Push for Infrastructure Investment Creating Jobs
Investment in America’s infrastructure is a hot topic in Washington and on Wall Street. Politicians and investors alike are feverishly pushing for new methods in which the federal government can finance infrastructure more effectively, with a combination of public and private capital. Already, investors around the world are seeking out opportunities in infrastructure. As a result, executive search firm, A.E. Feldman, says infrastructure finance jobs are opening up for candidates with backgrounds in investment banking as well as experience in analyzing and executing structured financings. The most sought after candidates are those with experience in infrastructure transactions and environmental engineering.
On Capitol Hill
House Speaker, Nancy Pelosi, says public-private partnerships are not only here to stay, but they are likely to grow in importance. Pelosi is calling for “substantial” investment in infrastructure to mitigate the effects of an economic slowdown, according to Reuters. In a recent speech before the Regional Plan Association, Pelosi said investment in the nation’s infrastructure would have a “stimulative effect,” and she raised the possibility of creating a federal infrastructure bank. The debt-selling bank would be an independent federal entity that would evaluate major projects and use various financial tools to fund them. Pelosi also predicts the nation will see more public-private partnerships, though safeguarding taxpayers remains a top concern.
The idea of a centralized infrastructure bank is not new. Senators Chris Dodd and Chuck Hagel, introduced The National Infrastructure Bank Act, back in August 2007. The legislation would establish the National Infrastructure Bank - an independent entity of the government tasked with evaluating and financing capacity-building infrastructure projects.
The bill would effectively create a public-private partnership agency tasked with expanding the role of the federal government in creating massive public works projects. The bank would encourage local public agencies to “partner” with private for-profit entities to develop projects worth at least $75 million each.
Senator Dodd explains that, “It [the bill] targets specifically large capacity-building projects that are not adequately served by current financing mechanisms. The proposed Infrastructure Bank Act also will increase the ability of the private sector to play a central role in infrastructure provision.”
“The legislation we are introducing establishes a new system through which the federal government can finance infrastructure projects by leveraging private and public capital to fund large projects that are vital to our country. This legislation provides a new model for prioritizing the building and maintenance of our national infrastructure,” according to Sen. Hagel.
The US Senate Committee on Banking, Housing, and Urban Affairs held a hearing to promote the legislation on March 11. Representatives from CSIS, the American Society of Civil Engineers, Goldman Sachs and the AFL-CIO all testified in favor of the idea.
On the Web
The nation’s crumbling infrastructure is fast becoming a priority in Washington. The U.S. Department of Transportation’s Federal Highway Administration has also launched a webpage dedicated to public-private partnerships (PPP). The FHWA says it has developed the new content in response to the growing interest in capitalizing on new forms of partnerships between the public and private sectors to plan, finance, build and operate the nation’s transportation infrastructure.
The FHWA also highlights a number of recent infrastructure projects which have benefitted from one or more forms of PPPs, including the Hiawatha Light Rail Transit, the Anton Anderson Memorial Tunnel, Texas State Highway 130 and the Las Vegas Monorail.
On the Campaign Trail
U.S. Democratic presidential contender, Hillary Clinton, announced a plan to create three million new jobs through investments in the nation’s infrastructure. Last summer she offered a “Rebuild America” plan of her own that included a $10 billion “emergency repair fund” to fix deteriorating roads, bridges, seaports and other facilities. Clinton also signed on to co-sponsor Senator Dodd and Senator Hagel’s National Infrastructure Bank Act back in August 2007.
Clinton’s rival, Barack Obama, has followed suite. In February 2008, Obama called for the creation of a “National Infrastructure Reinvestment Bank” that would invest $60 billion over 10 years in highways, technology and other projects. Obama says it would be an effort to “rebuild America” and create two million jobs in the process.
