Summary | Team | Federal Role | Current Environment | Process | Case Histories | P3 | Washington Letter on Transportation

With a new Administration and a new Congress taking the reigns of power in Washington at a most critical time, Carmen Group’s strong expertise in public-private partnerships (P3s) and transportation funding issues are in high demand—and for good reason.

Massive Infrastructure Development

The steep downturn in the economy over recent months has placed an extraordinary focus on what can be done quickly to create jobs and spur growth. Not surprisingly, massive new infrastructure development is at the forefront of the national agenda. This means finding maximum dollars for roads, bridges, transit systems, water systems, aviation, ports, and a host of related projects, where national needs are unquestionably broad. But determining which projects will get funded – and how – remains steeped in constantly changing Federal, state and new innovative public and private sector processes that remain obscure even too many stakeholders.

Stimulus Bill

Landmark economic stimulus and surface transportation bills will set policies to distribute up to a trillion dollars for infrastructure programs and projects over the next five years. At the same time, new mechanisms designed to tap private sources of capital for infrastructure are proliferating. Carmen Group knows how to help.

The Obama Administration, along with Congressional leaders, are signaling that they want to oversee the greatest new investments in transportation infrastructure since the establishment of the Interstate Highway program during the Eisenhower Administration. To do it, everything seems to be on the table: In the immediate economic environment, there will be significant deficit spending designed to create jobs and jump-start longer-term growth. Projects once considered not viable for immediate funding are now in a position to benefit.

SAFETEA-LU Reauthorization

Work continues on the most anticipated surface transportation bill in many decades. This bill will set key highway/transit policy and funding decisions for the course of the next 5 years. It will affect program and project funding at every level. Of special interest will be determining how P3 arrangements in the transportation arena are regulated and possibly constrained in the years ahead. Other key policy areas, including livable communities are also expected to be featured prominently in the final legislative package.

Finding New Transportation Revenue

In addition, existing transportation programs are expected to be revamped and supplemented. New programs will be created. Funding methods will be streamlined and expedited. And old and new revenue sources will be examined anew and exploited wherever possible.
The federal gas tax “user fee”, long the backbone of national and state transportation funding, will be the focus of intense new scrutiny. The current 18.4 cents-per-gallon Federal rate has not changed in 17 years while the purchasing power of its revenues has steadily eroded. As a result, some -- like the Congressional-mandated National Surface Transportation Policy and Revenue Study Commission -- are calling for significant per-gallon increases in the tax along with inflation indexing. But such increases still appear to be politically problematic within the halls of Congress.

Safety

Safety of the transportation system continues to be at the front and center of any discussion regarding transportation. Whether the discussion turns to recent automobile safety issues, aviation safety, transit safety or some other issue of safety involving a piece of the national transportation network, these all serve as reminders of the importance of ensuring that the transportation systems are safe. Congress and the Department of Transportation can be expected to take fresh looks at the safety systems and regulations governing all of the modes of transportation and new and additional legislation and regulations will likely be considered.

P3s to the Forefront

Instead, others will be emphasizing new freight and other transportation user fees along with a much greater reliance on tolls and public-private partnerships. Enormous sources of both foreign and domestic private capital (totaling up to over $400 billion by some estimates) are immediately available to help build new transportation infrastructure. Incorporating such sources into local, state and federal programs and projects requires unique expertise, new ways of thinking and coalition building, especially where public support is at stake. In many ways, a new day is dawning for transportation investment in America. Carmen Group can be your guide.