Growing Trend: Private Investment in Infrastructure and Transportation
Thursday, September 18, 2014

As P3 Bulletin, the New York Times and Richard Cavallaro, the new CEO of  international construction company Skanska’s US operations, have recently stated, the increase in private investment and Public Private Partnerships (PPPs or P3s) bodes well for the plans to develop and implement much needed infrastructure and transportation upgrades around the United States. As federal funds remain limited and difficult to secure, private investment may not only be the most efficient way to develop major infrastructure projects, but also the only economically feasible way.

The New York Times highlighted that the federal government has invested $11 billion since 2009 to develop high-speed rail within the US. Given the 25 year timeline, experts have expressed that the current pace of spending and development of high-speed rail must be accelerated. Among the issues that must be addressed is the failing infrastructure of tracks and bridges on which the new high-speed trains would need to run. Private investment to fund such infrastructure projects has been identified by the U.S. Department of Treasury as one means to augment the government’s investment. Private investors include philanthropic organizations such as the Ford Foundation and Rockefeller Foundation, who recently announced a joint investment of over $1 million to support innovative public-private partnerships for infrastructure. P3s are an effective and economical way to use private investment and enable public and private collaboration to bridge funding gaps and make infrastructure modernization plans possible.

Arrow Pointing Up

Planned rail projects in California, Texas and Florida involving private financing could be reflective of a growing trend of private investment in infrastructure and transportation in the U.S. South Florida continues to explore and expand the use of P3s in various sectors and create supporting legislation.  As P3 attorneys in South Florida, we have observed increased interest in and opportunity for P3 projects from the public and private sectors. Slated to become the largest P3 market in the world, an upward trend in the use of private investment in infrastructure and transportation projects could ensure that the U.S. joins the ranks of its Chinese and European counterparts, whose infrastructure and transportation advances far outpace those of the U.S.

 

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