Support, but little enthusiasm, for Trump infra order

An executive order issued last week promised to streamline the permitting and approval process, but investors are still waiting for a comprehensive infra bill.

With his signing of an executive order calling for accountability in the permitting process last week, US President Donald Trump turned to his promise to reduce the regulatory burden slowing down major infrastructure projects.

The order aims to limit the federal environmental review to two years, while tasking one agency with shepherding each initiative through the process. It also undoes an Obama-era rule requiring agencies to take flood risk into account when spending federal dollars on a construction project.

As far as the order’s goals go, those in the industry believe expediting the permitting process could be a boon – but its impact will depend on the success of the relevant agencies making good on the administration’s ambitions.

“The test there is whether it actually happens,” John Schmidt, a partner at the Chicago-based law firm Mayer Brown specialising in public-private partnerships, told Infrastructure Investor.

Ali Zaidi, who served as associate director for Natural Resources, Energy and Science in the Obama administration, is sceptical. Zaidi believes proposed cuts to regulatory staff in the Environmental Protection Agency and other agencies may slow down the approval process.

“This executive order does not change the underlying statutory responsibilities that the various agencies have,” Zaidi, now a senior advisor for the law firm Morrison & Foerster, told Infrastructure Investor. “I don’t know if they can follow through on what the executive order promises with the personnel and budget approach that they’ve taken.”

Trump’s decision to repeal the Federal Floodplain Risk Management Standard, enacted in 2015, drew criticism. Even the American Society of Civil Engineers, which backs efforts to streamline federal permitting, came out against Trump’s reversal of the measure.

Even for those who viewed Tuesday’s announcement positively, enthusiasm was tempered.

“This is marginally helpful, but I think really only in a small way,” said Ted Brooks, portfolio manager for globally listed infrastructure at CenterSquare. “I would love to be more excited about it, but I just can’t be.”

Trump entered office with a promise to spur $1 trillion in infrastructure spending while creating a larger role for private sector capital. This raised the hopes of investors, who awaited a major legislative package. Seven months into the administration, however, the closest thing to a detailed infrastructure proposal is a six-page outline released in May along with Trump’s proposed 2018 budget. That plan called for $200 billion in added spending over a decade, though this came alongside cuts to the Department of Transportation.

Tuesday’s announcement was followed two days later by news that Trump would abandon his infrastructure advisory council, which was officially launched in July and set to be helmed by Steven Roth and Richard LeFrak, both real estate developers.

Trump, however, remains optimistic that an infrastructure bill can pass.

“Infrastructure is something that I think we will have bipartisan support on,” the president said at Tuesday’s press conference. “I actually think Democrats will go along with the infrastructure.”