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Assessing challenges, harnessing opportunities

Doug Peterson, president and CEO of McGraw Hill Financial, explains the ambitions of the Infrastructure Council the US’ BPC launched earlier this month.

The Bipartisan Policy Center (BPC) a couple of weeks ago launched an Executive Council on Infrastructure, the brainchild of McGraw Hill Financial President and chief executive officer (CEO) Doug Peterson. We had a chance to catch up with Doug after the event and this is what he had to say.

Infrastructure Investor: When did you first realise there was a need for a CEO Infrastructure Council?

Doug Peterson: This was an initiative that initially began inside of our business as we realised that there was a need for more and more infrastructure data and analytics. Then as we started doing digging into that need as a global need, we realised that in the US, it was a big topic. There were debates going on about the Highway Trust Fund, there were debates going on about P3s and do they work or not. It was then that we started spending time in it from a policy point of view in Washington, and I felt that putting together a CEO council was one of the ways to bring together the public and private sectors in a policy approach in Washington. So it was over the last year and a half that this developed.

II: And how did you link up with the BPC?

Peterson: They have a lot of expertise in this. On the one hand, it's called the Bipartisan Policy Center, but they also have a lot of expertise in public and private partnership work in the policy area. It was valuable to find an organisation that wasn't going to be seen as Republican or Democrat in a way that you would have a bias. When you're putting together a group of CEOs you don't want to start with a bias that it's on one or the other side of the aisle kind of approach. The BPC has an excellent track record, they have excellent people, and they've got experience with doing private sector work.

II: Who are the other council members and what experience do they bring to the table?

Peterson: We looked to assemble a group of people that was going to be geographically and industrially diverse and have a linkage with infrastructure. There's still one or two more [CEOs] that we're working on bringing in.

I'm at McGraw Hill Financial, which covers data and analytics as well as credit and equity markets, [President and CEO of American Water] Susan Story covers water from the southeast, Patrick Decker is from Xylem which is a water and manufacturing systems company with main operations in the Midwest, and Mike Ducker is from FedEx [Freight], which is from the south to focus on transport including air and roads. Then you've got Jack Ehnes and he's from CalSTRS, an institutional investor. We have Jane Garvey who's the North America chair of Meridiam Infrastructure – that's consulting – P. Scott Ozanus who's from KPMG so that's accounting, and we look at that as very, very important because sometimes one of the biggest barriers for people is the accounting one. And then Suzanne Shank [from Siebert Brandford Shank] is a municipal bond expert.

So we have the diversity that we wanted both from the point of view of geography as well as in industry and expertise, and that was one of the goals.

II: At the launch event for the CEO Infrastructure Council, it was mentioned that the members will be focusing on producing a report in about a year; what's the essence of the hypothesis for this report and where do you see it going?

Peterson: The way that I think about this is, we're looking at the soft side of infrastructure. By that I mean, what are the financial mechanisms? Is this going to be an asset class? What are the regulatory and policy barriers, as well as the regulatory and policy opportunities to have more infrastructure investment? What are the political barriers? So we're looking at all of the different aspects of infrastructure in the US so we can see, how can we break some of those down so we can have a much more robust infrastructure investment program in the country.

II: Will the council focus solely on the US infrastructure market?

Peterson: Yes, this is a US-oriented team.

II: How do you see the council, in the short- and long-run, interacting with the public- and private-side players in infrastructure finance and development?

Peterson: In theory, this is going to be policy work. So we're strictly looking at policy. Now with that said, I think there are a couple of ways. We're going to want to be interfacing in particular with Congress. That's one of the reasons this is important to be doing this in Washington, because there's so many aspects of different proposals that are popping up in Congress in historical efforts like the Highway Trust Fund, for which they need to update and come up with a way of continuing to fund it. There's things like TIFIA and you've got also large infrastructure investments buried in the different agencies in the governments. So we're going to be doing a lot of work with the Congress staffs and the different agencies in different parts of Washington. Then, over time, we'll tap into other areas of private sector expertise as we develop our case.

II: How often will the council meet?

Peterson: We expect that we're going to meet face-to-face once a quarter. We'll also block a day in every quarter to get together with the people who are supporting us and get an update on how things are going.

II: And what will be the focus of those meetings?

Peterson: The idea will be to launch certain work streams and then continue to tweak them as we move forward.

II: Is there anyone who's played an integral part in putting this council together that deserves credit for their contributions?

Peterson: Jason Grumet [BPC founder and president] is the one who really needs to be mentioned because he's taken over something that was an idea and made it into something that's really working.