Bus

Pub Perspective: Barriers to private participation in 2014

Posted on November 19, 2013 by Frank Di Giacomo, Publisher

In the last issue, I mentioned one of the more interesting sessions at this year’s APTA Annual Meeting was the private sector financing session in which investors, lenders and private project sponsors described what they look for in projects to get involved. As I said, it was clear U.S. public transportation lags behind other countries and even other U.S. industry sectors. What was also clear, though, is that current federal government policy is doing nothing to play catch-up, despite the fact that now more than ever, we need to close the gap with the rest of the world.

Key ingredient missing: certainty
It was clear from this session and comments of others engaged in public-private partnerships (P3s), the best deals are those where the roles and responsibilities as well as sources of payments in the contracts are clearly defined and predictable. Those that are less so result in more risk each side may have to take on. And for the private sector companies involved in these contracts, higher or unclear risk almost always means a higher price to cover the greater perceived risk.

For both a Congress and an Administration that agree they should encourage more private sector investment in infrastructure development, they almost could not undermine this goal any more if they tried. Thanks to the shutdown, uncertainty about future solvency of the Highway Trust Fund and Mass Transit Account, and general uncertainty about the next appropriations and authorization bills, there is little wonder why there is as much talk about P3s as there is.

Plenty of evidence suggests P3s and other ways to attract private capital can expand infrastructure investment. Denver’s Eagle P3 Commuter Rail Project and the various state infrastructure banks are examples of this proven success. Bills have already been written and introduced to make this happen — but Congress needs to act for a change.

End the gridlock
One way to start is for both sides on Capitol Hill to agree to end the gridlock and pass a budget for the rest of this fiscal year and next, before the government shuts down again.  If they agree to a number, even one only for transportation, then it will become clear they will have to find tax revenues to fund that number, because the Trust Fund is broke. If the genie comes out of the tax bottle, then passing policies to attract private financing become doable.

Trillions of dollars are sitting on the sidelines, or in accounts overseas, looking for an investment climate with some certainty in it. One of those investments could be public transportation, with hundreds of thousands of jobs created as a result, if our elected officials would only do their jobs.

View comments or post a comment on this story. (0 Comments)

More News

Stertil-Koni reports record 2014 sales, honors top distributors

Company President Dr. Jean DellAmore saluted the efforts of the entire Stertil-Koni distributor network at its recent annual meeting and welcomed twelve companies into the company’s highly acclaimed “Million Dollar Club.”

Antelope Valley Transit experiments with digital bus ads

Other cash-strapped California transit agencies, facing rising operating costs, are watching the potentially lucrative test run with interest, as current state law restricts digital signage on buses to route and service information.

Calif. purchase incentives now available for New Flyer electric buses

The Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project was created by the California Air Resources Board to speed the early market introduction of clean, low-carbon hybrid and electric vehicles and is administered and implemented through a partnership with CALSTART.

REI receives New Flyer's gold 'Supplier' award

The company was recognized for exceeding delivery expectations for the fourth year in a row.

Luxury bus Leap Transit shut down for operating illegally

The startup was recently granted what’s known as the “authority to operate” — a precursor to an official license. But by driving its route between the Marina district and the Financial District without a license, regulators determined that Leap was breaking the law, according to SFGate.

See More News

Post a Comment

Post Comment

Comments (0)

More From The World's Largest Fleet Publisher

Automotive Fleet

The Car and truck fleet and leasing management magazine

Business Fleet

managing 10-50 company vehicles

Fleet Financials

Executive vehicle management

Government Fleet

managing public sector vehicles & equipment

TruckingInfo.com

THE COMMERCIAL TRUCK INDUSTRY’S MOST IN-DEPTH INFORMATION SOURCE

Work Truck Magazine

The resource for managers of class 1-7 truck Fleets

Schoolbus Fleet

Serving school transportation professionals in the U.S. and Canada

LCT Magazine

Global Resource For Limousine and Bus Transportation

Please sign in or register to .    Close