U.S. Department of Transportation Announces $31.4 Million Loan to Upgrade Critical Rail Lines in California

New and Improved Rail Infrastructure Will Enhance Safety and Supply Chain for the Region 

WASHINGTON – The U.S. Department of Transportation (DOT) today announced that its Build America Bureau (Bureau) provided a $31.4 million Railroad Rehabilitation and Improvement Financing (RRIF) loan to the Sierra Northern Railway (SNR) and Mendocino Railway (MRY) to expand and rehabilitate rail infrastructure in the Central Valley and Mendocino County, California. By providing RRIF and Transportation Infrastructure Finance and Innovation Act (TIFIA) loans, the Bureau helps communities expedite infrastructure projects and reduce project costs. 

“USDOT is pleased to support this important project in California that will increase safety, reduce harmful greenhouse gas emissions, and improve freight service benefitting the entire region,” said Deputy Secretary Polly Trottenberg. “The Biden-Harris Administration is committed to investing in clean transportation and enhancing supply chains.”  

The loan finances nearly 100 percent of the planned improvements, including SNR expansion of 6.7 miles of Oakdale Branch track for engine and carriage storage; MRY rehabilitation of Noyo Canyon Tunnel No. 1, 27 bridges and40 miles of track. 

“Sierra’s and Mendocino’s RRIF loan will help modernize the rail line, which will greatly enhance existing freight service and make the railroad more attractive to new freight customers.” said Build America Bureau Executive Director Morteza Farajian, Ph.D. “We are pleased that a short-line railroad has been able to take advantage of our low-interest financing and deliver improvements that might not have been possible otherwise.” 

The project should be complete in 2027 and will provide many benefits to the community, including: 

• Increased safety, operating capacity, efficiency 
• Reduction of derailments and grade-crossing incidents 
• Reduced congestion and air pollution on local roads and highways 

“We appreciate the Bureau and all their hard work helping us with the RRIF loan,” said Sierra Northern Railway President Kennan H. Beard III. “This project will provide the region with new construction jobs and greatly benefit the Central Valley.” 

“The RRIF loan helps enhance our freight and passenger services in Mendocino County by providing additional jobs, improving safety, lowering emissions, and advancing our regional transportation options,” said Mendocino Railway President Robert Jason Pinoli. 

The RRIF program maintains a $7 billion set-aside to support small railroads like SNR and MRY. This is the Bureau’s first loan to a short-line (Class III) railroad since it was created in 2016. In total, DOT has closed $7.6 billion RRIF loans, $39.8 billion in TIFIA financings, supporting more than $143 billion in infrastructure investment across the country. 

For more information and to learn more about the Build America Bureau, please visit the website here. For updates, subscribe to the Bureau newsletter and announcements here.   

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The Build America Bureau advances investment in transportation infrastructure by lending Federal funds to qualified borrowers; clearing roadblocks for credit worthy projects; and encouraging best practices in project planning, financing, delivery, and operations. The Bureau draws on expertise across DOT to serve as a point of coordination for states, municipalities, private partners, and other project sponsors seeking Federal financing and technical assistance.