President Obama, speaking at the Port of Wilmington in front of the I-495 Bridge in Delaware, announced a new executive action to create the Build America Investment Initiative, a government-wide initiative to increase infrastructure investment and economic growth.
As part of the initiative, the administration is launching the Build America Transportation Investment Center – housed at the Department of Transportation – to serve as a one-stop shop for cities and states seeking to use innovative financing and partnerships with the private sector to support transportation infrastructure.
The president’s visit and announcement were a part of the administration’s continued push to “highlight the importance of investing in our nation’s infrastructure so that we can build on the progress our economy is making by creating jobs and expanding opportunity for all hardworking Americans,” according to a statement from the White House press office. “The steps announced continue the momentum the president has made using his executive authority – his pen and phone – to invest in modernizing our infrastructure, including speeding up the permitting process for major infrastructure projects to create more jobs.”
The White House also acknowledged that the president supports the steps that Congress is taking in the short-term to avoid a lapse in the Highway Trust Fund, and he will continue to push for long-term solutions for our nation’s infrastructure and the American economy.
In addition to the Build America Transportation Investment Center, the plan calls for the creation of:
- Build America Interagency Working Group: To expand and increase private investment and collaboration in infrastructure beyond the transportation sector, a federal inter-agency working group, co-chaired by Cabinet Secretaries Lew and Foxx, will do a focused review with the best and the brightest from the public and private sector. This group will work with state and local governments, project developers, investors and others to address barriers to private investments and partnerships in areas including municipal water, ports, harbors, broadband, and the electrical grid. The effort will include a particular focus on improving coordination to accelerate financing and completion of projects of regional and national significance, particularly those that cross state boundaries.
- Infrastructure Investment Summit: As part of the drive toward innovative infrastructure solutions and to highlight the opportunities for infrastructure investment, the Treasury Department will host a summit on Infrastructure Investment in the U.S. on Sept. 9. This session will bring together leading project developers and institutional investors with state and local officials and their federal counterparts, and will focus on innovative financing approaches to infrastructure, and highlight other resources that support project development.
- “Navigator Service” for the Public and Private Sector: Through hands-on support, advice and expertise, the center will make DOT credit programs more understandable and accessible to states and local governments and leverage both public and private funding to support ambitious projects. The center will also provide private sector developers and infrastructure investors with tools and resources to identify and execute successful PPPs.
- Improved Access to DOT Credit Programs: The center will encourage awareness and efficient use of existing resources at the Department, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) program. TIFIA provides long-term, flexible financing to highway and transit projects that feature dedicated revenue sources. Each dollar of Federal TIFIA funding can support about $10 in loans, loan guarantees or lines of credit. In many cases, the lower cost of capital and flexible terms offered by TIFIA are critical factors in determining whether a PPP is a viable and cost-effective option for a project. The center will also focus on the use of key DOT programs including the Private Activity Bond program (PABs), and the Railroad Rehabilitation and Improvement Financing Program (RRIF).
- Technical Assistance: The center will share best practices from states that are leading the way on private investment to states that have not yet adopted innovative financing strategies, encouraging a more robust national market. Today, the top six states for PPPs have nearly two-thirds the value of all U.S. PPP projects. Twenty states have no PPPs in transportation at all. The center will provide technical assistance to help remove barriers to ensure the public and private sector can come together to complete projects that make sense. Through a website and on-demand technical assistance, the center will provide information about DOT credit programs, case studies of successful projects and examples of deal structures, standard operating procedures for PPP projects and analytical toolkits.It will also help interested investors better understand how DOT credit and grant programs can be used together to support project development.
- Information to Reduce Uncertainty and Delays: The center will work in partnership with the interagency Infrastructure Permitting Improvement center to provide visibility for local and state governments, project sponsors and investors on the permitting process.
In response to President Obama’s announcement, the Board of the Association for the Improvement of American Infrastructure (AIAI) has released the following statement:
“AIAI applauds the efforts of President Obama’s Build America Investment Initiative, which aims to boost infrastructure investment and economic growth through increased national use of Public Private Partnerships (P3). AIAI looks forward to learning more details on the role of the Initiative and the Build America Transportation Investment Center as this develops.”