Infrastructure Bill Aims to Incentivize Private Investment
The Building and Renewing Infrastructure for Development and Growth in Employment Act, the BRIDGE Act, would create an independent infrastructure financing authority to provide loans for state and local infrastructure projects, said sponsor Senator Mark Kirk, R-Ill., in a press release following the legislation’s Nov. 14 introduction (here). Senators Mark Warner, D-Va., and Roy Blunt, R-Mo., co-sponsored the bill. The initial $10 billion in funds given to the financing authority could foster $300 billion in total project investment through incentivizing private sector involvement in infrastructure projects, said the release. The law aims to accomplish the following, according to Kirk:
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- Projects would have to be at least $50 million in size, and be of national or regional significance to qualify. Five percent of the financing authority’s overall funding would be dedicated to projects in rural regions, and rural projects would be required to be $10 million in size.
- The financing authority would finance no more than 49 percent of the total costs of the project in order to avoid crowding out private capital. Loans and loan guarantees would be subject to modest additional fees, which will allow the Authority to quickly become self-sustaining over time.
- Having project finance experts in-house will help states and localities go toe-to-toe with private sector partners to ensure that taxpayers are getting good value for their investments through public-private partnerships. The financing authority would operate independently of existing federal agencies, led by a Board of Directors with seven voting members and a CEO, all of whom would be required to demonstrate proven expertise in financial management and be confirmed by a vote of the Senate.
“This legislation is a positive step toward increasing investment in our nation’s critical infrastructure, which includes ports and the road, rail and water connections with them,” said American Association of Port Authorities (AAPA) President and CEO Kurt Nagle in a press release (here). “AAPA is very concerned that the inadequate and deteriorating condition of America’s transportation system -- particularly the portion responsible for freight movement -- threatens our country’s ability to remain globally competitive.”
The U.S. spends 2 percent of GDP on infrastructure, said Kirk, far below the Chinese 9 percent of GDP expenditure and the European 5 percent expenditure. President Barack Obama highlighted the need for infrastructure improvement at a Nov. 8 speech in New Orleans (see 13110828).