A state of mind
Just a few weeks away from President-elect Donald Trump’s inauguration, and chatter around what his administration will do when it comes to infrastructure is at fever pitch.
After so much talk of a $1trn stimulus package that would carry the country’s construction industry on a wave of P3s and other types of investment, fears began to set in before Christmas that all might not be what it first appeared. Suddenly, there was talk of tax breaks and incentives, rather than hard cash that could be used to leverage more private investment.
And in the first week of 2017, the noise has been continuous, with various high-ranking federal players talking up the importance of infrastructure – but notably those in the strongest positions still not willing to put a price on all that.
The good news, of course, is that the Democrats are tentatively approving of the Trump administration’s infrastructure plans, such as they are. The fact there is so little detail at this stage is perhaps one reason why there has been so much noise filling the space, but having a Congress that is broadly on board with the concept is at least a starting point.
Of course, we have heard this before. When President Obama first arrived in office, there were noises from the Republicans that they would be supportive of infrastructure efforts, but in the end it took nearly all of Obama’s eight years in office before a comprehensive bill was finally passed.
But take Speaker Paul Ryan’s comments this week. Just after being re-elected as Speaker of the US House of Representatives, he told the Hugh Hewitt Show that the size of the spending package is not necessarily important – again raising the prospect that the trillion dollar figure may be a non-starter, even in Trump’s own party.
However, with so much focus and attention trained on the White House, it can be easy to forget that the powerhouse of US P3s has always been – and will continue to be – the individual states.
We had a powerful reminder this week of just what the states can offer the market – and it is not to be ignored.
New York Governor Andrew Cuomo launched his plans for a $10bn redevelopment of JFK Airport, saying he planned to build on the success of the LaGuardia developments, which are being carried out under a P3. Indeed, his Airport Advisory Panel that came up with the plans for JFK, strongly suggested a P3 model could be the best route for JFK.
Meanwhile, there have been important changes at state level across the country, and as new governors and others start to get their feet under the table in 2017, new opportunities are likely to emerge.
In Indiana, for example, Governor-elect Eric Holcomb’s legislative agenda includes “creating a 20-year plan to fund roads and bridges”, with “creative public-private partnerships” among the ways envisaged of delivering this.
And in North Carolina, the state’s new Secretary of Transportation is Jim Trogdon, who worked as chief operating officer at the department until 2013, during which time he coordinated the I-77 managed lanes P3 project.
So while the federal picture may take some time to become clear in 2017, the view from state level is much more promising in the US.