With the U.S. government exploring options to stimulate the economy and reduce COVID-19 impacts, there exists immense potential to rebuild the nation’s infrastructure in the form of a long-term stimulus that will benefit generations to come. I was pleased to join the Hudson Institute and colleagues across transportation and infrastructure to discuss key aspects of a federal led infrastructure recovery program.
I shared my thoughts on the challenges and opportunities within the infrastructure sector, and the ability for public-private partnerships to parlay limited government contributions into transformational, large-scale infrastructure projects. Here’s what I had to say:
- Some of the most promising opportunities within the U.S. infrastructure market already exist by utilizing asset recycling – a concept that takes the proceeds from sold or leased government infrastructure to fund new projects. Decision makers can unlock billions of dollars of untapped capital to fund infrastructure. Transurban estimates that in the United States, the top ten largest toll roads could generate about $300 billion of value through asset recycling to modernize infrastructure, create jobs and improve customer experience.
- The private sector also plays a key role in helping the federal government shape the future of infrastructure policy. By better leveraging private capital and innovation, smaller public contributions can have big pay-offs. We’re seeing this on our Express Lanes here in Northern Virginia, where the Commonwealth’s $517 million contribution has been leveraged into a $4.3 billion network.
- It’s important to continuously improve existing federal infrastructure investment vehicles, like Private Activity Bonds (PABs) and the Transportation Infrastructure Finance and Innovation Act (TIFIA) Program. For example, with interest rates lowered, current TIFIA borrowers could unlock billions of dollars to reinvest by refinancing their TIFIA rates to the current interest rate.
- Independent of COVID-19, future trends in transportation and the current state of America’s infrastructure require ongoing improvements to existing assets. These trends point to an increasing number of vehicle miles traveled on our nation’s roadways in the future. With American infrastructure receiving a D+ grade from the American Society of Civil Engineers 2017 Report Card, it is important to not forget our existing roads and bridges as we look towards the future.
As the federal government explores ways to rebuild the economy after the immediate impacts of COVID-19 subside, we must look towards U.S. infrastructure as a means of strengthening the economy, and getting people back to work.