President Joe Biden’s Infrastructure Investment & Jobs Act (IIJA) created plenty of interest last year ahead of its signing - often topping the news agenda as the Democrats and Republicans inched closer to a deal.
Since the bill was passed into law, however, there was a feeling that it would take some time before the vast sums promised would make their way down to projects on the ground.
And while it’s true that there is still much to be done before the IIJA’s cash sees more shovels in the ground, the legislation does already appear to be having an impact on the infrastructure community across the US.
Biden’s plan was for a grand program of investment that would fix America’s infrastructure gap over the longer term. However, it was also designed to create a stimulus that would help the country ‘Build Back Better’ out of the pandemic, resurrecting the economy after the shocks caused by lockdowns and general fear caused by the spread of the virus.
That initial stimulus appears to be emerging. In Pennsylvania, for example, Governor Tom Wolf recently hailed an agreement with Norfolk Southern to improve rail services along the corridor west of Harrisburg. That deal was only made possible because of federal dollars flowing from the infrastructure Act, with PennDOT otherwise on the hook for the $350m cost of developing new train sets for the route.
Perhaps more excitingly for the US infrastructure market, however, is the attention it is now receiving from the private sector.
For so long, the US has been seen as the ‘sleeping giant’ of global infrastructure investment - particularly in the world of P3s. Today, it seems that there are a growing number of companies looking to take a bet on the country finally waking from that slumber.
Last week, Canadian infrastructure giant EllisDon announced plans to head south, into both the US and Latin America, in a move that will bring plenty of P3 expertise to these markets. It is an important vote of confidence in the US and it will be interesting to watch where the firm crops up on bids. It will certainly add a new layer of competition to the mix.
Meanwhile, investor IFM has homed in on southern Florida as an area where it intends to boost its presence - and sees significant opportunities for P3 development. Matt Wade, executive director of debt investment for North America at IFM, told P3 Bulletin that the IIJA will result in more investment coming into the region.
Added to that is the fact that Miami-Dade, in particular, has been highly active in P3 projects over recent years, with a number of other Florida authorities such as Broward County also dipping their toes into the sector. It’s expected that the IIJA will only increase the appetite for the model.
Advisors, too, are gearing up for more investment: in January, both Ashurst and DLA Piper beefed up their teams in readiness for more project activity across the country.
Meanwhile, Joe Seliga, partner at Mayer Brown - which itself added to its P3 expertise with the hire of Emily Gold Grunstein in January - told P3 Bulletin that while the IIJA is in its implementation phase, there is a growing move towards alternative delivery models for infrastructure, which he expects will only grow with the emergence of IIJA money in the months and years to come.