An asset recycling programme coming out of the $1.2 trillion Bipartisan Infrastructure Framework will not replicate the programme seen in the past in Australia, Morteza Farajian, executive director at the Build America Bureau, told Infrastructure Investor’s New York Forum.
Farajian, who leads the US Department of Transport’s credit programme, said states will be advised rather than incentivised when it comes to asset recycling, as laid out by the infrastructure bill signed into law this week by President Joe Biden.
“Unlike what happened in Australia, asset recycling is not going to states to incentivise them as a bonus when they are privatising their assets. Quite the opposite in fact,” he said. “It’s coming to us and we are going to use that money to create a pool of consultants that we are going to provide to the states, to help them identify good assets that have value, and they can unlock that value.”
Australia’s asset recycling programme gave state and territory governments a financial incentive to sell or lease government assets and redeploy the proceeds into new infrastructure. Some $3 billion in incentives were paid to participating states and territories over the life of the scheme, which helped to unlock more than $17 billion in new infrastructure development across the country.
Farajian added that many states have not been adept at taking advantage of the infrastructure financing programmes already available.
“More than half the states in the US have never used the TIFIA [Transportation Infrastructure Finance and Innovation Act] programme. They are still thinking about the traditional way of funding these projects and not looking at innovative funding and delivery models,” he maintained.
Cutting red tape
Farajian was joined on the panel by DJ Gribbin, founder of consultancy group Madrus and a special adviser on infrastructure to former President Donald Trump. Gribbin highlighted the speedier environmental permitting process in the bill as one of its highlights, a process that began under President Joe Biden’s predecessor.
“It was an executive order in the Trump White House and it is now codified in law. The goal is to bring down permitting from four-and-a-half years to two years, which would then accelerate major projects in the country,” he said.
Gribbin, who also serves as an operating partner at Stonepeak, highlighted the potential transformation provided by the bill to US broadband connections.
“When I was in the White House, we put together an infrastructure plan. I asked: ‘How much it would take to wire every household?’ The answer was $40 billion. This bill has $65 billion available,” Gribbin said.