Ed. note: This is cross-posted on the U.S. Department of Transportation's blog. See the original post here.
We all know the “road to prosperity” is a metaphor, but what if it were an actual road?
The fact is, investing in transportation creates value, and that means it’s a worthwhile investment — for public funds, yes, but also for the private sector. So, with public investments in our nation’s important transportation assets steadily declining, we need to find better ways to partner with private investors to help rebuild America.
And rebuild America we must. The American Society of Civil Engineers predicts that we’ll face a $1 trillion funding gap for transportation by the end of the decade. More than two-thirds of American roads are in less than good condition, and if you lined up all of the structurally deficient bridges in the country, they would stretch from Boston to Miami.
It might save money up front for legislators to ignore our infrastructure deficit, but you are paying the price for this head-in-the-sand approach to transportation every day. You pay it in longer commute times — 5.5 billion hours annually — higher vehicle repair costs, and increased spending on wasted fuel. It’s not small change; the extra fuel and lost hours cost Americans about $120 billion a year. And the businesses of our nation pay as well, in additional freight costs to the tune of $27 billion a year.
Since his first day in office, President Obama has understood the importance of rolling back this infrastructure deficit, and investing in transportation has been a cornerstone of his economic policies.
That’s why earlier this week, along with our partners at the Treasury Department, we held an infrastructure investment summit in Washington, D.C. to mobilize private-sector investment capital, uncover new financing approaches, and accelerate project development. The meeting brought together leading institutional investors, international asset managers, and project developers. Collectively, those gathered represent more than $50 billion in projected capital investment in the U.S. infrastructure market over the next five years.
And I’m pleased to say, we’re off to a good start.
We had productive discussions on a wide range of topics from “Generating a Pipeline: Convincing investors that the Public-Private Partnership market is robust” to “Increasing Efficiency and Certainty around Permitting; Improving Outcomes for Communities and the Environment” to “Augmenting the Role of Pension Funds in U.S. Infrastructure” and “Maximizing use of Federal credit and technical assistance programs.” You can view a full list of sessions here. The sessions sparked a number of important conversations, and I am confident these will lead to lasting and thought-provoking collaborations.
A number of participants identified next steps, and we’ll be excited to keep the lines of discussion open and to hear about their progress. For example, the Ford Foundation and Rockefeller Foundation announced that they are coming together to fund joint investment of over $1 million to support innovations in U.S. infrastructure. The new partnership will expand the infrastructure pipeline by incubating innovative public private collaborations, including a predevelopment fund for innovative projects and public-private partnerships. By demonstrating the benefits of predevelopment funding, the partnership will help build the case for increased predevelopment funding from states and from the federal government.
In an exciting step toward developing technology solutions that support intelligent, resilient, and sustainable infrastructure, Carnegie Mellon University announced that it will be creating Metro 21, a consortium of research universities focused on technology solutions for their region’s infrastructure and urban systems.
We are also moving forward on several steps to identify a pipeline of promising infrastructure projects. Treasury announced that they will be commissioning an independent, third-party research report highlighting the country’s top 25 or 50 most economically significant proposed transportation and/or water infrastructure projects, highlighting the importance of a strong national infrastructure for competitiveness and economic growth. Many of these may emerge as good candidates for PPPs. And, this week, I sent a letter to governors, as well as many mayors and heads of metropolitan planning organizations to let them know about the Build America Investment Initiative and to ask them for their help and partnership in identifying specific transportation infrastructure projects that could be good candidates for innovative financing. You can read that letter here.
Of course, the Obama administration will continue acting where possible to address our infrastructure deficit. And the President will continue to call on Congress to bring a renewed measure of strength and stability to the Highway Trust Fund by acting on his four-year, fully funded, transportation proposal that will allow states, counties, and communities to plan the projects we need to begin tackling this critical challenge.
But only together can we lay the foundation for a brighter, more prosperous future.