The U.S. DOT is responsible for the oversight and credit monitoring of all transportation projects assisted with TIFIA funds. Formal guidance for this oversight and monitoring has been developed by the TIFIA Joint Program Office (JPO), in collaboration with U.S. DOT modal agencies. In developing this guidance, the TIFIA JPO conducted extensive outreach to U.S. DOT field offices, credit rating agencies, and bond insurers.

Development of the TIFIA project oversight and credit monitoring guidance was based on the following principles:

Develop an integrated process that is seamless for project sponsors and U.S. DOT field offices;

Rely on existing modal oversight processes to the maximum extent possible, augmented to manage TIFIA credit risks;

Piggyback on credit reports, independent engineers’ reports, and other market-based requirements; and

Ensure compliance with the requirements of the Federal Credit Reform Act, Office of Management and Budget guidance and laws, and prudent financial and operational practices.

The goal for TIFIA project oversight and credit monitoring is to protect the Federal interest by managing risks to project delivery and loan repayment. TIFIA project oversight and credit monitoring encompasses the entire life cycle of a project, from execution of the credit agreement through the final maturity of the credit instrument.

Following execution of the credit agreement for a TIFIA-assisted project, the U.S. DOT will initiate the formal project oversight and credit monitoring process. The process integrates existing operating administration procedures, such as FHWA’s and the Federal Transit Administration’s (FTA) major project oversight requirements, into a comprehensive framework that ensures effective and efficient oversight.

The TIFIA project oversight and credit monitoring process encompasses the following elements:

o Formal Oversight Team for each TIFIA project;

o Comprehensive monitoring and reporting requirements in each TIFIA credit agreement;

o Modal oversight procedures appropriate for the project;

o Development of a tailored oversight and monitoring plan for each project with the level of oversight related to the risk profile for the project;

o Annual review and acceptance of an updated financial plan;

o Regular project status report;

o Annual surveillance report;

o Periodic status meetings with project sponsor, site visits, and project inspections;

o Review of engineering reports and credit market surveillance reports; and

o Review of project management and operating plans.

The central element of this process is the Project Oversight and Credit Monitoring Plan, which serves as the management tool for each project. The plan is tailored to meet the specific oversight and monitoring requirements for the project, based on the project’s risk profile and modal agency requirements.

The Oversight Team is responsible for developing this plan prior to the execution of the TIFIA credit agreement. In developing the tailored TIFIA project oversight and credit monitoring plans, each Oversight Team will identify risks specific to the given project and establish the appropriate measures to ensure effective monitoring to manage those risks. In assessing the risks, the team will consider, but not be limited to, rating agency/bond insurer reports, traffic and revenue studies, independent engineer’s project evaluation, project management plan, funding controls established by the project sponsor, and the adequacy of contingencies for schedule and budget. Each plan will be updated, as needed, to address any changes in the project’s credit status.

The TIFIA project oversight and credit monitoring process is a cooperative and systematic effort between the TIFIA JPO and the modal agencies intended to proactively manage construction and credit risk. Open and timely communication among all participants will be critical to the effectiveness of the monitoring process. Through the team approach, the U.S. DOT will be able to direct resources cost-effectively and enhance the communication of information on the status of TIFIA projects. The team will measure its success by a standard of no surprises.

The TIFIA project oversight and credit monitoring guidance will be available on the TIFIA web site in spring 2003.