Building Blocks on Infrastructure

Apr 3, 2013

In the 20th century, America built the world’s best infrastructure. But, like a house, infrastructure requires habitual maintenance and renewal—which have been lacking recently due to continual underinvestment. A strong, safe, reliable infrastructure is central to U.S. economic and job-growth success, be it increasing domestic energy production, remaining competitive in agriculture or trying to reinvigorate manufacturing. With 95 percent of global consumers outside the U.S., exports are especially important, and likewise reliant on a competitive transportation system.

The U.S. private sector is well positioned to help restore the nation’s overstressed infrastructure, according to its leading voice, the Washington, D.C.-based U.S. Chamber of Commerce (USCC). The USCC is the world’s largest business federation, representing the interests of more than 3 million businesses of every size, sector and region. According to USCC’s Janet Kavinoky, Executive Director, Transportation & Infrastructure, the private sector stands ready to pay its fair share to help maintain investment in public infrastructure.

“Transportation requires a multipronged approach,” Kavinoky says. “It needs to be public and private, and we’ve said repeatedly that we’re willing to pay in order to improve productivity and competitiveness.”

Kavinoky notes that plentiful private capital is available for infrastructure improvements, but much of it goes abroad, to countries more open to public-private partnerships, or P3s. This upfront capital can help start and complete projects far more quickly than if a state has to raise the money.

The Maryland-owned Port of Baltimore’s Seagirt Marine Terminal recently needed to build a new, larger berth to take on bigger ships, with business and jobs at stake. The Maryland Ports Administration and a private company, Ports America, which is owned by Highstar Capital, teamed up on a 50-year P3 lease and concession agreement. As a result, private sector investors will be repaid and receive ongoing revenue, and the MPA will maintain direct control of port security functions—a win all around. The Miami Port Tunnel is another successful public-private effort. Conceived as a privately-financed project, the tunnel was completed with a combination of private investment and a $450 million Transportation Infrastructure Finance and Innovation Act federal loan. The tunnel allows the first direct connection of a major port to the U.S. Interstate Highway System without any stoplights.

Innovative technology, such as improved incident management, streamlined operations and enhanced customer service, is also a game changer. For example, the need to mitigate traffic congestion on the Capital Beltway around Washington, D.C. couldn’t be accomplished in the traditional manner since public funds weren’t available. Due to Virginia’s Public-Private Transportation Act, Fluor Corp. brought an unsolicited proposal to table with an inventive approach that is creating added capacity via four high-occupancy toll lanes, while replacing 58 decaying bridges and overpasses. In the past year, Governor Bob McDonnell established a separate Office of Transportation P3, which will allow for further innovation. “We need more of that kind of innovation,” Kavinoky says. “State DOTs have evolved to be more about project management and oversight. We must partner with the private sector.”

The private sector can make a difference in one final way: sweat equity. Using private-sector resources to make the compelling case for smart infrastructure investment—as the U.S. Chamber of Commerce continues to do with its flagship Let’s Rebuild America Initiative—can shape the debate about infrastructure. Says Kavinoky: “We want to bring new business voices to the table. What’s infrastructure about? Quality of life, and the economy.” 

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