When it comes to creative transportation financing in an age of rising
red ink, public-private partnerships (PPPs) are one of the most
popular ideas on the table in Washington. Rail planners in Denver
and Dallas are
exploring the strategy to speed progress on new lines, and the
White House's proposed $4 billion infrastructure
fund could provide seed money for PPPs all over the country.
Denver'sUnion Station, site of the FasTracks transit plan that is still in line
for federal PPP funds. (Photo: Inside
Lane)
But at a House transport committee hearing today, both lawmakers
and witnesses raised questions about the success of existing federal
involvement in PPPs, suggesting that more transparency and a streamlined
process could be needed before a new infrastructure fund would be
created to leverage private investment in infrastructure.
Rep. Pete DeFazio (D-OR), chairman of the committee's highways and
transit panel, wondered aloud whether Congress should leave aside the
Obama administration's $4 billion "I-Fund" and simply expand an existing
U.S. DOT program that offers loans and lines of credit for local
planners to sway more private funding -- the effort known as TIFIA, or the
Transportation Infrastructure Finance and Innovation Act.
"Maybe all of it should just go into TIFIA right now," DeFazio
said.
Chris Bertram, chief financial officer at the U.S. DOT, defended
the I-Fund plan by noting that it could provide more up-front financing
than TIFIA, which is now limited to covering one-third of any
transportation project's total cost.
Yet the hearing offered several examples of scattershot progress on
existing federal PPP programs, including TIFIA. Eugene Conti, North
Carolina's state transportation secretary, said his state had decided to
move forward on its Yadkin River Bridge replacement using federal
GARVEE bonds after winning a federal stimulus TIGER grant that covered
only one-thirtieth of the project's total cost.
"We need to know what the rules are for this program ... we need a
lot more transparency," Conti said.
Under questioning from DeFazio, Denver Regional Transportation
District CEO Phillip Washington also acknowledged that while he believes
he has satisfied the federal requirements to receive money from the
U.S. DOT's transit PPP pilot
program, the actual funds have yet to arrive -- nearly three years
after his city was
first selected to participate.
Washington told DeFazio that he anticipates federal aid arriving
"in 2011, or whenever [a new federal transport] bill passes."
Rep. Chris Carney (D-PA) raised another concern, asking Bertram
about the privately run San Diego toll road that filed
for bankruptcy last month after winning $140 million in TIFIA
loans. The South Bay Expressway, as it was known, is the first TIFIA
recipient to become insolvent, and Bertram referred to "springing lien"
language in the toll road's loan agreement that could put other
private-sector creditors ahead in line for reimbursement.
