President elect’s infrastructure plan calls for increase in P3s

President-elect Donald Trump has promised to make a $1 trillion in infrastructure investments a top priority for him as president. He reaffirmed that pledge in his Nov. 9 victory speech and signs point to public-private partnerships (P3/PPP) as a significant component to his infrastructure plan.

“We are going to fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals. We’re going to rebuild our infrastructure, which will become, by the way, second to none. And we will put millions of our people to work as we rebuild it,” said Trump.

Some of the infrastructure policies laid out by Trump include:

  • a deficit-neutral plan for new infrastructure investments;
  • supporting investment in transportation, clean water, a modern and reliable electricity grid, telecommunications, security infrastructure, and other pressing domestic infrastructure needs;
  • offering maximum flexibility to the states;
  • creating thousands of new jobs in construction, steel manufacturing and other sectors;
  • leveraging new revenues and working with financing authorities, P3s and other prudent funding opportunities;
  • implementing a bold, visionary plan for a cost-effective system of roads, bridges, tunnels, airports, railroads, ports and waterways and pipelines in the tradition of President Dwight D. Eisenhower;
  • linking increases in spending to reforms that streamline permitting and approvals; and
  • linking increased investments with positive reforms to infrastructure programs that reduce waste and cut costs.

An initial move by the president-elect to see those policies through was to name Martin Whitmer to his transition team to oversee transportation and infrastructure. Whitmer is the chairman of a Washington law firm which lobbies for the Association of American Railroads and the National Asphalt Pavement Association. He was previously deputy chief of staff at the U.S. Department of Transportation.

Just prior to the election, Trump economic advisors Wilber Ross and Peter Navarro released a report detailing his infrastructure plan. The plan calls for spending $1 trillion over ten years with much funding provided by private contractors. These contractors would be incentivized to invest in infrastructure projects through federal tax credits and usage fees, such as tolls. The plan would add nothing to the national debt. Investors would receive an 82 percent tax credit on equity invested in infrastructure paired with federally subsidized loans at a 5-to-1 leverage ratio.

Experts are divided on the practicality of the plan with some calling it a step in the right direction and others offering criticisms. Some economists said the tax cuts would indeed add to the deficit in the long run. Others pointed to projects that would not be appropriate for usage fees. Critics have also said that congress has not been as interested in infrastructure as Trump seems to be and he might face some resistance in getting legislation passed to support his plan.

With or without the support of the president-elect or congress, P3s have been gaining momentum in recent years. The National Law Review recently published an article detailing three factors spurring the popularity of the model. The need to repair aging infrastructure in the U.S. has continued to grow. Public funds for improvements have been diminishing. Lastly, P3s success stories in the U.S. and abroad have become widely known.

Trump’s focus on infrastructure, and the use of P3s to meet infrastructure needs, can only serve to increase awareness of critically needed improvements.


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Electric vehicle corridors designated in 35 states

White House officials announced 48 national electric vehicle (EV) charging networks will be established on nearly 25,000 miles of highways in 35 states. State officials, utilities, automakers and EV charging companies have partnered on the initiative to jump-start charging station construction on designated corridors. Charging stations are expected to be constructed every 50 miles and Federal Highway Administration officials unveiled new roadside signs to help motorists find the stations.

“Alternative fuels and electric vehicles will play an integral part in the future of America’s transportation system,” said U.S. Transportation Secretary Anthony Foxx.  “We have a duty to help drivers identify routes that will help them refuel and recharge those vehicles and designating these corridors on our highways is a first step.”

A list of Alternative Fuel Corridors, which includes those designated for EVs, can be found here.

Officials said one reason EVs have not been adopted in great numbers is the difficulty in locating charging stations. The number of EV charging stations in service has grown from about 500 in 2008 to more than 16,000. Recently, 24 state and local governments have agreed to buy hundreds of additional EVs for government fleets.

Los Angeles officials plan to purchase 50 percent of all new light-duty vehicles as battery EVs by 2017 and 80 percent of municipal fleet procurements by 2025. The city’s electric fleet is slated to reach over 400 battery EVs and 155 plug-in hybrid EVs by the end of 2017. About $22.5 million dollars will be spent on electric vehicle charging stations by June 2018, adding to existing stations for a total of 1,500 city-wide.

In Vermont, 50 percent of the state motor pool will be converted to plug-in electric vehicles by the end of 2017. The state will also convert 10 percent of its centralized light-duty fleet to EVs and install one dedicated charging port for each of these vehicles.

Minnesota officials have developed a fleet action plan to integrate EVs, hybrid EVs and zero emission vehicles. The state plans to purchase 25 of these vehicles in 2017 and install 15 charging stations.

The City of Atlanta is encouraging public adoption of electric vehicles and installing charging stations in 100 dedicated EV parking spaces at the Hartsfield Jackson Atlanta International Airport by the end of 2016. The city committed to converting 20 percent of its municipal fleet to electric vehicles by 2020.

In Detroit, city officials plan to purchase 10 percent of service vehicles as plug-in electric in 2017. They also set a goal to purchase EVs as 10 percent of light-duty replacement vehicles. Low-speed EVs will also be used for transit police and safety and security staff.


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USDA funds water infrastructure for 168 towns

The U.S. Department of Agriculture (USDA) has announced $283 million in funding for water and waste infrastructure for 168 small towns as part of the Water and Waste Disposal Loan and Grant Program. The program provides assistance and financing to develop drinking water and waste disposal systems for communities with 10,000 or fewer residents.

“Strong infrastructure is critical to keeping America’s communities of all sizes thriving, and USDA is proud to partner with the National Rural Water Association to help improve the livelihood of our smallest towns by providing access to reliable water and wastewater systems,” said Agriculture Secretary Tom Vilsack. “Projects like these are critical to the economy, health and future of rural America, and today 19 million residents now have improved water and wastewater services in their communities thanks to investments USDA has made since 2009.”

Vermont’s Town of Williamstown will receive an $884,000 loan and $1,277,000 grant to upgrade the town’s water treatment facility. The funds will be used to increase efficiency and reduce environmental impact.

The town of Orleans, N.Y., will receive a $500,000 grant. The grant will be added to state funds to help install a water line to provide clean drinking water to residential wells contaminated by salt.

In Florida, Jacob City will receive a $30,000 USDA technical assistance grant to study possible improvements to the city water system. The city will use the funds to pay for an engineering report to evaluate the system

The largest loan announced under the program will go to the city of Monticello, Ill. It will receive a $14.3 million USDA loan to construct a wastewater treatment plant. The funding will help the city expand its sewage capacity for its 5,500 residents and comply with environmental regulations.

One of the program recipients, the Mt. Olive Water Association in Mississippi, was one of the first applicants to use Rural Development’s new online application system, RD Apply. The new process allows applications to be submitted anywhere in the country via the internet.  Mt. Olive will receive a $297,000 loan and a $238,000 grant for a water storage tank, fire hydrants and a generator.

Click here for a full list of funded projects.


Want to read more stories like this one? Check out the most recent editions of Government Contracting Pipeline and Texas Government Insider. SPI’s government contracting consultants assist firms of all types in selling to governmentContact them today.