PROVIDENCE — James R. Capaldi, who has played a major role in launching and directing the biggest highway and bridge construction program in the state’s recent history, said yesterday that he will retire this month as the director of the state Department of Transportation.

Capaldi, who just turned 60, helped fuel the extraordinary burst of construction, particularly visible in Providence, by pushing a new-to-Rhode Island — some said risky — financing mechanism that made hundreds of millions of dollars available to the state government through borrowing.

Unlike his predecessor, William Ankner, an outsider who had worked for the U.S. Department of Transportation and state transportation agencies in Delaware and New Jersey before coming to Rhode Island, Capaldi came up through the ranks at the DOT. He was the DOT’s chief engineer, or second in command, when he became one of Governor Carcieri’s first major appointments, in January 2003.

Capaldi has presided over two of the DOT’s more dramatic performances, the explosive demolition of the Jamestown Bridge, spread over several months this year, and the towing of the new Providence River Bridge arch up Narragansett Bay on barges in August.

He has also endured some embarrassments — seemingly endless delays on projects, including the Point Street overpass over Route 95 in Providence and the replacement of the Barrington River Bridge in Barrington, and expensive settlements with contractors because of design problems — but nothing that derailed the main construction program.

He developed a working relationship with the state’s environmental advocates, meeting regularly with an interest group not often happy with road-building transportation officials. Barry Schiller, the Sierra Club’s transportation chairman, said that the environmental community appreciates Capaldi’s reaching out to them and wishes him well.

Schiller complimented Capaldi’s efforts to expand the state’s commuter rail system. “It’s been talked about for a really long time,” Schiller said, “and he’s making it happen.”

Yesterday, Carcieri called Capaldi “an outstanding director” and said that the state’s transportation system “has never looked better.”

Along with rail service, Capaldi has continued the expansion of another kind of non-road transportation system, the network of bike paths. Capaldi said he has actively pursued non-road projects partly because traffic density keeps rising and widening the state’s highways to accommodate it simply isn’t in the cards.

But Capaldi’s biggest impact on the state’s transportation system came early in his tenure, and it had to do with money.

As Carcieri and Capaldi took their new jobs, the state was in a serious jam. It had a list of projects it needed to build, particularly to replace numerous crumbling bridges, and not enough money to build them. Not wanting to borrow to replace the rusting Sakonnet River Bridge, Carcieri’s predecessor, Gov. Lincoln Almond, leaned toward financing the bridge with tolls but was blocked by the General Assembly. And in Providence, the state’s biggest recent construction project, the relocation of a section of Route 195, was getting under way, but there wasn’t enough money to keep that job moving, either.

“We had the projects lined up,” Capaldi said, “but we didn’t have a solution for funding” them.

Almond had considered and rejected a relatively new way of financing bridges and highways, the GARVEE, or Grant Anticipation Revenue Vehicle, created by Congress in 1995 to allow states to borrow money and pay it back from their future federal highway aid.

Capaldi said that when he mentioned the GARVEE approach to Carcieri during his interview for the director’s job, Carcieri hadn’t heard of it. But when Capaldi explained it, he said, Carcieri “understood the process immediately.”

It was a timely suggestion. Along with the Sakonnet River Bridge and Route 195, borrowing through the GARVEE mechanism is also enabling replacement of the Washington Bridge, carrying Route 195 across the Seekonk River, under construction now; construction of a new Route 403 to serve the state industrial park at Quonset Point-Davisville; and a rail improvement project serving both Quonset Point and the commuter rail plan.

With their debt-service costs, the projects are expected to cost nearly $1 billion and will also commit major portions of the state’s federal highway aid. Capaldi argues that it’s worth it because the projects are needed now and because building now avoids future construction cost inflation.

Capaldi has spent his entire career in the DOT, where he started work as an intern in 1965, with one brief excursion to a private consulting company in the late 1980s. His early career was primarily in the agency’s design sections, beginning with road design and eventually supervising the road, bridge and traffic design. He became chief of construction operations in 1989, responsible for administering some 100 road, bridge, traffic, bike path and other construction projects a year, and was promoted through a series of jobs to chief engineer in 1994.

A licensed professional engineer with a degree in engineering from the University of Rhode Island, he said he has intended for some time to start another career as an engineer in the private sector.

He said he started thinking seriously about retiring during the summer, as the approaching end of Carcieri’s first term brought uncertainty about his future at the DOT. Carcieri won reelection, but Capaldi said that age 60 seemed like a good time to “get back to the roots of my career,” in engineering rather than administration. In a few more years, he reckoned, it might be too late to start another career.

Capaldi hasn’t been able to cut the ribbons on many major projects — they’re still being built — but he said that from a public transportation official’s perspective, the biggest steps are securing the funding, getting the project designed and getting the contracts awarded. By that measure, many of the big projects — the Washington Bridge replacement, the Route 195 relocation, Route 403 and the freight rail project — are already well on their way.

With credit for 36 years’ state employment, Capaldi qualifies for an annual pension of $141,490, or 80 percent of his average salary for the past three years, according to the state Retirement Board.