Former Representative Ray LaHood was officially sworn-in as the 16th US Secretary of Transportation, following a confirmation by the Senate on January 22.
LaHood’s nomination for the post by President Barack Obama has been closely watched by many in the infrastructure investment community since the next secretary of transportation will immediately face the challenge of handling the transportation component of the $825 billion economic recovery package currently under debate in Congress.
Of that $825 billion, $90 billion is devoted to modernising US roads, bridges transit and waterways in the version of the bill that was under discussion in the House of Representatives last week.
A longer-term challenge will involve overseeing the reauthorisation of the 2005 surface transportation act, which expires on 30 September 2009. Many are urging Congress to consider alternative sources of infrastructure financing, such as public-private partnerships, in reauthorising the bill.
At his Senate confirmation hearing earlier this week, LaHood described public-private partnerships and the tolling of new roads and bridges as “outside the box” ideas the US government should consider in reauthorising the bill.
A new public relations effort launched earlier this week by a group of investment banks, infrastructure funds and law firms argues that allowing more private investment in US infrastructure will help spur job creation over and above what the government hopes to achieve with its infrastructure stimulus spending. They hope that Secretary LaHood, given his background, will be open to their ideas.
“We think he’ll be a terrific secretary of transportation. Having him coming from Peoria, Illinois, outside of Chicago, he’s seen first-hand how successful Mayor Daley and Governor Daniels in Indiana have been in partnering with private sector,” said Rob Collins, head of infrastructure investment banking at Morgan Stanley, one of the firms that is part of the public relations effort.
Last year, Morgan Stanley advised Pennsylvania in its ultimately unsuccessful attempt to lease the Pennsylvania Turnpike to a consortium of private investors.