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Rail News: Federal Legislation & Regulation

Standard & Poor's: Transportation's 'unpredictable' funding could have 'severe consequences' for economy, safety


With Congress focused on budget-deficit reduction, funding for future transportation projects “may be lower and erratic,” according to a report published yesterday by Standard & Poor’s.

The unpredictability of state and federal funding for transportation projects “can result in severe consequences to the economy and to public safety,” according to the report, titled "Increasingly Unpredictable Federal Funding Could Stall U.S. Transportation Infrastructure Projects."

With a long-term surface transportation bill still uncertain, holdups in reauthorization and/or significant cuts in infrastructure programs are causing delays in some projects and scale-backs in others, Standard & Poor’s officials said in a prepared statement.

“The combination of reduced or unpredictable federal support and lower demand because of the shaky economy could result in entities' deferring maintenance projects that would keep our nation's transportation infrastructure in good repair,” they said. “Such deferrals could hurt an entity's credit if capital costs escalate over time, putting the system at risk. Conversely, proceeding with such projects could also hurt the credit rating if the resulting liquidity and debt levels are not already reflected in the rating.”

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More News from 4/3/2012