WASHINGTON, July 20 |
"While many states and local governments are focusing on these matters, top-down leadership is also needed that includes a vision for the country and common P3 principles," said J. Perry Offutt, managing director at Morgan Stanley & Co, LLC.
Many investors are pension or infrastructure funds that put money into projects around the world. The bank's support, he said, would reassure investors there is political will to complete a project. President Barack Obama has pledged to create a national infrastructure bank since first running for the highest office three years ago. Obama renewed his push with the budget he proposed in February by requesting that Congress put $5 billion a year for six years into establishing a bank.
The 30 largest infrastructure equity funds raised $180 billion over the last five years for projects, Polly Trottenberg, assistant secretary for transportation policy in the Obama Administration, told Wednesday's hearing. She called the infrastructure bank "one of the most promising ideas for leveraging more private-sector dollars.
"Rigorous benefit-cost analysis would focus funding on those projects that produce the greatest long-term public benefits at the lowest cost to the taxpayer," Trottenberg said. "This is achieved, in part, by encouraging private sector participation in projects in order for them to be competitive."
The bank would provide grants, loans and loan guarantees for passenger and freight transportation in urban, suburban and rural areas, Trottenberg said. It would also coordinate and consolidate other federal financing programs. Senator John Kerry told the hearing: "Given the infrastructure demands of the country -- a $2.2 trillion deficit -- even with the infrastructure bank we aren't even close to do doing what we need to do in America."
Kerry introduced legislation to establish a bank that would finance projects of $100 million or more. While Obama envisions putting a newly founded bank under the U.S. Transportation Department, Kerry's bill would make it a separate agency. "That, I think, gives greater comfort to the investor," he said.
The blueprint guiding long-term national transportation spending expired more than two years ago and Congress has relied on extension bills. Of late, the Republican-controlled House and Democrat-controlled Senate have unveiled possible components of a new authorization, floating funding ideas such as relying on state infrastructure banks. The largest source of transportation revenue in the country, the gasoline tax, is chronically short and Obama will not raise it while the economy is shaky.
On Thursday, the Senate's Environment and Public Works hearing will meet in hopes of coming closer to a draft bill that will authorize funding for two years, expand a financing program called TIFIA and consolidate highway programs. (From ASCE Smartbrief-Reporting by Lisa Lambert; Editing by Dan Grebler)
WASHINGTON, July 20 (Reuters) - Establishing a U.S.
"The bank would provide a project with a base of capital that could then attract ... outside private investment," said Robert Dove, managing director of the Carlyle Group, a private global investment firm. For many years, state and local governments have discussed using private-public partnerships known as "P3s" to finance transportation. In a common P3 structure, a private company leases and maintains a road for decades. It collects tolls and receives tax credits for the road's depreciation."While many states and local governments are focusing on these matters, top-down leadership is also needed that includes a vision for the country and common P3 principles," said J. Perry Offutt, managing director at Morgan Stanley & Co, LLC.
Many investors are pension or infrastructure funds that put money into projects around the world. The bank's support, he said, would reassure investors there is political will to complete a project. President Barack Obama has pledged to create a national infrastructure bank since first running for the highest office three years ago. Obama renewed his push with the budget he proposed in February by requesting that Congress put $5 billion a year for six years into establishing a bank.
The 30 largest infrastructure equity funds raised $180 billion over the last five years for projects, Polly Trottenberg, assistant secretary for transportation policy in the Obama Administration, told Wednesday's hearing. She called the infrastructure bank "one of the most promising ideas for leveraging more private-sector dollars.
"Rigorous benefit-cost analysis would focus funding on those projects that produce the greatest long-term public benefits at the lowest cost to the taxpayer," Trottenberg said. "This is achieved, in part, by encouraging private sector participation in projects in order for them to be competitive."
The bank would provide grants, loans and loan guarantees for passenger and freight transportation in urban, suburban and rural areas, Trottenberg said. It would also coordinate and consolidate other federal financing programs. Senator John Kerry told the hearing: "Given the infrastructure demands of the country -- a $2.2 trillion deficit -- even with the infrastructure bank we aren't even close to do doing what we need to do in America."
Kerry introduced legislation to establish a bank that would finance projects of $100 million or more. While Obama envisions putting a newly founded bank under the U.S. Transportation Department, Kerry's bill would make it a separate agency. "That, I think, gives greater comfort to the investor," he said.
The blueprint guiding long-term national transportation spending expired more than two years ago and Congress has relied on extension bills. Of late, the Republican-controlled House and Democrat-controlled Senate have unveiled possible components of a new authorization, floating funding ideas such as relying on state infrastructure banks. The largest source of transportation revenue in the country, the gasoline tax, is chronically short and Obama will not raise it while the economy is shaky.
On Thursday, the Senate's Environment and Public Works hearing will meet in hopes of coming closer to a draft bill that will authorize funding for two years, expand a financing program called TIFIA and consolidate highway programs. (From ASCE Smartbrief-Reporting by Lisa Lambert; Editing by Dan Grebler)
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