Direct Federal Spending High on Industry’s Infrastructure List

Industry officials, lawmakers also agree on need for Highway Trust Fund fix.

October 14, 2017
Tom Ichniowski

As the construction and transportation industries continue to wait for more specifics from the White House about President Trump’s still-unreleased infrastructure investment plan, some top officials are making clear that they want direct federal funds to be a keystone of the proposal, though acknowledging that public-private partnerships can be helpful in some cases.

Lawmakers and witnesses at a House highways and transit subcommittee hearing on Oct. 11 also said they want the plan to include a remedy for the Highway Trust Fund, which will face another shortfall in 2020 unless it gets a revenue infusion.

Rep. Bill Shuster (R-Pa.), chairman of the full Transportation and Infrastructure Committee, said the panel has been working closely with administration officials on “principles” for the infrastructure plan “And we hope to see that soon coming out of the White House,” Shuster added..

The wait for the plan has been long. There has been little action in the House, too, said Rep. Peter DeFazio (Ore.), the transportation committee’s top Democrat.

He noted that it has been more than nine months since the committee held its first 2017 infrastructure hearing, on Feb. 1 and House lawmakers have only rolled out a few legislative proposals.

DeFazio said that “all we’re doing around here is just talking, while the country crumbles.” He added, “I mean, seriously, let’s get to work.”

DeFazio also called for a strong federal role. He observed that more than 20 states in recent years “have stepped up” by raising revenue, mainly through increases in their own gasoline taxes. But DeFazio said those additional dollars are not enough. “They need a federal partner,” he said.

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Collaborative Development: The Benefits of Public-Private Partnership

A new ILEPI Policy Brief, released this morning, investigates the pros and cons of public-private partnerships in the construction industry.

The report, Collaborative Development: The Pros and Cons of P3s on Construction Projects (PDF), finds that public-private partnerships (P3s)- such as the proposed Illiana Expressway– offer the potential for significant cost savings for the public sector. P3s allow governments to increase internal investment, capitalize on the efficiencies and innovations of private companies, and build infrastructure slightly less expensively and slightly more quickly. For the private sector, P3s provide stable assets (infrastructure facilities) with predictable long-term returns from user fees for portfolio diversification. P3s also allow private entities, backed by the government, to borrow cheaply.

The Policy Brief utilizes case studies to demonstrate how P3s may be mutually beneficial and discusses the expected positive benefits of three potential P3 projects in the Midwest.

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How will a Purple-Line public-private partnership work?

A P3 is a partnership between a government agency (in this case, the Maryland Transit Administration) and a private firm (called a “concessionaire”) to build and operate an infrastructure project. Many P3s are toll roads, like the new Beltway HOT lanes in Northern Virginia. But transit P3 projects are fairly new to the United States. Currently, the only example in the nation is in Denver, which is using one to build almost 70 miles of rail projects.

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