The Right Way

With the Build America Transportation Investment Center (BATIC) now live, executive director Andrew Right explains the government’s latest plans

Over the past year, Andrew Right has been at the forefront of a mini-revolution in transportation financing.

Due to step down as executive director in the coming months, it is a good time to assess where the organization has been, and where it is going.

Right has led the charge that has seen BATIC placed at the center of the federal government’s plans, since the unveiling of the US Department of Transportation’s Build America Bureau in the summer. And he sees no reason why this will not continue to be the case over the next few years.

“Originally, I was asked to be executive director at BATIC in 2015 to serve as the outreach and the development arm of the DOT,” he explains.

“But we are now fully integrated into the bureau under the recent changes and want to make it clear that we are here to encourage states and municipalities in project planning, financing and delivery – and that includes P3s.”

With plans for a new head to oversee the organization in the future, BATIC is now fully gearing up for action. Marketed as the go-to place for federal support with P3s, the organization has quickly been thrust into the limelight – something Right believes the program is more than ready for.

“We like to think that we were so successful that when congress started working on the FAST Act, they looked at our organization and thought we were pretty effective,” he says. “That will continue to be the case now that our remit has been expanded.”

His words mark impressive progress from the federal government, which has often given the P3 market a lukewarm response at best. But since President Barack Obama’s launch of the wider proposals in 2014, what eventually became the FAST Act caused ripples in the market. But what exactly is BATIC?

“We are not a consultant and we will not take the place of an advisor,” explains Right. “But I am sure that when a municipality wants to know more about P3, we can help them get more comfortable with the process.”

Streamlining support at federal level can only be a good thing for the market, which has been crying out for federal backing for some time. In a country that operates on such a non-homogenous level, having a central point of contact can only serve to assist with vital knowledge sharing.

It is because of this that BATIC is being touted as something akin to a federal center of excellence, similar to P3 Canada or the provincial agencies north of the border – although Right doesn’t see it as quite as straightforward as that.

“You can call it a center of excellence,” he says. “In the US, the federal government has things that it controls and things that it doesn’t. We can’t make states do P3s. A lot of these alternative P3 agencies have a little bit more of an ability to influence policy.”

As a result, Right is touting the organization in a slightly different way. “I view what we are creating here as a kind of central infrastructure bank,” he explains. “We have the ability to create around $50bn in federal credit assistance and so we function, in many ways, the same way an infrastructure bank would.”

It is certainly in this direction that Right sees BATIC moving under his replacement, although he stresses that there is work still to be done. “We need to show people how successful we can be in getting projects done – then congress will see us as something that is worth broadening and expanding again.”

With a background in banking after founding investment firm Cherry Lane Capital following a near-decade stint at Goldman Sachs, Right is in a position to know.

At Goldman, he was part of the founding team that formed the Infrastructure Investment Group and raised $6.5bn for Goldman Sachs Infrastructure Partners I (GSIP I), which closed in December 2006.

But Right can also draw on his experience as a civil engineering graduate to press the importance of delivering successful projects to determine BATIC’s future.

“Once someone does a successful P3, they continue to do more,” he stresses. “So part of it is just breaking through that first one and making sure that public sponsors feel like they have a good grasp of what they are doing.

“At the end of the day, they don’t want to wake up and feel like they have been taken advantage of. I think that is one of the major misconceptions and impediments to getting P3s done in the US.”

But the industry has so far been enthused by BATIC’s emerging role, according to Right. “The private sector has said that this is exactly what the industry needs,” he says. “We need to show people that we are here for the long-term.”

Long-term survival has long been a thorn in the side of the US market since its expansion over the past few years. This lack of durability at all levels, exacerbated by a patchy pipeline and political risk, has consistently hindered real growth.

The feds have been careful to avoid the latter issue with the creation of BATIC to provide the stability that regional governments require – something that may be vital with one of the most hotly contested and controversial presidential races of all time approaching its conclusion in November.

“Congress has been very smart in how they created this program,” explains Right. “For example, my role as executive director is appointed by the Secretary and is therefore not a political role.”

As a result the organization is unlikely to fall foul of the same political turbulence that often hits public sector bodies in the US. This gives the bureau a different “level of credibility in terms of how it operates”, according to Right.

“We need to be seen as a legitimate credit office, as opposed to something that can be politically manipulated one way or another,” he says.

Under his stewardship, BATIC is now in a position to deliver on the positive vibes coming from the federal government with regard to P3s. Who succeeds him remains to be seen, with the bureau currently undergoing the interview process, but the future is certainly looking bright.

“The real challenge now will be to continue to institutionalize ourselves so we can become something that is transparent and predictable for all stakeholders – regardless of the administration or who is involved in it,” he concludes. “So far, we have done a great job but we must continue to do that.”