My partner Bob Shuster and I recently attended the annual P3 Infrastructure Forum in NYC. Organized by InfraAmericas, it brings public and private players in the P3 space together for a couple of days to discuss the status of the industry, trends and best practices. It also provided solid networking opportunities.
The highlight for us was the Keynote Address on Day One by Maryland Congressman John Delaney. His speech was dynamic, engaging and thoughtful. He is well-informed on the issues of the country’s under-investment in infrastructure for many decades.
Rep. Delaney’s session was titled “Incentivizing Private Investment In Infrastructure” and centered on his proposed bill called the Partnerships to Build America Act. The bill has several key components at its core: (1) creating a $50 billion infrastructure fund through the sale of public bonds at very low interest rates (he mentioned 1 percent); and (2), incentivizing U.S. companies to purchase these bonds by allowing them to repatriate some of their overseas earnings tax-free. Rep. Delaney believes the $50 billion fund, which he calls the American Infrastructure Fund (“AIF”), could be leveraged to create up to $750 billion for loans or guarantees. The fund would then loan its proceeds for infrastructure projects, including P3s, and would require at least 20 percent of the project’s financing to come from private capital.
The benefits of the Act are obvious: investment in infrastructure, providing a mechanism to bring foreign investment back home with no tax consequences to corporations, and job creation, which he projected in the tens of thousands. Moreover, there would be zero federal appropriations necessary to the AIF. Rep. Delaney touted the bi-partisan support for the bill in the House – 63 co-sponsors with 32 Rs and 31 Ds.
However, there is a problem. As it is currently drafted, the Delaney bill allows investments beyond roads, bridges, airports, rail and water systems. P3 partnerships for energy, communication and educational facilities are also written into the language of the bill. This dilutes the legislation’s impact to address our serious transportation infrastructure deficiencies and likely loses the support of those who are focused on addressing the country’s deteriorating transportation infrastructure. Broadening the scope of the legislation to include education limits its support across the political spectrum. Education is an area where the role of the federal government is more controversial and may ultimately cause the bill’s failure to achieve broad consensus in the House.
InfraAmerica is to be commended for a productive conference that connected people from all over the world interested in USP3 Infrastructure development. We saw old friends and met new ones with whom we look forward to being actively engaged as the future of P3 policy initiatives continue to unfold.