Transportation's Next Chapter: Maintenance, Mobility, Money
Nossaman Partners Patrick Harder and Geoffrey Yarema were quoted in the Engineering News-Record (ENR) article "Transportation's Next Chapter: Maintenance, Mobility, Money," about the future of infrastructure needs and funding in the US. The article notes that states and local municipalities are embracing public-private partnerships, as well as alternative delivery mechanisms, such as design-build and construction management-at-risk, to complete needed upgrades to aging infrastructure.
MAP-21 legislation expanded the Transportation Infrastructure Finance and Innovation Act (TIFIA) loan program to $1 billion from 2013 to 2014.
Mr. Yarema noted, "One concern is that Congress might think TIFIA is too big because not all of the funds have been obligated. It's important that Congress understand the demand for the program outstrips the program size, even with the huge increase." That possibility "would be horrible," he added.
But even more crucial are the Private Activity Bonds (PABs), which became available under a demonstration program in 2005.
"The ramp-up of the use didn't take place as quickly as we'd thought, largely because of the capital markets crisis," said Mr. Yarema. He continued, "We predict that by 2015, the $15 billion cap will be hit. What happens then? If you look at the success story of P3s since 2005, one of the biggest commonalities is the utilization of PABS. Without them, we're very concerned. It would be a huge reversal of a trend that is gaining significant approval."
Mr. Harder noted that more agencies are getting into the idea of availability payments. "More agencies are looking at that structure to keep control of things that are politically sensitive, like toll pricing," he said, citing Florida's I-595 project. "The other thing is the value of certainty of maintenance."