US infrastructure legislation will likely not be enacted for another year, meaning new federal support for investments won’t be available for projects until 2019, according to former Build America Bureau executive director Martin Klepper.
Klepper, who resigned as BAB’s first executive director in October, said at Infrastructure Investor’s New York Summit, “if we’re lucky, we will have an infrastructure bill a year from now”.
BAB is a federal agency within the US Department of Transportation that provides project finance lending for transportation infrastructure projects. It manages well-known programmes, such as the Transportation Infrastructure Finance and Innovation Act (TIFIA).
President Donald Trump took office in January promising quick action to make good on a pledge to create $1 trillion of infrastructure investments but has since been bogged down with other legislative initiatives. He’s also given mixed messages about how this will be accomplished.
In May, the White House released a budget proposal indicating a 10-year plan to use $200 billion of federal money to help spur $800 billion of private-sector investment. In September, he reportedly told a group of Democratic Congressman that certain public-private partnerships “don’t work” and dismissed them “categorically”, according to one representative.
Despite the delays, Klepper said that the discussion about infrastructure investment Trump has generated has been “very helpful, even if nothing else happens”.
That discussion, he said, has led to investors that are eager to commit capital and state and local governments that are ready to work with the private sector. “If we can trust the private sector to run our power grids, we can trust them to run our roads and airports,” Klepper explained.
How Trump plans to fund infrastructure investments remains unclear, but the other main feature of his policies so far is permitting and regulation reform, Klepper said. The president has signed two executive orders to move projects forward faster and has stated a desire to respect all environmental laws that are part of the permitting review process.
The three main pillars of what Trump’s infrastructure plan may look like, Klepper said, include the $200 billion of federal investment, which will break down into $20 billion a year for state incentives, support for rural projects that can be difficult to fund, and financing for new and “transformative” projects such as high-speed rail.
Until there is federal action, Klepper said state and local governments will have to take action. Several states are moving forward with developing PPP procurement processes and opening solicitations for private-sector developments.