Location, location, location: If the chief executive of America has decided to give a speech arguing for greater embrace of private investment in public infrastructure, then the Port of Miami Tunnel (POMT) is a good place to give it.
US President Barack Obama called on Congress to back his proposal to create a national infrastructure bank and free up $4 billion in additional debt financing while speaking after touring the POMT, a $900 million public-private partnership (PPP; P3).
Citing “this tunnel I just saw” as a jumping-off place, Obama, in a widely televised speech, hailed investment in infrastructure as a job creator, noting that “rebuilding infrastructure” can “strengthen our economy over the long haul”.
“There is work to be done, there are [people] who are ready to do it,” the President said. “What are we waiting for?”
The POMT project reached financial close in 2009 along with the $1.6 billion Interstate 595 (I-595) Corridor Improvement Project – the first-ever P3 in America to use an availability payment structure – also in Florida.
Obama incorporated rebuilding and repairing infrastructure in the US as a theme of his 2008 run for the White House, and pitched creating a $10 billion national infrastructure bank in his 2011 State of the Union address.
Now Obama, winning a second term as President in 2012, has begun to allude to partnering with the private sector to tend to the US infrastructure gap.
In Miami, he again talked up his ‘Partnership to Rebuild America,’ concept, while calling on the federal government to free up $4 billion for what he termed ‘America Fast Forward Bonds’ that would help attract private capital.
POMT, according to Obama, served as a useful template for how the US should be tackling infrastructure.
“What Miami has been doing is a good example of how my plan would work,” he said, calling the project jointly funded. “Everybody had some skin in the game. We can do this all over the country.”
Letter to the Editor…
“I noticed the recent article in Infrastructure Investor on the President’s speech in Miami and had a few immediate thoughts. First, it’s something of a misnomer to say the President actually has a “plan” for infrastructure renewal. Most of what he put forward in Miami were hackneyed proposals dulled by overuse.
Our infrastructure suffers from a lack of funding not a shortage of financing mechanisms. America Fast Forward bonds could be an excellent financing vehicle but only if they’re backed by sustainable revenue streams in the form of tolls or dedicated tax revenue.
Similarly, private participation through PPP, while effective (and necessary), comes with an expectation on the part of the private partners of repayment and reasonable returns on investment.
Speaker Boehner noted afterwards that “somebody has to pay the bill” but neglected to say that he has opposed any increase in the Federal gas tax, an efficient user fee to fund transportation but one which has now been rendered impotent by inflation.
Florida Governor Scott’s claim of independent action was also a bit disingenuous since he failed to mention the $341 million provided to the Port of Miami tunnel project through a below-market TIFIA loan; Federal assistance without which the project would not have reached financial closure.
Until US politicians make infrastructure renewal a real priority rather than a pawn in a political game, these marquee events will continue to just be déjà vu all over again.”
– Richard Little, infrastructure policy consultant, Pinehurst, North Carolina