Rich Amodei-Sr. VP/Chief Strategic Growth Officer

STV Incorporated

METRO: How has the lack of a new transportation bill impacted your business and the industry?

Amodei: We know that, eventually, a new transportation bill will be authorized, however, until then the industry remains on edge, not knowing the exact commitment from the federal government for the next five-year period for transportation investments. This is exacerbated by the continued lull in the economy, where many public transportation agencies are cutting service, increasing fares and cutting their capital programs, given the lack of sustained local and state funding.

A long-term transportation bill will create, support and sustain jobs in the public transportation industry and serve as an economic engine for the nation's continued recovery. APTA estimates that for every $1 billion of investment in public transportation - 36,000 jobs are created, and this is one of the best reasons for reauthorization sooner than later. 

What impact has the new administration had on the industry?

The administration has had a very positive effect on the industry with the influx of ARRA funding, including high-speed rail funding that for the first time looks at a nationwide rail transportation plan with funding to get the ball rolling. The focus on high-speed rail and the current plan is sowing the seeds for an improved and world-class national rail infrastructure program, similar to the way the national interstate program began more than 50 years ago. 

Additionally, although the economy is still struggling, I believe the administrations' focus on transportation infrastructure, via ARRA, has bolstered the confidence of agencies and owners nationwide, as we have noticed a significantly increased activity level for new projects and opportunities nationwide, with numerous RFQ and RFP requests to a level that we have not seen in quite a while.

What is your outlook for the future of public transportation?

I believe the overall future for the public transportation industry has a very bright outlook over the long haul. There will be bumps along the way, but as a nation we have no choice but to continue to embrace and grow public transportation to efficiently transport the general public for both work and recreations. Although oil prices have been stable in the recent past, they will most definitely increase as we move forward. The high price of fuel will be considered by the public and one of their choices must be public transportation. We must also consider the environment and the benefits that using public transportation has.

Discuss growing industry trends.

We are seeing a real trend for LEED-certified design in many of our projects, including stations, intermodal centers and maintenance facilities for public transportation projects. We are also seeing a trend to the increased use of innovative project delivery, such as design/build and design/build/operate/maintain, for major and less complex infrastructure projects, where agencies are looking at all angles for productivity and efficiencies in design, construction and operation of new systems and infrastructure.

 


Jeffrey Boothe-Partner

Holland & Knight LLP

Are we any closer to getting a new transportation bill in place?

Boothe: At the earliest, SAFTEA-LU is extended until the end of the calendar year, but even then there doesn't seem to be any concerted effort by Congress or the Obama administration to get it done quicker than that - and there seems to be little or no momentum toward getting a long-term bill done. It's getting frustrating.

What impact has the Obama administration had on the industry?

The administration has done a lot of pretty innovative things that, at a policy level, have begun to point America toward the future, which is a decided shift in focus from the last 50 years. We've seen its commitment to high-speed rail, seeing it as the next technology to start moving us forward to being competitive with the rest of the world. At this point, the U.S. and Canada are the only two industrialized countries that don't have a high-speed rail network. It's important that they are moving us toward that future.

Secondly, this administration also recognizes that it's important to invest in metropolitan areas, since that's where the significant majority of the population lives, it is where the greatest challenge regarding congestion issues occur, where jobs are, and where housing is. The focus of investing in the metro areas, combined with a real commitment to livability and sustainability is defined by encouraging alternate forms of transportation to provide folks the opportunity to walk and bike to transit and be able to find an alternative to the automobile that is reasonably available.

What are the challenges to finding a funding source for the bill?

Let's just say, we've run out of our ability to do what we've done in the past. We haven't raised the gas tax since 1993. We've spent down the Highway Trust Fund balances. We've come up with every gimmick possible to justify the forwarding of the general fund monies into the Highway Trust Fund.

Frankly, the last effort by Congress, which was to transfer $20 billion from the General Fund into the Highway Trust Fund to sustain it, helps address the short-term issue of ensuring a flow of money. However, it also raises a long-term issue, which is the whole notion that the surface transportation program is sustained by user-fees now undermined, which is a good or a bad thing depending on how you want to look at it. The American public has been sold on the notion that the Highway Trust Fund, which is funded by the gasoline tax, pays for the system and it's apparent now that it doesn't. Consequently, the problem now is that surface transportation must compete with all the other functions of government, which are also funded out of the General Funds and in the current economy that means the ability to provide a lot of general funding to the program is constrained by the overall state of the economy. Without a dedicated funding source, it now has to compete with all other government priorities and that makes it really hard to provide the kind of investment that many advocates in the surface transportation industry feel are necessary to really invest in the nation's future.

 


[PAGEBREAK]Delon Hampton-Chairman

Delon Hampton & Associates

What role is high-speed rail going to have in the U.S.?

Hampton: I think high-speed rail has done a lot to upgrade the interest in public transportation. As far as real concern, the U.S. is kind of getting in the game late, but I think it will continue to spark interest and, if we can get it going and get it going well, I think it will bode well for this country.

We really need it because, for example, I grew up on trains when train riding was the thing in this country. I enjoyed it as a kid, even though I must admit, some of the accommodations weren't that good because there were still segregated trains at that time.

What impact will not having a bill in place have on the industry?

It will definitely slow things down. If the programs and money doesn't come, then the projects and jobs will not either.

What can the private sector do to help keep things moving?

I think it's just not what consultants can do, but what consultants in conjunction with the agencies and government can do. Together, we can do more from the standpoint of the management of these projects to get them off the ground faster and completed sooner, but that's going to take a joint-effort between both the public and the private sectors.

I'm not sure at this stage of the game that we, meaning both groups, really know where we're going or that we have enough cooperation to move forward in the most expeditious manner. We have to modify how we do business to be able to move on these things more quickly and more efficiently, taking into consideration contracting practices, how we actually do the jobs, design/build, and hiring the right program and construction managers. That's going to take some work. It's going to take some cooperation and understanding between the private and public sectors and, unfortunately, that's going to take time.

 


George Pierson-President/CEO

Parsons Brinckerhoff

What is your 'State of Industry?'

Pierson: It's actually a pretty fascinating time for public transportation. We have a number of competing dynamics. We have an administration that is very supportive for a variety of reasons, not the least of which is that it's a green technology. We have very high levels of public support for public transportation. We have very high ridership. Compared to historical trends it's a little bit down recently, but I think that has more to do with the recession than it has to do with public commitment to it, however, it still is much higher than it has historically been.

What is more telling is the public's acceptance and support to fund public transportation. If you look at the last year or so, 79 percent of the ballot measures intended to fund public transportation, in some manner or another, have passed, and often times they need two-thirds of the vote to pass.

The flipside of that is we have a transportation reauthorization bill that is stalled and some real question marks as to when that will get done, as well as in what form and how much.

So, we have an administration that is really supportive of public transportation, a public that is very supportive and willing to pay for it and, yet, a transportation bill that is in many ways a significant source of funding for that, stalled, which will impact projects.

How has the lack of a new transportation bill impacted your business and the industry?

Well, inevitably when you have a delay like that, you end up with an impact on projects. The basic reason you have a six-year authorization is so states and municipalities can plan long term, so they can know that funding is there.

With the uncertainty that comes from the lack of a long-term bill, there will be the uncertainty and unwillingness for states and municipalities to fund longer term projects. That doesn't mean there won't be any longer-term projects, as you know in public transportation more and more of the funding is now coming from local sources but, still, significant money is coming from the federal government. Without the certainty of a multi-year flow or a multi-year commitment to a project, it's more difficult to get larger projects off the drawing board to be built.

I think not having a bill will have more of an impact on the contractor side of public transportation than the consultant side, but it will impact us as well. Those agencies that are more savvy and have leadership that has seen this before believe that we will have a multi-year reauthorization, so while they may not commit long-term construction dollars, they are more likely to be willing to commit upfront consultant dollars either for studies, EIS or design.

What is PB's greatest challenge?

Our greatest challenge at the moment is finding the right key talent. Structurally, we're pretty much where we want to be. We think our client list and our client contacts and our reputation is very strong, and we're very well positioned in the markets we want to be in, especially when it comes to transit. The key, always, is finding enough of the right talent. This is a people business, and our challenge is always finding the right people and enough of the right people.

 


Jerry Premo-Executive VP/Global Transit Leader

AECOM

What will be the impact of not having an authorization bill in place?

Premo: It puts a damper on multi-year, large scale transit projects, in the sense that it's a little hard for a local authority to embark on a visionary project or program that's going to take a half a decade to a decade or more to deliver on, when we're dealing with six-month and nine-month increments.

The fact is, for 20 years we've had multi-year bills. We've always seemed to manage during these periods when one bill expires and another is yet to be authorized to make it through. Clearly, though, I think we end up with crisper and probably better decision making if it were possible to have a multi-year bill.

What can the private sector do to help keep things moving?

There are limits to what we can do. Our goal is to work with our partners in the public sector to get as many programs and projects within those programs 'ready to go.' What that means is that it's important for those of us who are in the planning, engineering, construction and program management areas to advance projects through design phases and have the environmental documents properly prepared so, when the really big money becomes available, everyone — the public sector, project sponsors and those of us supporting these programs — can advance the projects smartly and aggressively. That is really critical because, if we just march in place absent long-term funding and not advance these projects or programs, we're going to run into a credibility problem once the money is available.

Legislators are going to expect that construction will occur, that construction jobs will be created and projects will be completed sooner rather than later. But, if we don't advance these projects through this development phase, we're going to have that gap once the bill is passed.

One of the concerns I've had with ARRA is the focus on construction jobs. They are very important, because the construction industry has suffered, but we also need jobs in the development end of things. What I've had some concern about is that we've spent our money on short-term, needed capital projects, but I'm not sure in all cases that we've replenished the pipeline. Keeping that pipeline robust is very critical. We're not dealing with the idea that if you build a bus garage those are jobs, but if you advance a project through environmental and preliminary engineering stages you don't have jobs; they are not either/or.

What challenges is AECOM faced with?

Clearly, we're in the people business, so we are working aggressively to internally develop very talented people. We're working, on a global basis, to create information sharing in a way that we've never done before.

For example, we are working on a project as part of a joint venture to design a new tunnel between New York and New Jersey. There was a project that looks and sounds just like that in two different places in Australia, one in Brisbane and one in Melbourne. What we're doing is getting the sister offices engaged, so we can quickly and on a continuing basis share best practices back and forth between our global offices. We want to use technology and information sharing so that we can almost instantly create partnerships among people within AECOM. We are also trying to do some people swaps, particularly for younger people.

 


[PAGEBREAK]

Rick Simonetta-VP/National Director, High Speed Rail

URS Corp.

How has the lack of a new transportation bill impacted your business and the industry?

Simonetta: Without an authorization bill, transit agencies cannot implement their short- and long-range plans. This hurts all business sectors of the industry, from suppliers to consultants. Usually, suppliers are hurt immediately when agencies cannot purchase products and consultants are impacted later when plans are not initiated due to a lack of long-range funding.

Many are predicting a possible slowdown in projects; how can the private sector help?

We are all connected economically, so a slowdown in projects will have a definite impact. Public-private partnership (PPP) opportunities, where some private investment is included in a project, will work in certain situations.

What can the consultant industry do to help struggling public transportation agencies?

PPP opportunities as well as unsolicited proposals with a creative financing component may help in certain instances. Also, creatively scaling back projects or phasing projects over a longer period of time will be helpful in some instances.

What impact has the Obama administration had on the industry?

In my 40 years of working in the transit industry, I never heard a president mention mass transportation in a State of the Union address until this past January, when President Obama made significant mention of the need for greater investment in public transportation, including high-speed rail. The upcoming election and the next two years will be very telling as to whether we will continue to see an emphasis on investing more in public transportation.

What is your outlook for the future of public transportation?

Demand for public transportation of all types is higher than ever, with more people living in cities and being conscious of sustainability and quality of life. Any economic recovery will be positive for greater investment in public transportation, so I am optimistic that our future is very bright.


David Thomas- Sr. VP/National Director, Transit&Rail

Gannett Fleming

How has the lack of a new transportation bill impacted your business and the industry?

Thomas: The impact is significant, particularly when coupled with the challenging economic conditions we have at present. Transportation agencies are underfunded, yet transportation infrastructure needs continue to grow. In the short term, projects are few. Many projects have been delayed, deferred and even cancelled. Competition has increased across a smaller opportunity base. The impact is both serious and significant for our business and for the industry in its entirety.

What is Gannett Fleming's greatest challenge?

In these recessionary times, in times of great transportation infrastructure need in an underfunded environment, the uncertainty of the path forward is our greatest challenge. Our political leaders are nervous, our clients are understandably hesitant and, on an increasing basis, the best and brightest college graduates are turning away from careers in the engineering and construction industry in favor of other career paths. Our greatest challenge is to deal with this uncertainty and that will require leadership at all levels of industry and politics. I believe we know what to do and we must get on with it.

What is your outlook for the future of public transportation?

 I remain optimistic. The reality is this: The demand for mobility in the U.S. will only increase and, as it does, public transportation must be an essential component of the overall suite of solutions. Toward this end, industry and political leadership must collaborate more closely than ever to ensure that we meet the demands and provide high-quality, efficient and safe transportation solutions, including public transportation offerings, regardless of type and mode. For this to occur, our approaches to the wide variety of issues will require a great deal of flexibility and collectively we must be prepared to approach some issues differently. Challenging for sure, but it can be accomplished.

 


Alan Wulkan-Managing Partner

InfraConsult LLC

What impact has the Obama administration had on the industry?

Wulkan: The number one disappointment with this administration is that we don't have a reauthorization. Now, we have to keep that in perspective. We have never had a reauthorization in time, good times or bad. So, with all the priorities that this administration has been faced with, to me, the last two years for transit have been very positive. I say that because one, they did provide some recovery money for transit and they pushed the money out very quickly when it was available, which really did help in saving a lot of jobs to start; and two, the administration's emphasis on high-speed rail, regardless of whether you think high-speed rail is real or not.

Also, having transit mentioned in the State of the Union address for the first time in my lifetime shows that this administration has definitely put forth a new vision, a new agenda. It's really the best time in my 37 years in the transit business, from a public policy standpoint, for public transit. The dilemma is that the economy is so bad; it's also one of the most challenging times for public transit in my lifetime. That's a dichotomy we all face. But looking at the last two years, if this is the worst it gets from a public policy standpoint, you've got to be encouraged for the next two years and beyond.

Discuss growing industry trends.

The renaissance of rail is still continuing, if not growing. There are new rail projects in the works in Honolulu, and the continuation of rail projects in L.A., as well as big projects in New York and all across the country.

You are also seeing a general interest in public transit. Just before the economy turned down, we saw record ridership in transit. We're starting to see transit ridership come back faster than it would have in the past. Some communities are even continuing to see transit growth.

The trends are certainly in our favor. The more people are concerned over the energy crisis and the crisis in the Middle East, we continue to see people looking for alternative methods in, at least, choice of travel. More sustainability and the greening of America plays well into the transit issues, and that's a positive trend.

Do you think the industry will be able to maintain growth?

I do. There's no question that when unemployment spiked, ridership went down; there's a direct correlation, ­obviously. But, it didn't go down, in my judgment, precipitously, it went down with the trend of unemployment. When things start to get better and are getting better in some parts of the country, I really don't think we're ­going to see a deep falling back into the ridership of 10 or 15 years ago. I think we've held onto our base pretty well and that we're going to see a ­significant increase in ridership as the economy turns around.

 

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