Of course, the Chamber of Commerce crowd welcomes more P3s that subsidize private toll operators and guarantee the private company's profits. We don't need anymore taxpayer-subsidized 'job growth.'
New jobs, new contracting opportunities – all good for Texas
By Mary Scott Nabers
San Antonio Business Journal
July 25, 2014
The concept of financing large infrastructure projects through public-private partnerships got a huge boost recently when President Obama announced the new Build America Transportation Investment Initiative. Geared toward increasing public-private partnerships (P3s) throughout the nation, the presidential initiative will provide all types of assistance to partners launching infrastructure projects.
A “one-stop shop” for assistance – the Build America Investment Center – will help partner cash-strapped governments and cash-flush private-sector firms that are willing to invest in infrastructure projects.
The center will offer a “Navigator Service” for both the public- and private-sector partners. Located within the U.S. Department of Transportation (DOT), it will provide information to private-sector developers and investors about DOT credit programs and various other types of assistance and resources.
Public-private partnerships have already been highly successful in a number of states, including Texas.
The $1.2 billion Dallas-Fort Worth (DFW) Connector project in Texas just last week was named the “P3 Project of the Year” by the American Road & Transportation Builders Association at its annual P3 conference in Washington, D.C. This highway expansion and reconstruction project includes 24 lanes – 14 main lanes, six frontage road lanes and four managed toll lanes. The Texas Department of Transportation teamed up on the project with private partners that specialize in architecture and transportation, construction, engineering and design. The team also included a financial advisory firm, a national law firm and a joint venture construction group. This model public-private partnership resulted in the project being completed six months ahead of schedule and at a savings of $140 million.
Florida alone has completed more than $6 billion in P3s since establishing the state’s Office of Public-Private Partnerships in 2007. Its most prominent P3 project is the $1.1 billion Port of Miami Tunnel. That partnership includes the Florida Department of Transportation, Miami-Dade County, the city of Miami and a private-sector developer.
In Denver, a P3 involving multiple financing sources was used as part of the city’s $2.2 billion FasTracks development that combined light rail, bus rapid transit, development of Denver Union Station and other improvements. The city used federal transportation program grant funds, Private Activity Bonds, a Transportation Infrastructure Finance and Innovation Act (TIFIA) loan and other state and federal funding to construct two new commuter rail lines.
In addition to the investment center, the presidential initiative also calls for a working group that will focus on expanding the use of P3s beyond the transportation industry to include such areas as water, ports, harbors, broadband and the electric grid. Also, the U.S. Treasury Department will host a summit on “Infrastructure Investment in the United States” on Sept. 9. This session will bring together stakeholders including leading project developers, institutional investors and state, local and federal officials. It will focus on innovative financing approaches to infrastructure and give an overview of other resources that can be used to support project development.
Texas has lots to gain from this initiative – hundreds, perhaps thousands, of new jobs and an economic stimulus that will likely ripple through every region of the state.