Transportation borrowing plan blocked in NY

| 7/26/2005

New York state has stopped handing out transportation contracts in response to the state comptroller’s decision last week to reject a proposed $2.9 billion borrowing – or loan – by the state Thruway Authority for highway and bridge work.

State Transportation Department officials told The Associated Press that Comptroller Alan Hevesi’s action led to the stoppage of $350 million in construction contracts throughout the state. The agency, led by Republican Gov. George Pataki, is also stopping the awarding of $200 million in contracts for rail and other work until the entire transportation plan can be reviewed.

The planned debt refinancing would have earmarked $1.3 billion for the state’s roads and bridges in the next five years by delaying principal payments until 2011.

However, Hevesi warned that under the plan the state would have to spend an additional $1.7 billion during the last 15 years of the bond issue.

Hevesi, a Democrat, denied his action would cause any projects to be delayed or cancelled since the state still has five years to come up with an alternative source of money.

The planned savings was included as part of the five-year, $17.9 billion bridge and road spending plan OK’d by state lawmakers and the governor.