DOT, Treasury Praise Public-Private Deals to Help Fund Large Transportation Projects
This story appears in the Sept. 15 print edition of Transport Topics.
WASHINGTON — Transportation Secretary Anthony Foxx told federal and state officials who met with Wall Street financiers at the Treasury Department on Sept. 9 to look for ways to access private financing for large-scale transportation projects.
At a summit Foxx hosted with Treasury Secretary Jack Lew to highlight tax incentives that should be available for investors looking to back transportation programs, the Cabinet chiefs noted that funding for infrastructure has been insufficient at the federal level for several years.
The transportation community must be set on “continuing to work with our state and local partners to create more tools in the toolbox that create opportunities, availability payments, user fees, other arrangements that make it more possible for us to tap the enormous potential of the private market to help us solve this problem,” Foxx said.
But to realize the potential of private capital and boost the confidence of state and local transportation planners, Congress needs to advance the “foundational element” — a long-term transportation bill, Foxx added.
In July, transportation leaders on Capitol Hill advanced a short-term transportation bill with the promise that they would craft a multiyear measure in the spring.
At the conference, officials also examined public-private infrastructure projects, or P3s, around the country and internationally. P3s are useful in developing transit and rail projects that ease congestion and help companies accelerate their distribution of freight. P3 road projects have consisted of toll roads to cover the cost of construction.
Expanding the use of tolls is a position the trucking industry opposes. But Patrick Jones, executive director and CEO of the International Bridge, Tunnel and Turnpike Association, said: “Now is the time to incorporate new and innovative ways to fund our nation’s transportation infrastructure. Tolling is a proven and effective tool to fund and finance more than 5,000 miles of roads, bridges and tunnels in 35 states.”
In its 2013 study, the American Society of Civil Engineers projected that about $3.6 trillion in total investment by 2020 is required to upgrade the country’s infrastructure to good standing. In that study, ASCE assigned a D+ grade to the country’s overall infrastructure.
At the event, Lew released a report, “Expanding Our Nation’s Infrastructure Through Innovative Financing,” which outlined several benefits of relying on private capital to pay for infrastructure projects. One of the benefits highlighted was the access to outside consultants in designing and building a project.
“We have a problem. We know the solution. And the solution involves all of us doing some pretty commonsense things together,” Lew said.
“There is no question we need to make infrastructure investments a priority. Other nations understand this, and China and countries across Europe are making the kind of investments that we keep putting off,” he added. “They recognize that CEOs want to locate their operations in places where workers can get to their jobs easily, where goods can be shipped efficiently, and where power is dependable.”
