Skip to Content
Streetsblog USA home
Streetsblog USA home
Log In
Federal Funding

Taxpayers Lose and Banks Win in This Trump Infrastructure Deal

In one year, the cost of the Route 95 Viaduct Reconstruction project in Rhode Island increased more than 50 percent. Photo: Rhode Island DOT

The Trump administration's insistence on paying for infrastructure with private finance risks draining public coffers to pad profits for banks. In fact, a story from Rhode Island suggests that's already happening.

The projected cost of a local highway project -- the Route 95 viaduct -- has ballooned more than 50 percent in a year, the Providence Journal reports. Much of the increase is due to special perks for private lenders that the state hopes will win favor from the Trump DOT.

The Journal's Patrick Anderson reports:

The state last month applied for a $60-million grant from the U.S. Department of Transportation’s [Trump Administration-enacted] “INFRA” program for the reconstruction of the Route 95 Northbound Providence Viaduct, roughly the same project it sought a $59-million grant for a year ago under the Obama administration’s predecessor “FASTLANE” program.

But the estimated cost of the underlying project — replacing the decrepit Route 95 North bridges and interchange in the center of the city while adding new travel lanes — has grown from $226.1 million to $342.9 million, according to the respective grant applications from the Rhode Island Department of Transportation.

A big chunk of that cost increase is connected to financing and the private part of the project. This year’s grant application says the “estimated design-build cost” is $264 million. The new plan then adds interest on a $45-million private loan and a “15-percent return to the private partner.”

Why would Rhode Island spend all that money on private financing when it can borrow directly at a lower rate? There aren't even tolls on this stretch of highway, so there is no projected-related revenue stream to pay back the loan.

Rhode Island DOT spokeswoman Lisbeth Pettengill admitted to the Journal that including the loan will help the agency win a federal grant. She told Anderson:

The new [Trump-era] guidelines encourage states to find private partners and to take more of a role in funding projects. With these guidelines in mind, we redefined the project to fit those new grant requirements.

Private finance deals are often sold as a way to get more infrastructure for the public's money. But as this case demonstrates, they often just funnel more money into bankers' pockets at the public's expense.

Hat tip to former Streetsblog reporter Stephen Miller for catching this story.

Stay in touch

Sign up for our free newsletter

More from Streetsblog USA

Tuesday’s Headlines Turn Up the Heat

Triple-digit heat, fueled by climate change, is warping rail lines, interrupting construction work on transit lines and causing burns on sidewalks.

July 16, 2024

These Are the Most Dangerous Congressional Districts for Pedestrians

The deadliest congressional districts in America are dominated by BIPOC communities — and federal officials need to step up to save the most vulnerable road users.

July 16, 2024

Delivery Worker Minimum Wage Shows Promise … For Some, Data Shows

New data from New York City's Department of Consumer and Worker Protection shows minimum wage is bringing order to a previously wild industry.

July 15, 2024

Monday’s Headlines Go Through Basic Training

An NYU study looks into why the U.S. is lagging behind on high-speed rail, and one transportation expert ponders the impact on growth.

July 15, 2024

Sustainable Transportation Advocates Need to Talk About Sustainable Urban Design

A new book hopes to act as a "magic decoder ring" to our built environment — and a powerful tool to understand how sustainable transportation networks can fit within them.

July 15, 2024
See all posts