This Week in Infrastructure: Highway Trust Fund Gets Media Attention
April 18th, 2014 | By: Becky Moylan
On a typical day, a Google news search for the Highway Trust Fund over the past 24 hours results in a page or two of results. But this week Wednesday, the search query garnered nine pages of hits, and the option to “explore in depth” 166 articles. What did these articles say? And why does it matter? Well, the articles report what those following closely already knew: Congress is giving states the transportation blues. Less reported, while perhaps more newsworthy for the people who specifically seek out the Highway Trust Fund in the news, the USDOT announced its latest projections on when the money will run short, currently predicted as the end of July. This latest warning comes as Transportation Secretary Foxx bus tours across eight states, raising awareness of what he refers to as “clearly a crisis.” Several states progressed with transportation project legislation this week including Connecticut, Massachusetts and Virginia, but without reliable funding for the Highway Trust Fund, it’s unclear how realistic these proposals are. Many cities are considering public-private partnerships (P3s) as an alternative. As the president emeritus of Harvard wrote this week “now is the time” to find the funding and rebuild our nation’s infrastructure. A great first step to do that is to fix the Trust Fund.Tags: congress, highway trust fund, infrastructure, P3
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This Week in Infrastructure: Reasons to Keep Advocating for Investment
April 11th, 2014 | By: Becky Moylan
The Opinion Pages of The New York Times presented a series of reasons “We Should Be in a Rage” and among them were—you guessed it—because of the state of our nation’s infrastructure. These grievances, along with suggestions and productive dialogue to change it, appeared in print across the country this week. In Mississippi, one writer named legislators’ neglect as the reason for low grades, and given that the state legislature once again passed on increasing the state gas tax, the frustration is understandable. For, as the Mayor of San Diego demonstrated, improving infrastructure takes time and money. Infrastructure provides a better quality of life, and as the decision-makers continue to appreciate its significance, new ideas for funding are being implemented. The desire to have long-term plans is also a promising development, especially as it could help combat the issues many states—including Oregon and Wisconsin—are currently facing. The watershed law Pennsylvania enacted last fall is proving the value of a strong transportation bill. Such legislation is unfortunately still often only discussed and debated and not enacted, including this week in Illinois and Indiana. New transportation legislation is also currently just a goal at the federal level. However, on Thursday Sen. Boxer and fellow senators announced the Environment and Public Works Committee’s commitment to a six-year bill to replace MAP-21, the current law authorizing the Highway Trust Fund. While only the start of a long process, this at least means state DOTs can rest a little easier, and continue with transportation projects and the jobs that come with them.Tags: congress, highway trust fund, infrastructure, MAP-21, P3
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Congress Looks to Learn Lessons from Canada’s P3 Experience
April 10th, 2014 | By: Infrastructure Report Card
This week the House Transportation and Infrastructure Committee looked to our northern neighbor Canada for advice on the federal role for public-private partnerships (P3) holding a panel hearing on the International Experience with Public-Private Partnerships, chaired by U.S. Rep. John Duncan (R-TN). Experts from the Canadian financing market were brought in to share their perspective on how their 200+ P3 projects have gone and what they consider to be the best practices of their federal and state framework. Kicking off the discussion, however, was Rep. John Delaney (MD-06) who is sponsoring a bipartisan bill that is gaining support – The Partnership to Build America Act (H.R. 2084) relating directly to P3s. The Partnership to Build America Act would create an infrastructure fund using repatriated corporate earnings and then utilize financing tools like public-private partnerships. The bill has gained the support of 60 House co-sponsors (30 Republicans and 30 Democrats) in the House and a companion, bipartisan Senate bill by Senators Michael Bennet (D-CO) and Roy Blunt (R-MO). If this were passed, it’s estimated that at least 25% of the projects financed with the new fund would use a P3 model. The panel of expert witnesses had many suggestions for what made the Canadian model successful for structuring P3s. However, it was Dr. Larry Blain, Chairman of the Board of Directors, Partnerships British Columbia, who suggested the following four benefits of performance-based infrastructure that should inform the U.S. structure:- Planning discipline and preparation. Performance-based infrastructure projects require comprehensive and long-term definition, costing and risk assessment. Many pitfalls are avoided before a shovel hits the ground.
- Certainty. Projects are on or under budget, and on or ahead of schedule, and key risks are assumed by the private partners. This is a key benefit of performance-based, financially-motivated contracting.
- Life-cycle asset management. In a performance-based approach the private partners have to maintain and rehabilitate the asset over 15-30 years, and they have to leave the asset in the required condition or face financial penalties.
- Efficiencies and innovation. Competition and the profit motive can lead to startling results, where the winning proposal provides solutions that the public owner never contemplated.
Tags: Canada, congress, Delaney, hearing, House, infrastructure, P3, public-private partnership
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Meet IP3, the New P3 Where Citizens Are the Owners
December 19th, 2013 | By: Infrastructure Report Card
If you follow the infrastructure financing debate about how America is going to fund our future infrastructure needs, you have probably heard the term P3 or public-private partnership discussed as an innovative financing structure to utilize private investment in public infrastructure. However, with the release of the American Enterprise Institute’s new report, Road Pricing and Asset Publicization,” there is a new angle for the debate – the investment public-private partnership (IP3).
So what exactly is this IP3? Here’s how the report’s authors explain it: “The IP3 recognizes that you not the federal government or a private company—own roads that have already been built. And it offers you an annual payment for investing in them…. Under an IP3, a private company pays a public partner (like a state) a large upfront cash payment (called a concession) for the right to operate and collect toll revenue from an existing road network for a certain period of time. The IP3 locks away most of that concession payment—and most of the toll revenue—in a protected investment fund that pays an annual dividend to all households in the newly priced region. That helps offset the additional costs they will face from tolls, while recognizing that citizens are the true owners of the roads.”
America’s roads are definitely in need of repair so the more new ideas that are debated that’s all the better including P3s, gas tax changes and fixes, and all the others. While P3s are only one potential solution among the many, one thing is for certain – it’s time to start debating before the Highway Trust Fund is broke and many states lose half of their highway and bridge funding.
Tags: bridges, infrastructure, infrastructure report card, P3, roads, surface transportation, transportation
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