s view, was rated Not Recommended. The rest were graded as either Recommended or Highly Recommended (except for three projects which met all six statutory requirements but still got a Not Recommended grade – Contra Costa County 680 Forward, Long Beach Pier B Rail Program Buildout, and Oregon I-205 Improvements, Phase 2).

Out of the 128 applicants, just 16 got the Highly Recommended nod. Those include the nine selectees, above, and the following seven, which have to be considered front-runners for the FY 2023 MEGA selection process:

MEGA Projects Given A “Highly Recommended’ Rating But Not Given a Grant, FY 2022 Cycle
AK Tustumena Replacement Vessel
CA San Dieguito Double Track/Bridge Replacement
IA IA 9 Over the Mississippi River, Lansing
MA North Station Draw 1 Bridge Replacement
NY Arthur Kill Terminal
PA Eastern Pittsburgh Multimodal Corridor Project
VA I-64 Widening Project

Then there were a total of 13 out of the 128 applicants who got the less desirable, but still acceptable, “Recommended” rating.

MEGA Projects Given A “Recommended’ Rating But Not Given a Grant, FY 2022 Cycle
AZ I-10 GRIC Corridor Gap
CA I-10 Corridor Freight-Managed Lane Project
IA I-380 and Wright Brothers Blvd Interchange
MT Mineral County I-90 Improvements
NC I-94 State of Good Repair
ND Interstate Cross-Median Crash Elimination
NE I-80 Reconstruction and Expansion
OK I-35 Corridor Improvements
RI I-95 Missing Move and Ramps to Quonset BP
TN I-240 Airways Boulevard
TX I-30 Canyon Project
UT O=15 South Iron County Project
VA Route 123 a I-95 Corridor Improvements

All the other applicants were cited for being insufficient in some way to meet the legal requirements for the law. The most-cited failure was that the application did not demonstrate that the project would be cost-effective.

Some very large and famous applications were ruled insufficient and given “Not Recommended” labels in this cycle, including the California High-Speed Rail Project, the Mobile Bay Bridge, and the Hudson River Tunnel (though the concrete casing on the New Jersey side, technically a separate project, got a grant). Some of those may be fixed in subsequent cycles (the lack of a data collection and analysis plan seems easy to fix, and non-federal sponsors can always build or buy more technical capacity). But if the lack of cost-effectiveness is fundamental to the project, it’s hard to see how that gets overcome.

Major MEGA Grant Applicants Not Recommended for Funding Because Statutory Program Requirements Have Not Been Met
Total MEGA Statutory
Project Grant Requirements
State Project Cost Request Not Met
AL I-10 Mobile Bay Bridge 2,706.0 500.0 C, D E
CA High-Speed Rail Inaugural Operating Service 1,741.0 1,045.0 C
CA West Santa Ana Branch Transit Corridor 6,340.4 400.0 C, D E
CA Santa Barbara U.S. 101 Corridor Improvements 1,068.8 256.0 C, D, E, DP
MA I-90 Realignment 1,985.1 1,161.1 C, D E
MA Broome & Sagamore Bridge Replacement 3,976.0 1,113.3 D, E
NC Triangle Expressway Southeast Extension 1,063.4 100.0 C, DP
NJ-NY Hudson Tunnel Project 14,082.9 896.8 C, D E
NY I-81 Viaduct 2,250.0 225.0 C
OR Coos Bay Intermodal Port 1,772.6 1,240.8 C, E
PA I-83 South Bridge Replacement 1,068.0 500.0 B, C, D, E, DP
PA Turnpike/I-95 Interchange 1,523.0 1,252.3 C, DP
TX Port of Houston GULFSTAR Freight Network 1,177.5 706.5 C, DP
VA New Long Bridge Rail Capacity Expansion 2,012.2 300.0 C, DP
Key Statutory Requirements of MEGA Program
A. Project is likely to generate national or regional economic, mobility, or safety benefits.
B. Project is in need of significant federal funding.
C. Project will be cost-effective.
D. Has 1 or more stable, dependable sources of non-federal funding and financing to construct, operate, and maintain the project, and cover any cost increases.
E. Has or will have sufficient legal, financial, and technical capacity to carry out project.
DP. Applicant submitted a data collection and analysis plan that meets statutory requirements.

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