House to Study Greater Use of P3s
Thursday, January 23, 2014
The House Committee on Transportation and Infrastructure
recently formed a panel to examine the use of P3s across all modes of
transportation, economic development, public buildings, water and maritime
infrastructure and equipment. The panel
will conduct a series of roundtable discussions with industry groups and
leaders of state and local government to determine how the private sector can
increase infrastructure investment in the U.S. The panel is charged to explore three primary
issues: 1) the role that P3s currently play in the delivery of transportation
and infrastructure projects in the U.S; 2) whether P3s enhance the delivery and
management of such projects beyond the capability of government agencies or the
private sector acting independently; and 3) how to balance the needs of the
public and private sectors in implementing P3s.
The panel has no legislative jurisdiction, but likely will issue a
report to the Transportation Committee at the end of its six-month tenure,
which begins on February 11, with the panel’s first roundtable session. A
copy of the charge to the panel is attached, which includes a list of panel
The P3 panel was formed just as the House Transportation
Committee kicked off the process of drafting a new surface transportation bill
to replace the current law, which expires on September 30. In the last reauthorization two years ago,
Congress expanded the lending authority of the Transportation Infrastructure
Finance and Innovation Act (TIFIA).
TIFIA uses federal funding to leverage state and local funding and
private investment in providing secured loans, loan guarantees and letters of
credit to get transportation projects completed. The federal government can provide better
interest rates and longer repayment times than would otherwise be available to
state and local construction projects being funded on a pay as you go basis
from revenue streams that are uncertain.
The U.S Department of Transportation (DOT) used its expanded
authority to create the intended surge in low-interest long term loans to fund
transportation projects in the last 15 months.
The DOT has been announcing such loans piecemeal as they were finalized,
but the recent $1.6 billion TIFIA loan to help pay for the Tappan Zee bridge in
New York drew attention to the impact of the changes made in the last surface
transportation reauthorization legislation. TIFIA generally is seen in Congress as a
successful way to get needed infrastructure improvements, over and above what
the Highway Trust Fund and federal and state budgets can fund. TIFIA has bipartisan support in
Congress. The upcoming reauthorization
provides an opportunity to tweak provisions in TIFIA, if needed, to assure that
any public construction projects that TIFIA backs are bonded.
While the Chairman intends to pass surface transportation
reauthorization legislation before the current law expires, it is too early to
speculate on whether that is possible.
View PDF version (or navigate to Government Relations / Public-Private Partnerships (P3s) - Public)