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Obama Moves to Support Private Infrastructure Investment

July 17, 2014

By Oliver Patton

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The administration's Build America Transportation Investment Center offers a case study on how Kentucky and Indiana teamed up to launch the Ohio River Bridges project.
The administration's Build America Transportation Investment Center offers a case study on how Kentucky and Indiana teamed up to launch the Ohio River Bridges project.

As Congress struggles to preserve the Highway Trust Fund this summer and eventually pass a long-term highway bill, President Obama is using his executive authority to promote increased private investment in infrastructure.

In remarks Thursday at the Port of Wilmington, Del., Obama announced a plan to help states and local governments use alternative financing for their infrastructure needs.

The key component of the Build America Investment Initiative is an Investment Center at the Department of Transportation that will be a one-stop shop for governments and private investors, the White House said.

It will include a “Navigator Service” to give advice on DOT credit programs such as the Transportation Infrastructure Finance and Innovation Act, and offer resources for investors interested in public private partnerships.

Experts say that PPPs, as they are called for short, are useful financing tools but are not a substitute for a long-term, sustainable funding source such as the federal fuel tax. Moreover, PPPs require careful risk analysis and management if they are to succeed.

The DOT Investment Center will share best practices from states that have the most experience with these methods.

The administration said that the top six states for PPPs have almost two-thirds of all the value of U.S. PPP projects, and 20 states have no such projects at all.

Other features of the administration’s plan are an Infrastructure Investment Summit planned for September 9 in Washington, D.C., and an interagency working group to help expand private financing to the infrastructure needs of ports, municipal water systems, broadband and the electrical grid.

Obama’s executive action comes against the backdrop of the Congressional effort to pass a stopgap funding measure to forestall the insolvency of the Highway Trust Fund.

The White House supports a House bill that uses pension changes, customs fees and a transfer from an underground storage tank fund to offset $10.6 billion in general revenues to keep the Fund going until next May. The Senate is supposed to choose between this measure and alternative proposals next week.

Sen. Tom Carper, D-Del., a strong supporter of raising the fuel tax to fund highway reinvestment, applauded Obama’s move.

“While Congress needs to step up to the plate and make sure the federal government is doing its part, it will take an all-hands-on-deck effort to strengthen our nation’s infrastructure,” Carper said in a statement.

“Private sector companies can play a pivotal role in many types of projects, and the president’s initiative will make it easier and more appealing for them to do so.”

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