With the Obama administration weeks away from issuing recommendations for how to speed delivery of infrastructure projects and streamline private-sector financing, Vice President Joe Biden is advocating more private investment in infrastructure.
Biden, speaking on Oct. 28 at the North American Strategic Infrastructure Leadership Forum in Washington, D.C., said improving and expanding infrastructure is a critical component in future U.S. job growth, highlighting a need for more public-private partnerships.
“All the government can do is act as a catalyst,” he told the government and industry officials attending the conference. “You are creating the opportunities.”
Biden’s remarks come in advance of a report, due by Nov. 14, from an interagency infrastructure-finance working group tasked with identifying ways to overcome hurdles to private financing and to speed projects to completion.
President Obama’s “Build America Investment Initiative,” which was announced in July, directed Treasury Secretary Jacob Lew and Transportation Secretary Anthony Foxx to form the working group.
Biden singled out a need to upgrade U.S. ports so that they can accommodate New Panamax ships that will be in use after the Panama Canal expansion project completes in 2016.
He said that stepped-up energy-sector activity has helped spur opportunities in manufacturing, adding that even greater expansion could come with improved ports and rail systems. Biden said that jobs in manufacturing "are only going to come home and stay home if we have the most modern infrastructure.”
Citing past U.S. transportation construction feats, such as the transcontinental tailroad and the Erie Canal, Biden said it’s time to write a new chapter: “Build, build, build.”
Norman Anderson, president & CEO of CG/LA Infrastructure, which organized the conference, said that while the Obama administration is calling for “build, build, build,” he hears industry executives saying “plan, plan, plan.”
Anderson says an important theme of the conference, which took place Oct. 28-30, was the need for a “predictable and realistic” infrastructure plan. “We need to think through what we want to accomplish and then figure out the milestone along the way to make that happen,” he said.
Although much of the infrastructure debate is focused on funding, Anderson said, “it’s not a money issue; it’s about having a predictable pipeline of projects.”
He noted that some states have expressed interest in seeing more unsolicited bids for work, but without a strategic vision, private investors are hesitant to put such bids together.
“That proactivity comes from having a plan,” he said. Anderson added that if the federal government and the states "can lay out a plan that says, ‘This is what we want to do and what we want to see in terms of increased infrastructure investment,’ then the private-sector guys know how to get involved in projects.”
Doug Koelemay, director of the Virginia Office of Transportation Public-Private Partnerships, says that while PPPs are an important part of Virginia’s transportation plan, public funding and financing tools drive the process.
Koelemay says that private investment "succeeds best if you have a really strong core, which is the basic funding that the public sector brings—from federal, state and local governments—to infrastructure funding.” He adds. “Trying to substitute [PPPs] for that basic program just isn’t going to work.”
Koelemay says that besides passing long-term transportation bills, the federal government can expand and enhance financing tools such as the TIFIA program, which Virginia has used on PPP projects such as the 495 Express Lanes and 95 Express Lanes projects near Washington, D.C.
“That is a clear example of the federal government establishing tools that helped us put partnerships together more quickly than we otherwise might have been able to do,” he says.