Much to do
As the country appears to be stepping into the political unknown this week, pressure is building on the US Congress to make some affirmative decisions to boost the P3 landscape in the country.
The P3 Coalition for Innovative Infrastructure Finance, led by the Association for the Improvement of American Infrastructure (AIAI), has submitted letters urging Congress to support Private Activity Bonds (PABs) for a wide range of deals, as well as for improved access to WIFIA funding.
The group has asked Congress to consider four bills currently introduced in the Senate and the House, covering public buildings, surface transportation and water.
By providing the private sector with this tax-exempt tool, the federal government can increase the scope for the model and perhaps breathe life into many large, complex public infrastructure projects that otherwise may never see the light of day.
It also shows that that industry is rallying to fight the cause for P3s – something that has not always happened in the US. But the arrival of Donald Trump into the Oval Office from January next year is likely to embolden the P3 market, given a number of pronouncements he made during his election campaign relating to new infrastructure and using private cash to fund it.
Announcing his plans for his first 100 days in office last month, Trump included plans for an “American Energy & Infrastructure Act”.
While Trump’s previous statements on climate change will have many renewables investors running for the hills, the infrastructure side of the act may offer promise to P3 investors, as it would leverage P3 and private investments through tax incentives “to spur $1trn in infrastructure investments over 10 years”.
Add to this the fact that, in his victory speech, Trump made infrastructure one of his top priorities, and there may be good reason for the industry to be optimistic.
Given that election night also saw both the houses of Congress turn red, there may have never been a better time to bring forward infrastructure-related legislation to the federal government.
Over the past few years we have seen turbulent politics impact the industry on several occasions. Given the likely global repercussions of Trump’s success – as well as his renowned willingness to change position over and again – means that such political uncertainty will continue. But there may now be a window of opportunity for the P3 market to get things done in Washington in a way that has proved difficult over recent years.
The P3 Coalition for Innovative Infrastructure Finance may be at the forefront of that opportunity.
Away from the US – and the country has dominated headlines around the world over the past week – one of the other big news stories has been Infrastructure Ontario’s search for a new leader following the departure of Bert Clark.
There will be plenty of news to come from Canada – and, no doubt, the US – at next week’s Canadian Council of PPPs’ annual conference, which will be covered live by P3 Bulletin. See you there!