Cherian George, Managing Director - Americas Global Infrastructure & Project Finance at Fitch Ratings, talks about the agency’s outlook for the transportation infrastructure sector. He discusses what investors should be looking at and also he gives his perspective on the U.S. P3 market for infrastructure.

Fitch's view for transportation and infrastructure remains stable. In 2015, we had continued growth across all transportation sectors. When we look at expectations for
2016, what we expected was about 2% to 3% growth in airport and plane mins, toll road traffic and seaport cargo growth. With US GDP being slightly downgraded to about
1.8% largely because of industrial production slowdowns, yet, the U.S consumer continues to hold a fort with real incomes growing, savings rates remaining stable. We expect
continued growth in 2016, and continued consolidation of the credit profiles of most of these essentials transportation entities.

As we look in 2016, we're in the seventh year of an expansion and we also know that an expansion cannot continue forever because there will be some adjustment. We also have
global headwinds have been around for a while, so we expect -- While we've weathered them, there is some risk that there could be some negative impact on the U.S. As I was
thinking about U.S GDP is largely a driver of transportation traffic, as a result, what you might expect is, with a reduction in GDP, you would have some negative effects on
transportation entities.

It is important to remember, however, that we've just been through the Great Recession, the vast majority of transportation entities weathered the cycle and came out with stable credits. This was largely done by cost-containment, adjusting capital programs and dealing with unscheduled rate increases, that discipline remains with these entities. So as we look to the future, barring and an expected external shock. One would expect any normal cycle would be rather benign for transportation credits. The U.S. P3 market has had a set of fits and starts for the last decade, but finally, I think it is picking up its pace.

What you're seeing is states starting to see the benefits, not of looking at budgetary constraints, a one-shot revenue benefits but in fact looking at a proper needs analysis, proper scope development. In fact, looking at the benefits of innovation and competition from the private sector and then delivering accelerated infrastructure and ultimately longtime asset management. These are really positive signs for the P3 market.

Another positive sign is the expansion beyond transportation infrastructure, you're looking at water projects. You had Bayonne and Rialto done a few years ago and now Miami and
Santa Clara are looking at P3 projects. You have large projects in the university space like UC Merced looking at an entire campus using the P3 model. Also, Georgetown University
talking about you doing a P3. And last but not least, you have Ohio State University look at a unique energy management solution using the private sector. The P3 market will remain
as is and will remain a small portion of it but it is an increasingly larger portion over time.