CONNstruction - Fall 2011 - (Page 7)

newsandviews Riding on Private Investments CCIA President Transportation advocates and lawmakers in Connecticut have been discussing infrastructure investments for a long time. For the past several years, the straightforward concepts that everyone agrees on have been the focus of discussion. Now, due to financial concerns, the discussions are getting significantly more complex. It has been easy to discuss the benefits of infrastructure investments. There is widespread, even bi-partisan, agreement that these investments have a multiplier effect on economic activity. The discussion is simple: Dollars spent building and maintaining transportation infrastructure creates jobs that inject money back into the economy. Those dollars yield additional returns on the investment as the improved infrastructure supports economic growth. The infrastructure investment discussions become much more challenging when the topic moves to setting priorities. The three major priorities – maintaining the current transportation systems in a state of good repair, increasing capacity on the highways, and adding public transportation – each merit attention. In good economic times, with robust government spending, there is widespread disagreement on which investments should be made, and in which order. When government funding for those investments falters, disagreements intensify. On its face, a balanced combination seems like a sensible approach. However, in our current state, it is woefully inadequate as escalating deterioration, mounting congestion, compromised safety, and intensifying pollution far outpace the limited funding. Additional funding would go a long way to reducing the pressure on setting priorities. The difficulty is By Donald Shubert that the issues relating to funding sources and raising revenues are even more controversial. Everyone agrees that the current revenue streams fall short of meeting Connecticut’s transportation needs, but when it comes to discussing gas taxes, tolls, and other revenue mechanisms, agreements cease and the discussion breaks down. To move the revenue and funding debates in a positive direction, government officials and policy makers are looking to private investment to help fill the growing gap between our transportation needs and available government funding. The proposals in Congress to reauthorize the long-term surface transportation legislation contain provisions designed to encourage states to add private investment to the portfolio of revenue sources. Both Chambers in Congress are considering using infrastructure banks, loans under the Transportation Infrastructure Finance and Innovation Act (TIFIA), Private Activity Bonds, Build America Bonds and municipal bond programs to leverage private sector funding sources at the project level to complement the existing government funding streams. Private investment in public infrastructure has been a major funding source in other countries for years and it is gaining attention in the United States. There is a tremendous amount of private capital available to be used to fund infrastructure projects. Private equity industry consultants estimate that there is over $180 billion of private equity and pension fund capital focused on infrastructure equity investments. For example, the A.F.L.-C.I.O. announced recently that it is working with its pension fund managers to make at least $10 billion in union pension money available to finance infrastructure projects over the next five years. Private investment appears to be a worthy enhancement to the current funding streams. However, in order to attract and use the private funding, Connecticut will need to create legislation that supports income-generating facilities. This means tolls for roads and bridges, realistic fares for public transportation, user fees for ports, and expedited regulatory reviews. Legislative changes will also have to be made to allow for alternative project development and delivery processes. Whether it will be practical to attract significant private investment to enhance the state’s ability to deliver much needed infrastructure projects is a topic that is ripe for discussion. Let’s get to it. CONNstruction / Fall 2011 / 7

Table of Contents for the Digital Edition of CONNstruction - Fall 2011

Riding on Private Investments
Clean Water Fund Helps Create Infrastructure Jobs and Grow the State’s Economy
Public PLAs – Good or Bad?
Bioscience Connecticut Initiative: A Timely Investment
Shovel ready
Aiding economic growth
Wearing two hats
Jammed roadways and full trains
Major transportation initiatives in Connecticut
The Young Contractors Forum Summer Meeting
Associated General Contractors of Connecticut Annual Golf Outing
Connecticut Environmental and Utilities Contractors Association Spring Luncheon Meeting
The Connecticut Road Builders Association Spring Dinner Meeting
Connecticut Ready Mixed Concrete Association Annual Meeting
CTASLA/CCPC Pervious Concrete Workshop
Index to Advertisers/

CONNstruction - Fall 2011