The Trump administration should create a federal public-private partnership office to encourage more P3s in public infrastructure and loosen up bond rules to encourage cities and states to privatize their existing assets.
Those are among a shortlist of recommendations floated last week by a
The advisors also proposed streamlining environmental laws and building a bridge-and-tunnel transportation corridor connecting New Jersey and Manhattan that would separate commercial and passenger traffic.
"We believe it can all be done without any taxpayer burdens," said board chair Gregg Reuben, CEO of Centerpark, said of the New York area corridor. "It could be set up as a public-private partnership, with DOT's leadership and local leadership."
The advisory group consists of experts in the areas of P3s, infrastructure, aviation, finance and legal affairs. Set to meet quarterly, the board held its first formal meeting last Wednesday. It plans to present Duffy with a comprehensive list of nationally significant projects and recommendations next quarter.
A federal P3 office would promote P3s by deciding which projects are the most viable and crafting standard documents like Request for Proposals that states and local governments could use, said board member Robert Valentine, senior managing director at Macquarie Group.
"States and authorities have shown an incredible ability to get P3 projects done if they have their own separate office," Valentine said, citing Virginia's P3 office as an example. "If you're allocating the responsibility to a certain group of people who are laser-focused on delivering just those projects, without relying on folks at the DOT who've got to manage the daily operations of the DOT, it gets it done."
The administration could encourage more asset recycling — the selling or leasing existing assets to private entities and reinvesting the proceeds into infrastructure programs — by offering federal money to those governments that participate, the board said.
"With that federal incentive, it could be quite an attractive carrot for them," Valentine said.
Governments would also be more likely to monetize their infrastructure if the tax-exempt bonds backing the asset are allowed to remain outstanding, Valentine said. Current law requires municipal bonds to be defeased if a city or state is selling or leasing the asset that the bonds originally financed.
"If those bonds could stay in place as tax-exempt bonds, you could, again, lower the cost of financing for the incoming operator," he said. "Everyone wins as there's more upfront money for the state as they receive upfront proceeds for that concession."
The board also recommended that the administration work with New York and New Jersey leaders to build a new tunnel and bridge to reduce congestion. The Hudson River tunnel would be dedicated solely to commercial traffic while the bridge would be reserved for passenger vehicles, bikes and pedestrians.
Separating passenger and commercial traffic to improve traffic flow into New York would be "game-changing," said board member Steve Lefton, executive chair at consultant Kimley-Horn.
"It's a global project," Lefton said. "To do that will be something that has never been done in the northeast."
Noting that President Donald Trump "likes big projects," Duffy said he hopes the board will help change the way the country builds infrastructure.
"We do business the same way in government and it hasn't changed — we spend a lot of money, we don't get a lot of deliverables" Duffy said. "If we change over the next three years how we deliver projects, how well we spend the money ... the next administration, no matter what the political stripe, they can look at what this group has done together and continue the effort to deliver for the American people."
