To say that infrastructure currently has a high profile in the US is somewhat understating things.
For months now, there have been weekend shows where top politicians have been jostling for position to tell everyone how important infrastructure is, and how keen they are to work on legislation that will (depending on the politician in question) either fix the current state of roads, bridges, and so on, or revolutionize the country and make the US economy fit for the 21st Century.
And as conversations between different factions within the parties have rumbled on, President Joe Biden has also been busy promoting his plans for trillion-dollar investment. The president has been out and about on a roadshow to publicize the benefits of his package, while also having increasingly regular calls with different groups of politicians to convince them to back the plans in Congress.
Such a national focus is, of course, welcome. For the P3 industry, it has also been good to see the model debated and discussed at a national level and for the phrase “public-private partnerships” to actually make it into the bipartisan legislation that passed the Senate back in August.
Whatever happens to that bill - and it is anticipated that it will come before the House of Representatives before the end of this month - it is now incumbent on the infrastructure community to ensure that this opportunity is not lost. Assuming the bill is eventually passed into law and signed off by the president, the danger is that he and the rest of Washington will quickly turn their attention to other things, assuming the hard work on infrastructure has been completed. After all, they will have just given their assent to the spending of billions of dollars on repairing and upgrading the country’s infrastructure, so what more could be required?
In fact, the hard work of getting spades in the ground will only be about to start.
Ensuring that this promised money is not left lying around, awaiting on various requests and approvals for months or even years at a time, will be another important task of the federal government. There are concerns among some in the infrastructure industry that the federal government is simply not set up to administer such large sums of money and will therefore struggle to get it out to the places and projects that need it most, in a timely fashion.
It’s why some are hoping that the House will reinstate the concept of an infrastructure financing authority, which was part of the original bill but dropped in the last minute horse trading to push it through the Senate.
One recently relaunched program is perhaps a case in point. The Department of Veterans Affairs has tendered for P3 consultants, after legislation was introduced earlier this year to extend the pilot program for using P3s to deliver new veterans’ accommodation. The original bill passed in 2016 had planned for five pilot projects, but so far only two had managed to get off the ground.
Similarly, there was great joy and relief when the Fargo-Moorhead Flood Diversion project reached financial close at the end of September this year. But the deal had been years in the making, delayed for a number of reasons, and the US Army Corps of Engineers has a pipeline of deals it has been wanting to progress once this first one was over the line. One delay can affect a whole program of investment.
This is why organizations like the American Road & Transportation Builders Association (ARTBA) have been quick to criticize White House plans to roll back changes to the National Environmental Policy Act (NEPA). Recommendations from the Council on Environmental Quality would result in a number of provisions designed to speed up the environmental approvals process effectively scrapped. That would bring back all the uncertainties that plague major projects, which could spend several years meandering through the approvals process, only to be denied at the end. It is hardly a way to encourage greater private investment into projects.
So while there is no doubt that the accelerator pedal is to the floor as the politicians focus on getting the laws passed, it is going to be just as important for the infrastructure industry to keep its foot down long after the excitement of a presidential signature has died down.