President Donald Trump appeared to perform an about-turn on an important part of his infrastructure plan on Tuesday, saying he is no longer looking for private-sector partners to help generate $1 trillion of investment, according to The Washington Post.
Trump apparently told a group of Democratic Congressmen from the House Ways and Means Committee that certain public-private partnerships “don’t work”, the newspaper reported, quoting Representative Brian Higgins. Higgins attended the meeting and said the president “categorically” dismissed the idea.
He said Trump indicated federal spending would be used to pay for infrastructure upgrades, stretching money further by extending loan guarantees and lines of credit to private developers.
Higgins' office did not reply to a request for comment. His colleagues in the House, Representatives Bill Shuster and Kevin Brady, did not reply to requests for comments either.
If accurate, Trump seems to be turning away from details he and his aides have discussed since taking office about how he will finance the country’s much-needed infrastructure improvements.
In May, along with his budget proposal, Trump released a six-page blueprint calling for $200 billion of federal infrastructure spending over 10 years that advisors said would be used to mobilise $800 billion from the private sector.
In June, the president stood on the banks of the Ohio River and said: “State and local leaders will have more power to decide which projects get built, when they start and how they are funded. And investors will have a much more predictable environment that encourages them to invest billions of dollars in capital that is currently stuck on the sidelines.”
But his latest comments have created uncertainty.
George Miller, a lawyer for Mayer Brown’s infrastructure and asset finance practice, told Infrastructure Investor Trump’s comments are another surprise, but it doesn’t mean he will restrict the use of PPPs.
“People will be disappointed if the federal government doesn’t increase support for infrastructure investment, but as long as they don’t decrease it, things will go on as before,” Miller said. “States and localities are already moving ahead with whatever they can develop with the help of the private sector.
Joel Moser, a Forbes columnist and infrastructure expert, wrote that he agreed it was time to “jettison” the private investment-based infrastructure plan many have talked about this year. He said that involving the private sector “was never a bad idea, it is an idea whose time has not yet fully arrived in the United States”.
“The real question is the funding method – whether the money raised will be repaid with taxes or tolls, so by the general public or the using public. Once you have a viable funding plan, you can choose the most efficient financing mechanism,” Moser said.