Georgia Transportation Builder - Fall/Winter 2013 - (Page 17)

Evolving Our Infrastructure Financing Is the construction industry ready for the financial challenges to come? By Bob Chambers, Smith, Currie & Hancock, LLP THE LAST FEW years have not been easy on the U.S. construction industry—and Georgia is certainly no exception. The recent recession was so severe it completely reset the rules for private construction projects across all segments of the economy, from single-family and multi-family residential to commercial and industrial markets. Couple this with the growing realization that for the coming decades, public owners at all levels—federal, state, and local—will have fewer financial resources for expanding, improving or even maintaining our critical infrastructure. Now, add the increase in allegations of fraud and false claims from many public agencies, with some leading to pursuit of criminal prosecutions. Last, factor in an always expanding government bureaucracy affecting all aspects of construction (such as permitting, erosion control, and endangered species protection) and employment (such as I-9 e-verifications, ADA, DBE, and other socioeconomic programs). Despite these challenges, the U.S. construction industry will continue to evolve to serve the needs of the public, particularly in the area of project finance. Design-build-operate-maintain-finance projects, public-private partnerships and privatization efforts are examples of the project tools being used to meet this challenge. The industry that knows the most about how to build America’s transportation systems, as well as its water resource assets, energy generation and distribution facilities, educational institutions, and healthcare environments, will need to continue to expand its willingness to sit at the table with, and become a part of, the financial community that has traditionally financed construction of these assets. This willingness to help public and private owners work with the financial community is the best way to help them answer the question—where will the money come from? Contractors—big and small—need to increase their understanding of project equity investment, full life cycle cost analysis, tax exempt project financing, project cost comparator analysis or public project cost equivalency calculations, private activity bonds, user fees (a/k/a tolls), and fund availability commitments. In addition, contractors must push their federal representatives for more money, not just increased appropriations but creative solutions such as enlargement of TIFIA funds, both in terms of available dollars and acceptable projects as well as funding through a private infrastructure bond source or infrastructure fund/bank to attract private long-term investment in our infrastructure. Otherwise the crisis in infrastructure financing will only continue to worsen. Admittedly these topics are complex. However, by pooling resources and efforts in trade associations and working collectively, contractors can assist not just themselves but the industry they serve. Likewise, the role of construction counsel continues to evolve. We remain deeply committed to working with the industry we serve, to understand the evolving challenges, to be open to helping create solutions and options and to support the industry through educational and trade association activities that will, in the coming decades, help America, and its construction industry, as it continues to improve, adapt, and prosper. ● FALL/WINTER 2013 GEORGIA TRANSPORTATION BUILDER | 17

Table of Contents for the Digital Edition of Georgia Transportation Builder - Fall/Winter 2013

View from GDOT: Every Decision We Make
President’s Message: Members in Voice and Action
Bruce Melton and Oxford Construction
A New Conversation
Evolving Our Infrastructure Financing
Index of Advertisers

Georgia Transportation Builder - Fall/Winter 2013