(OSTA) – Sen. Tom Ada has introduced Bill 472-31 (COR), an act that proposes to borrow $75 million for the purpose of funding more improvements to Guam’s highways.
The loan is to be paid by future streams of grants received from the Federal Highway Administration. Guam receives about $18.4 million annually to assist in the planning, design and construction of Guam’s primary highways.
The loan will be issued using a mechanism allowed by federal law, known as a Grant Anticipation Revenue Bond, or GARVEE. A GARVEE bond allows grant recipients to draw down on future grants to enable states to accelerate the completion of engineering designs, right-of-way acquisition, and construction of highways. “The completion of these requirements at today’s cost would yield savings. And it would also allow Guam’s construction industry to keep its workforce actively employed during the pause in the military buildup,” Ada said.
“GEDA (Guam Economic Development Authority) officials have also indicated that borrowing rates for GARVEE bonds are significantly low at this time, thus making it an opportune time for Guam to put the bond forward,” Ada said.
“Improvement of our highways adds to safer motoring,” added Sen. Adolpho Palacios, a co-sponsor of Bill 472-31. Sen. Rory Respicio, also a co-sponsor for the bill, added: “Our highways are important to the economic development of our island.”
GARVEE bonds are limited obligation bonds, meaning although the federal grants are relatively certain, the remote possibility that grants will not be appropriated by Congress is a risk borne by the investors, not GovGuam.
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