The U.S. Department of Transportation is urging Congress to lift the private activity bonds cap and expand a key transportation loan program to encourage more public-private partnerships.
Officials are hoping lawmakers will slot the P3-friendly provisions into the next surface transportation bill, said Deputy Secretary of Transportation Steven Bradbury Thursday at a P3 Forum in Washington, D.C. hosted by the DOT's Build America Bureau.
The DOT
PABs are a key P3 financing tool, as are the Transportation Infrastructure Finance and Innovation Act and the Railroad Rehabilitation and Improvement Financing loan programs.
"We're encouraging policy makers in Congress, as they're putting together a new surface transportation bill, to consider replenishing the reservoirs for some of this innovative financing" like PABs, Bradbury said. "We've actually used up all of our current capacity for PABs and we're hoping Congress will replenish the reservoir on that, because that's another critical way to finance these projects, in addition to TIFIA and RRIF loans."
Lawmakers last year held several hearings on the closely watched reauthorization bill but have not yet released a draft. House Transportation & Infrastructure Committee Chair Rep. Sam Graves, R-Mo., on Wednesday said a markup could come as soon as the week of May 11, according to Roll Call.
The DOT also wants lawmakers to expand the TIFIA program for airports, Bradbury said. Airports were added to the TIFIA program in the IIJA, an authority that expires with the law at the end of September.
Bradbury also mentioned requiring states to do a "value for money" analysis on all of their infrastructure to consider whether a P3 would cost less. Transportation secretary Sean Duffy's recent
As the pipeline builds, Bradbury said he's not worried about a lack of appetite on the private side.
"I don't see a risk that we are going to have a lack of capital investment from the private sector," he said. "I think it's a matter of the public sector understanding and unlocking the value of the assets involved in the projects."
The P3 pipeline of projects pending before the Build America Bureau is nearly $50 billion, the bureau's executive director Morteza Farajian said.
"It's amazing how the pipeline has grown — it's not by accident," Farajian said. "The administration in the last year and a half has played a great role in that pipeline."
States like Georgia, Tennessee and Virginia also have major projects in the works, state transportation officials said at the forum.
Georgia, which broke ground on its $11 billion SR-400 project last week, is now looking ahead to a series of future P3s. That includes the first phase of of its massive
A future phase includes making an existing 285 express lane bidirectional and adding another six to 10 miles, said Russell McMurry, commissioner of the Georgia Department of Transportation.
"There's no way in Georgia we could have advanced any of these projects through pay-go or even debt financing," McMurray said. "If we're doing to do big meaningful projects that really move the needle nationally and in the state, this is the only model that's going to work."
Tennessee is in the procurement phase for the first project in its
Virginia Transportation Secretary Nick Donohue said the state, considered a pioneer in the P3 transportation space, is working with Maryland to try to hammer out a deal for more I-495 express lanes.
Maryland Gov. Wes Moore announced in April
Virginia is also looking at turning parts of its I-95 express lanes bidirectional at all times and considering "concepts" for the northern end of I-81. It is also eying a brownfield project that's too early to detail, Donohue said.
"We have a number of projects we're looking at during Gov. [Abigal] Spanberger's four-year term," Donohue said. Virginia's strict one-term limit for governors can be a challenge for P3s, he added. "That means we have four years to figure out what we're doing with a project, so if we're starting it, we need to close it or get it to a place where we can hand it off to the next governor," he said.
The success of recent managed lanes projects show that user fees are the future, said Georgia's McMurry, saying Congress should use the tool to shore up the insolvent Highway Trust Fund.
"User pay — it doesn't get any cleaner than that," McMurry said. "This is a choice that people get to make and I really feel strongly that this is the only business model that's going to drive this nation forward."
