FTA targets red tape to boost transit PPPs

The Federal Transit Administration’s plan would allow recipients of federal assistance to apply for waivers of requirements standing in the way of public-private partnerships.

With US President Donald Trump looking to bring private sector money to infrastructure, the Federal Transit Administration has proposed a rule to facilitate transit-related public-private partnerships.

The proposed rule, called the Private Investment Project Procedures, would look to address impediments to greater PPP use, allowing modifications or waivers to FTA requirements if they stood in the way of implementing PPPs.

“This proposal will help us better understand the ways that unnecessary procedures may get in the way of building the best projects possible at the lowest cost to the public,” said Transportation Secretary Elaine Chao.

The rule would not allow requirements under federal statutes, including the National Environmental Policy Act, to be waived.

The proposed rule, which is open to public comment until 29 September, is an early step towards the administration’s aim of tapping private sector capital to improve US infrastructure. Trump promised during his presidential campaign to spur $1 trillion in infrastructure spending, with most of the total coming from increased private sector involvement.

Several possible plans for drawing private capital into the sector have been explored. A campaign proposal released in October proposed tax credits for investors, though little has been said of this idea since Trump’s election. An ‘asset recycling’ programme modelled after Australia’s – in which governments receive federal incentives by selling off infrastructure assets and reinvesting the proceeds in new projects – has also been discussed.

But easing and streamlining regulatory hurdles has been viewed as another key piece, and was a major focus of a six-page outline of Trump’s infrastructure plan released in May. It is also high on the list for private investors.

“To build a major project in the US now takes up to 10 years,” Global Infrastructure Partners chairman Adebayo Ogunlesi told us earlier this year, referring to all the environmental and regulatory hurdles projects have to clear. “Canada does it in two to three years and Germany does it in two — and I don’t think any of those countries are any less committed to the environment, or to proper regulation.”

Mike Pikiel, the US head of infrastructure for the law firm Norton Rose Fulbright, said certain regulations including Buy America requirements can be an obstacle for projects moving forward. The PIPP, Pikiel added, is a positive sign that the government is looking to address some of these hurdles.

“If there is a way for the federal government to streamline the processes and relax some of the requirements that have been an impediment, that can only help,” Pikiel told Infrastructure Investor.

“As more public transportation project sponsors find willing and able private partners, we must ensure that federal regulations or procedures do not stifle innovation,” FTA Executive Director Matthew Welbes said.