Billion Lending Program to Help California’s Supply Chain Infrastructure

WASHINGTON – The Department of Transportation will partner with California to provide billions in loans to bolster the state’s overwhelmed ports and supply chain infrastructure, in a bid to prevent a repeat of bottlenecks in ‘bottlenecks that crippled the flow of goods to and from the United States. United States, officials said Thursday.

Most projects are likely to take years to be funded and completed, a spokesperson for the department said, so the initiative will provide little relief from the current supply chain crisis in the region. world. But with potentially more than $ 5 billion in loans on offer, officials say the investment is a necessary step to bolster the state’s aging infrastructure.

The loans could be used to modernize ports, expand rail freight capacity, increase warehouse storage and improve highways to reduce truck travel times. The Department of Transportation will provide some of the loan money through its own programs, while also working with the California State Transportation Agency to identify other funding opportunities.

Arrears of ships in ports and shortages of shipping containers, truck drivers and warehouse workers have compounded delivery delays and rising prices that began when coronavirus outbreaks closed factories in the region. world even as the demand for goods increased. The Biden administration this month decided to almost double the hours of operation of the Port of Los Angeles, moving to a 24/7 operation.

“Our supply chains are under strain, with unprecedented consumer demand and disruption from a pandemic combining with the results of decades of underinvestment in our infrastructure,” said Pete Buttigieg , the secretary of transport, in a press release. “Today’s announcement marks an innovative partnership with California that will help modernize our infrastructure, address climate change, accelerate the flow of goods and grow our economy.

The announcement comes as President Biden and lawmakers try to push Congress through their own major infrastructure plan, which includes funds for ports and other transportation initiatives. Progressive House lawmakers have resisted lending their support to the bipartisan infrastructure bill as leverage as negotiations continue on a separate $ 1.85 trillion economic and environmental bill.

David S. Kim, secretary of the California State Transportation Agency, said it was the first time California has worked with the federal government to issue loans for infrastructure projects on such a scale.

“Our supply chain infrastructure is outdated,” said Mr. Kim. “Now is the time to modernize it and prepare our system for what will be tremendous growth and demand for years to come. “

The partnership comes after Governor Gavin Newsom of California signed a Executive Decree last week, asking state agencies to identify longer-term solutions to reduce congestion at California ports, which he said were “key” to the nation’s supply chain. Mr Newsom said the new deal would help speed up upgrades to the state’s infrastructure system.

“This innovative partnership between the federal government and the state will help us accelerate projects that will make our ports and infrastructure even more efficient,” Newsom said in a statement.

California’s budget this year includes $ 250 million for ports, $ 280 million for infrastructure projects in and around the Port of Oakland, and $ 1.3 billion over three years for trucks, zero-emission transit buses and school buses, including the deployment of more than 1,000 zero-emission port dump trucks.

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