may 2006 revise
TRANSCRIPT
The Performance Infrastructure Review Committee(PIRC) is a bipartisan committee of individuals withexpertise in federal policy, infrastructure development,and project finance. Over the past six months, PIRC hasreviewed numerous concepts pertaining to how infra-structure is financed. The objective has been to develop ashortlist of those options that seem to have the greatestpromise in terms of political practicality, budget afford-ability, and investment.
PIRC has favoredfinancing proposals thatbuild upon prior experi-ence. In evaluating differ-ent policy options, PIRCused the “three-leggedstool” theory of design:Each financing tool must meet the differing needs of theBorrower (offering lower cost or other advantages), theInvestor (providing a competitive risk-adjusted rate ofreturn), and the Federal policy maker (having a manage-able, scored budgetary cost and adhering to fundamen-tal public policies). If any one of the stool’s three legs is“wobbly” the approach will not be effective.
Thus far, PIRC has identified five new infrastructureinvestment policy tools that it believes could be of partic-
ular value in the current debate over how to boost spend-ing:
• Authorizing a Critical Asset Procurement Reform(CAPR) Program for Federal Assets—using aDesign-Build-Finance approach for certain majortypes of direct Federal investments such as Corps ofEngineers water resource projects, VA hospitals,
GSA buildings, andFederally-owned trans-portation assets (see page5);
• Authorizing InfrastructureCredit Bonds for PublicInfrastructure—implement-ing an enhanced $100-billion
zero-interest tax credit bond program for state/localand P3 projects that would be suitable for pension fundinvestment (see page 11);
• Providing Performance Incentive InnovationGrants—making grants available for pre-develop-ment planning and up to 20% of capital costs of bothP3 and governmental projects that incorporate life-cycle costing mechanisms to ensure sustained assetperformance (see page 15);
April 2017Volume 325
The Journal of Recordfor public-private partnerships.
Published monthlysince 1988
PWFinance.net
BUDGET FRIENDLY TOOLS TO BOOST INFRASTRUCTURE FINANCEby the Performance Infrastructure Review Committee (PIRC)
PIRC’s proposed financing toolscould help produce 7.5 million jobsand $575 billion in capital invest-ment over 10 years with a budgetcost of only $55 billion.
Special Report on Financing U.S. Infrastructure
Note to Congress: Infrastructure finance practitioners show how to create $575 billion in newcapex over 10 years with a budget impact of only $55 billion.
Asset Recycling: Transportation policy leader RobertW. Poole Jr. lays out a plan for drawing hugeamounts of institutional investment into upgrading critical assets.
Don’t Toll the Interstates: Renowned travel behavior expert Alan E. Pisarski offers five good rea-sons not to toll the Interstate highway system.
Road Usage ChargingWon’tWork: The reality is that people hate it, says Jeff Buxbaum, consultantlead for theWashington State Transportation Commission's road usage charge investigations from2012-2015
For Dan Flanagan’s life-long work to promote private invest-ment in public works infrastructure, Public Works Financing thismonth has elected to name PIRC’s infrastructure credit bondthe “Flanagan Bond”.
Given his dauntless optimism, PIRC’s co-chairman Daniel V.Flanagan Jr. is the right person to help carry this zero-interestbond idea and the rest of PIRC’s proposals in the halls ofCongress, we believe. If he succeeds, the P3 market in the U.S.will flourish and performance-based infrastructure will gain realtraction.
Some of the concepts put forth by PIRC in this month’s spe-cial report had their genesis in an earlier report authored byFlanagan in 1993 when he was chairman of the Commission toPromote Investment in America’s Infrastructure.
Among the commission’s recommendations: offering newlending and credit enhancement programs; promoting projectfinance; establishing a National Infrastructure Corporation withthe ability to fund project development; and creating a new typeof infrastructure security under the tax code that would be suit-able for retirement fund investment. The TIFIA credit assistanceprogram was proposed by Flanagan’s commission and gainedpassage in the TEA-21 highway reauthorization in 1998.
From Flanagan’s work and other efforts to create a nationalinfrastructure policy, PIRC members have thus far identifiedfive infrastructure investment policy tools. These initiatives arediversified in terms of both the delivery approach (federal,state/local and public-private partnerships) and the types ofpolicy tools (regulatory reforms, tax incentives, credit assis-tance and grant incentives).
Flanagan believes the time has come for a coordinated feder-al approach to financing infrastructure. “This special issue ofPublic Works Financing, which was founded nearly 30 yearsago by my old friend and fellow stalwart Bill Reinhardt, comesat a key moment when the opportunities for enacting new feder-al incentives for infrastructure investment look highly promis-ing.”
PIRC Members
Joining Flanagan as co-chair of the PerformanceInfrastructure Review Committee is Dan Carol, the foundingchair of the West Coast Infrastructure Exchange. He hasrecently taken a post as Senior Advisor on Infrastructure andEnergy to California Governor Jerry Brown. Carol teaches infra-structure finance in Georgetown’s Planning and Real Estate pro-gram, and is a Non-Resident Senior Fellow at Georgetown’sBeeck Center for Social Innovation.
Other members include:
Elaine Buckberg, a principal at The Brattle Group, holds aPh.D. in Economics from MIT and an undergraduate degreefrom Yale University. Before joining Brattle, Dr. Buckberg servedas deputy assistant secretary for policy coordination at the U.S.Treasury Department’s Office of Economic Policy, where shehelped create the Build America Investment Initiative on infra-structure, including authoring two white papers on public-pri-vate partnerships.
Judson Greif, of Greenfield Governmental Strategies, is aDeputy Director at the US Water Alliance, where he is responsiblefor managing a number of projects including policy developmentand stakeholder engagement around comprehensive water man-agement and water infrastructure investment in the United States.
2 Public Works Financing/April 2017
THE TIME IS RIPE FOR “FLANAGAN BONDS”
• Standardizing tax code provisions for Private ActivityBonds—creating a “level playing field” for public infra-structure projects with private sector participation (seepage 16) ; and
• Strengthening the platform for Federal CreditAssistance—consolidating existing and any new Federalprograms so that project underwriting and credit surveil-lance are consistent across all sectors of public infrastruc-ture (see page 18).
In addition to these financial tools, PIRC recognizes thatinstitutional innovation including regional approachesmay be required to address certain infrastructure needs.We recommend that Congress authorize states to forminterstate/multistate compacts to help develop major pro-jects and potentially even pool and securitize revenuestreams, where appropriate.
Each of PIRC’s proposed financing programs has beensized according to what we believe are realistic objectivesover 10 years, taking into account existing capital spend-ing activity and institutional capacity constraints. Whilewe think our quantification assumptions are reasonablyaggressive, we do assume some significant growth in pro-jects being advanced to the financing stage. The table onp. 4 provides a high-level summary of each recommenda-tion in terms of the program’s potential investment vol-ume, its estimated budgetary cost, and a reasonable esti-mate of the “net investment effect” (incremental capitalinvestment achievable).
Importantly, PIRC’s recommendations do not necessari-ly reflect the views of the committee members’ organiza-tions. �
Public Works Financing/April 2017 3
Bryan Grote, of Mercator Advisors LLC, works with govern-ments to implement transportation policies and finance pro-grams. Previously, he coordinated legislative proposals, financialpolicies, and new programs for the USDOT, including the designand implementation of the TIFIA credit assistance programwhere he was the first director. He was a member of theNational Surface Transportation Infrastructure FinancingCommission, which recommended a transition to a VMT feesystem in its 2009 report to Congress.
Bill Hanson, of Great Lakes Dredge & Dock Co., joined theCompany in 1988 as an Area Engineer in its Staten IslandDivision Office. He began his career with the U.S. Army Corps ofEngineers in Galveston, Texas and Los Angeles. He is currentlythe President of the Western Dredging Association and is aboard member of several industry trade associations.
Bill Newman, Senior Advisor at HC Project Advisors LLC,helped to gain passage of the Staggers Rail Act while serving ascounsel to the House Energy and Commerce Committee. Hesubsequently ran the Washington office for Conrail before itsprivatization in 1987. His current work involves financing alter-natives for large water infrastructure projects.
John Ryan, a Principal of InRecap LLC, is a project andstructured finance specialist focused on infrastructure debtalternatives. He is a Visiting Fellow at the Global Projects Centerof Stanford University.
David Seltzer, of Mercator Advisors, has over 35 years ofexperience in public and project finance as a private banker, asco-founder of Mercator Advisors, and as in-house financialadvisor to the Federal Highway Administrator. His work includ-ed development and implementation of “innovative financing”
initiatives, including TEA-21 finance provisions (1996-1999).He played a central role in conceptualizing and implementingUSDOT’s TIFIA credit program. �
Editor/PublisherWilliam ReinhardtPeterborough, NH (908) [email protected]
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Public Works Financing nnooww ppuubblliisshheedd ffrroomm PPeetteerrbboorroouugghh,, NNHH
PIRC
’s Re
com
men
ded
Finan
cing T
ools
(Pro
gram
Vol
ume,
Bud
get I
mpa
ct an
d In
vest
men
t Act
ivity
ove
r 10
Year
s)
($ B
illio
ns)
Pr
opos
al
Pote
ntia
l Pr
ogra
m
Volu
me
Est.
Budg
et
Cost
Net
Inve
stm
ent
Effe
ct
De
scrip
tion
of B
udge
t Cos
t and
Inve
stm
ent E
ffect
Ass
umpt
ions
Criti
cal A
sset
Pr
ocur
emen
t Re
form
(CAP
R)
Prog
ram
for
Fede
ral A
sset
s
$ 6
0
$
0
$ 4
0 (n
et)
The
estim
ated
net
inve
stm
ent e
ffect
of $
40 b
illio
n is
low
er th
an th
e $6
0 bi
llion
aut
horiz
ed p
rogr
am
size
for 2
reas
ons:
Part
of t
he re
duct
ion
refle
cts a
ccum
ulat
ed in
tere
st e
xpen
se d
urin
g co
nstr
uctio
n th
at is
take
n ou
t with
per
man
ent f
inan
cing;
the
bala
nce
is at
trib
utab
le to
the
fact
that
par
ticip
atin
g Fe
dera
l age
ncie
s will
hav
e to
redu
ce p
ay-a
s-yo
u-go
capi
tal o
utla
ys fo
r oth
er p
roje
cts i
n la
ter y
ears
to
acco
mm
odat
e an
nual
deb
t ser
vice
pay
men
ts.
No in
crem
enta
l bud
get s
core
is a
ssig
ned
beca
use
the
cost
(ann
ual d
ebt s
ervi
ce a
nd a
ny a
nnua
l per
form
ance
pay
men
ts) i
s ass
umed
to b
e fu
nded
from
w
ithin
curr
ent a
nnua
l spe
ndin
g le
vels
of th
e pa
rtici
patin
g ag
encie
s.
Infra
stru
ctur
e Cr
edit
Bond
s (IC
Bs)
10
0
20
10
0
This
prog
ram
wou
ld a
utho
rize
$10
billi
on p
er y
ear o
f qua
lifie
d ta
x cre
dit b
onds
ove
r 10
year
s for
$10
0 bi
llion
of p
roje
cts t
hat a
re a
ssum
ed to
be
entir
ely
debt
-fina
nced
. Ann
ual n
onre
fund
able
tax c
redi
ts
pay
for 1
00 p
erce
nt o
f int
eres
t cos
t. Th
e es
timat
ed b
udge
t cos
t rep
rese
nts t
ax cr
edits
(tax
ex
pend
iture
s) g
rant
ed o
ver t
he fi
rst 1
0 ye
ars (
budg
et w
indo
w).
Perfo
rman
ce
Ince
ntiv
e In
nova
tion
(PII)
Gr
ants
2
0
20
90
This
prog
ram
wou
ld o
ffer g
rant
s for
PII
proj
ects
cove
ring
up to
20%
of p
roje
ct co
sts i
n or
der t
o re
duce
th
e co
st o
f cap
ital f
or b
oth
gove
rnm
enta
l and
P3
proj
ects
adv
ance
d in
acc
orda
nce
with
est
ablis
hed
life
cycle
per
form
ance
stan
dard
s. $
2 bi
llion
of g
rant
fund
ing
wou
ld b
e m
ade
avai
labl
e ea
ch y
ear f
or
10 y
ears
, with
5-1
0% se
t asid
e to
hel
p fu
nd P
II pr
ojec
t pre
-dev
elop
men
t cos
ts.
No in
vest
men
t effe
ct
is at
trib
uted
to th
e pl
anni
ng g
rant
s.
Stan
dard
ized
Priv
ate A
ctivi
ty
Bond
s (Q
PIBs
)
100
(n
o fo
rmal
vo
lum
e ca
p)
5
70
(net
)
Ther
e w
ould
be
no fe
dera
l vol
ume
cap
on th
e pr
ogra
m, b
ut th
e $1
00 b
illio
n pr
ogra
m si
ze e
stim
ate
conf
orm
s to
assu
mpt
ions
use
d by
the
Join
t Com
mitt
ee o
n Ta
xatio
n in
its a
naly
sis o
f QPI
Bs.
The
net
inve
stm
ent a
ctiv
ity is
som
ewha
t low
er th
an th
e gr
oss p
rogr
am v
olum
e be
caus
e a
port
ion
of th
e in
duce
d PA
B vo
lum
e is
eith
er re
flect
ed in
the
debt
por
tion
of th
e PI
I Gra
nts i
nves
tmen
t est
imat
e ab
ove
or is
ass
umed
to b
e a
subs
titut
ion
for d
ebt o
f pro
ject
s tha
t wou
ld h
ave
been
fina
nced
by
othe
r m
eans
in a
ny e
vent
.
Stre
ngth
ened
Pl
atfo
rm fo
r Fe
dera
l Cre
dit
100
10
275
(ne
t)
It is
assu
med
that
a n
ew in
frast
ruct
ure
fund
ing
auth
ority
wou
ld re
ceiv
e $1
0 bi
llion
of s
tart
-up
capi
tal
to su
ppor
t the
cred
it su
bsid
y co
sts o
f $10
0 bi
llion
of n
ew fe
dera
l inf
rast
ruct
ure
lend
ing
over
10
year
s.
[Thi
s wou
ld b
e ov
er a
nd a
bove
curr
ent f
eder
al cr
edit
prog
ram
act
ivity
for p
ublic
infra
stru
ctur
e (R
US,
TIFI
A, R
RIF,
WIF
IA, e
tc.)
of $
10-1
5 bi
llion
per
yea
r.] A
ssum
ing
a m
axim
um fe
dera
l sha
re o
f 33%
(s
imila
r to
TIFI
A) p
rodu
ces t
otal
new
capi
tal i
nves
tmen
t of a
bout
$30
0 bi
llion
. Ho
wev
er, i
t is a
ssum
ed
that
abo
ut $
25 b
illio
n of
the
activ
ity w
ould
be
asso
ciate
d w
ith fe
dera
l cre
dit e
xten
ded
to p
roje
cts a
lso
rece
ivin
g PI
I Gra
nts,
redu
cing
the
net i
nves
tmen
t to
$275
bill
ion.
Tota
l $
380
$ 5
5
$ 5
75
Bett
er th
an 1
0:1
blen
ded
ratio
of N
et In
vest
men
t Effe
ct to
Bud
geta
ry C
ost.
Usin
g th
e CE
A m
etric
of 1
3,00
0 jo
b-ye
ars g
ener
ated
per
bill
ion
spen
t on
tran
spor
tatio
n in
vest
men
t as
bein
g ge
nera
lly a
pplic
able
to in
frast
ruct
ure,
thes
e m
easu
res c
ould
hel
p ge
nera
te 7
.5 m
illio
n jo
bs o
ver
10 y
ears
.
4 Public Works Financing/April 2017
Public Works Financing/April 2017 5
Like the weather, everyone seems to complain aboutthe impediments to federal asset acquisition but no oneever seems able to do anything about it.
Current federal budgetary rules effectively requirethat the purchase and financing of major, long-livedphysical assets of the government be expensed upfront,in the same way as operating costs like salaries andwages. This contrasts with corporate, nonprofit, andstate/local practice where long-term capital investmentsare accounted for separately, in a capital budget. Theresult? Federal agencies are forced to make inefficientinvestment decisions: Deferring much-needed capitalrenewal; making piecemeal acquisitions; favoring low-est initial cost over best value through life-cycle costing.
The longstanding federal spending rules are enforced
through OMB Circular A-11, which in most cases dic-tates that the entire capital cost of a long-lived asset be“scored” upfront (charged as current spending in thefederal discretionary budget).
Rather than attempting to completely replace A-11,the Critical Asset Procurement Reform (CAPR) Programwould modify budget rules to allow a limited number ofcritical Federal capital investment programs to spreadthe capital costs over their useful lives – provided therewas significant risk transfer to the private sector.
To be eligible under CAPR, the selected programswould need to:
(i) Pertain to capital-intensive, long-lived directfederal capital investments
CRITICAL ASSET PROCUREMENT REFORM:A FEDERAL P3 CAPITAL ASSET FINANCING PROPOSAL
by Bryan Grote and John Ryan
1. Federal Asset Procurement Innovation
Summary: Authorize certain types of critically-needed federal assets to be procured as Design-Build-Finance P3s to accelerate acquisition and shift risks: the Critical Asset Procurement Reform (“CAPR”) Program (Examples: Army Corps Water Resource Projects; VA Hospitals; GSA Buildings; Federal Lands Highways; FAA NextGen Air Traffic Control.)
Policy Rationale: Federal budget constraints (including lack of capital budgeting) delay procurement of key capital-intensive assets – resulting in short-term, less efficient federal asset acquisitions and deferring public benefits.
Program Design: Pilot program would authorize a P3 approach to support up to $60B of financing for designated large federal assets and systemic capital improvements. Private partner would design, build, and finance the construction phase. Possibility of outsourcing ongoing asset maintenance for certain types of projects, with compensation tied to asset performance.
Private construction loans would be retired by the procuring federal agency at project acceptance, using the proceeds of a Treasury loan to the federal agency.
Annual debt service cost under CAPR—rather than the asset value—would be scored in the federal budget, along with any annual payments for asset maintenance and renewal predicated upon performance.
Operations could be either federal or out-sourced.
Advantages: Significantly shifts project development risk and potentially long-term performance risk to private sector. Provides “capital budgeting” treatment for designated, critically-needed, large-scale federal assets
and systems of projects that cannot be readily funded from participating agencies’ annual budgets. Minimizes incremental financing cost of P3 project delivery by confining private finance to the
construction period. Retains longstanding OMB Operating Lease rules for “routine” federal asset acquisitions.
Budget Impact: CAPR payments would be funded within agencies’ normal annual appropriations, so the program is deficit-neutral from an operating budget perspective.
Would use special borrowing authority to fund takeout from Treasury of interim financing – the loan would not be scored as discretionary spending under current caps (similar to FCRA financing account transactions).
6 Public Works Financing/April 2017
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Volume320
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PWFinance.net
TRUMP AND INFRASTRUCTURE
by William G. Reinhardt, Editor
Preside
nt-elect
Donald
Trump’s
towerin
g plan for
rebuild
ingAm
erica has
yetto t
akesha
pe.
AsBob
Poole n
oteson p. 9
, there
is not a
single T
rump infr
astructu
re plan
: there
aremore
likethr
ee,at
thisstag
e ofthe
transiti
on.Firs
t isan oft-
repeat
ed figure o
f a $550
-billion
progra
m, with no d
etails o
n where
that m
oney wou
ld come from
or how
it would
be spent.
Second
is a$1-
trillion
propos
al for i
nvestor
-funded
infrastr
ucture
, which
is anal
yzed on p. 1
5 byBry
an Grote a
ndDav
id Seltzer
of Merca
torAdv
isors. A
ndthir
d
is rece
nt ment
ionof a
n infrastr
ucture
bank, p
ossibly
funded
as part
of an ove
rhaul o
f the ta
x code an
d cur-
rently
champion
ed by Trump adv
iserSte
venMnuc
hin.
Alread
y inpla
y and pos
sibly of
great c
onsequ
ence ar
e new IRS
“safe ha
rbor” r
ulesfor
expand
ingthe
avail-
ability
of tax-e
xempt d
ebtfina
ncing for
private
ly develop
ed public w
orks. N
ossaman
partne
r Barn
ey Alliso
n
assesse
s the im
pact of
therule
s chang
e onthe
public-p
rivate p
artnersh
ip (P3) m
arket o
n p. 11.
There i
s also a
n inside-t
he-beltw
ay plan. S
eizing
themoment
, acoa
lition is fo
rmingbeh
indthe
scenes i
n
PUBLIC WORKS FINANCING
“I just read your article: ‘The Role of Performance-Based Infrastructure,’ and foundit to be a compelling policy analysis of transportation funding
and project management. I hope policymakers read this article—it certainly impacts my thinking about these issues.”
Richard Bagger, Finance Committee Chairman, Port Authority of NY/NJ
Public Works Financing/April 2017 7
(ii) Address critical national priorities;
(iii) Entail substantial private participation andrisk transfer; and
(iv) Be expressly designated by Congress as CAPR-eligible.
This approach would be lim-ited to major direct construc-tion, acquisition, or renovationof designated federal assets,such as Army Corps ofEngineers water resourcesprojects, VeteransAdministration hospitals,major buildings like the newFBI and Homeland Securityheadquarters, and even FAA NextGen air traffic controlequipment and facilities. Together, these importantprograms today amount to about $12 billion per year—representing less than 8 percent of total federal “majorpublic physical investment” outlays of $153 billion.
Program Structure
The CAPR program would enable a federal agency
to outsource to a private vendor the construction risk(cost overruns and delays) of building, acquiring, orrenovating a federal asset. Depending upon the natureof the improvement, the agreement also could coverthe long-term performance risk (maintenance andfunctionality) of the asset.
The CAPR program follows aDesign-Build-Finance (DBF)approach, where the privatesector is responsible for design-ing, constructing, and interim-financing the acquisition of theasset. In cases where the valueof the asset is highly dependenton timely maintenance and cap-ital renewal (such as technolo-gy), a Design-Build-Finance-
Maintain (DBFM) approach could be used.
Under the CAPR program, the agency would beauthorized to enter into a DBF or DBFM project agree-ment with a vendor. The vendor would be selectedunder a “best value” competitive procurement model,with a guaranteed maximum price and guaranteedcompletion date.
Federal agencies are forcedto make inefficient invest-ment decisions: Deferringmuch-needed capital renew-al, favoring lowest initial costover best value through life-cycle costing.
8 Public Works Financing/April 2017
The vendor would be required to arrange private con-struction financing until the asset was completed, deliv-ered, and accepted by the agency. At that point, theagency would pay the vendor a pre-determined sum torepay the guaranteed price for the asset (plus scheduledinterest) by drawing on the proceeds of a long-term U.S.Treasury loan. Using a combination of interim and per-manent financing should:
i) Transfer the project’s construction risk andacceptance risk to the private partner by having it bearincreased financing costs if delays or overruns occur; and
ii) Minimize the incremental cost of long-termfinancing compared to conventional Treasury funding.
The final maturity of the Treasury loan would be the lesser of30 years or the useful life of the asset being financed.An annual repayment schedule would be established on a leveldebt service basis at a rate based on U.S. Treasury obligations atthe time of the loan commitment. The agency would agree tomake debt service payments from the capital portion of its regu-lar annual appropriation from Congress. For those projectswhere periodic technology updates or major capital renewals arerequired to ensure long-term functionality, the agency wouldmake annual performance payments to the vendor, conditionedupon the performance of the asset (availability payments).
To determine if the P3 approach is cost-effective, theagency would be required to prepare a Value for Money(VfM) analysis comparing the net present value of thecost to the agency of procuring theasset through the CAPR programvs. traditional federal pay-as-you-go procurement, taking intoaccount the benefits of risk trans-fer. In addition, the VfM analysiswould incorporate the benefit tosociety of accelerated completioncompared to the deferred deliveryschedule under conventional feder-al acquisition—“Value forFunding.”
Budget Treatment
The CAPR projects would be per-mitted to utilize modified bud-getary accounting rules because ofthe value of construction risk trans-fer and the benefits of accelerateddelivery, cost savings and, whereapplicable, ongoing performanceguarantees. Congress would need
to authorize access to special borrowing authority for aparticipating agency in order for it to enter into a P3agreement for an approved project and draw upon a loanfrom Treasury to take out the construction financingupon asset acceptance. Neither the borrowing authority(obligated upon execution of the project agreement) northe resulting outlays (occurring when the Treasury loanis drawn) would be subject to the budget’s current discre-tionary spending caps.
Each year the agency would use a portion of its regu-lar appropriations to fund the annual loan repayments tothe Treasury, and, if applicable, any operating-perfor-mance payments to the vendor. These amounts would bescored (budget authority and outlays) each year over theterm of the Treasury loan, on a pay-as-you-use basis. Asimplified flow chart of how the transaction would bestructured appears below.
Conclusion
The CAPR program effectively would allow capitalbudgeting to be applied to a select category of high prior-ity federal capital investments. The P3 approach trans-fers substantial risk to the private sector, yet avoidsmuch of the higher cost of private financing by retiringthe construction loan with a long-term permanent loanfrom the Treasury following delivery and acceptance ofthe project. This approach should equitably share a long-term asset’s costs between current and future beneficia-ries, unlike current expensing of federal capital invest-ments. �
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Public Works Financing/April 2017 9
Major infrastructure investments—especially pro-jects and programs of regional and national signifi-cance—can generate major “spillover” benefits to thegeneral public—some, like locks and dams, literally so.This article explains why tax credit bonds should be inthe mix of federal infrastructure policy initiatives.Previous generations of tax credit bonds, such as BuildAmerica Bonds, were highly successful in broadeningthe market for infrastructure debt but their authorityhas expired. We propose creating a new generation ofqualified tax credit bonds. A separate article in thisissue of Public Works Financing outlines a specific pro-posal to create “Infrastructure Credit Bonds” (page 12).
While some proposals have focused on the role thatequity capital can play in advancing infrastructure pro-jects, it is worth noting that P3 projects have represent-ed just a small fraction of total investment in publicinfrastructure. For example, CBO reports that in 2014,federal, state and local capital outlays for public infra-structure totaled $181 billion. That same year, accord-ing to Public Works Financing, P3 project outlaystotaled just $4.2 billion—about 2 percent of the market.
Within the P3 sector, financial equity represents, onaverage, about 15 percent of the capital sources for P3projects. Debt capital, on the other hand, represents 60percent of sources on P3 deals—and for governmentalprojects debt may fund 90 percent or more of the “capi-tal stack.” So clearly, the cost of borrowing has a majorimpact on project feasibility and financial capacity.
Historically, infrastructure project sponsors haveraised debt capital from the following sources:
• Tax-exempt financing (both “governmental” and “pri-vate activity” bonds);
• Federal credit assistance (such as TIFIA, RRIF andWIFIA, with loans generally made at the U.S.Treasury rate);
• Bank and other taxable rate debt (especially suitablefor P3 project financings);
• State-capitalized loan funds (such as WaterRevolving Loan Funds and State InfrastructureBanks)
In more recent years, federal legislation has autho-
rized other forms of tax-advantaged debt:
• Partially-subsidized taxable rate bonds (BuildAmerica Bonds) designed to replicate the tax-exemptborrowing rate by offsetting a portion of the interestcost (recently proposed to be 28%) through a refund-able (cash) tax credit for the issuer (“direct-pay” taxcredit bonds); and
• Fully-subsidized taxable rate bonds designed to havemost or all of the annual interest return providedthrough an annual (nonrefundable) tax credit for theinvestor, which can apply the credit against other taxliability (“investor pay” tax credit bonds).
These programs have been either time-limited (BuildAmerica Bonds issuable only in 2009 and 2010) or vol-ume-capped (five separate classes of “qualified tax-creditbonds” totaling about $35 billion for specific purposessuch as school construction, energy conservation andclean renewable energy projects.)
Of all the existing and proposed debt instruments,the qualified tax credit bonds offer the greatest present
WHY TAX CREDIT BONDS SHOULD BE A KEY PART OF
ANY FEDERAL INFRASTRUCTURE POLICY INITIATIVEElaine Buckberg and David Seltzer
World’s Leading Transportation
With experience spanning nearly 50 years of innovative highway development on four continents, Cintra is one of the leading transportation infrastructure companies in the world. Today, our portfolio includes more than 1,200 miles of managed highways worldwide, representing a total global investment in traffic congestion improvements of more than $23.5 billion.
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Ferrovial’s business model is focused on end-to-end infrastructure management, design, construction, financing, operation and maintenance. With this aim, the company is active in complementary sectors, such as airport and toll road construction and operation, as well as services.
Infrastructure Developer
10 Public Works Financing/April 2017
value benefit to the project sponsor per dollar of“scored” federal budgetary cost.
This is not to suggest that other debt instrumentsaren’t helpful. PABs level the playing field between P3and governmental projects, but their purpose is simplyto match the municipal bond market rates available togovernmental sponsors. Similarly, “direct pay” tax cred-it bond programs like Build America Bonds can broadenthe market by attracting taxable fixed-income investors,but are designed to replicate (but not beat) tax-exemptrates. Federal credit can provide greater structuringflexibility in terms of deferrals and prepayments, butmay only reduce the effective borrowing cost by ½% or sofor investment grade issuers—a savings to be sure, butnot enough to dramatically increase a project’s debtcapacity. And SRF and SIB loans, while potentiallyoffering very low rates, are severely size-constrained bylimits on state capitalization grants.
In contrast, qualified tax credit bonds can more thandouble an issuer’s debt capacity. Stated differently, agiven local revenue stream pledged for debt service cansupport twice the amount of tax credit bond principal astax-exempt financing or federal credit.
From a federal policy viewpoint, tax credit bondsoffer additional advantages. Unlike federal grantspending or credit assistance, tax code measures do not
require growing the size of the federal government toadminister them. Tax incentives also have the advan-tage over grants of harnessing the market discipline ofprivate capital (bond investors) to ensure that the pro-ject’s repayment plan is feasible. Unlike federal credit,a tax credit bond does not require the federal govern-ment to take any credit exposure on the borrower or theproject.
Tax credits attached to bonds can be simpler andmore efficient to market than equity-based investmenttax credits, provided liquidity concerns are meaning-fully addressed (as discussed in the follow-on article on“Investment Credit Bonds”). And tax credits attachedto bonds are “budget-efficient,” since they stretch outthe fiscal impact over a longer period of time more com-mensurate with the economic lives of the assets beingfinanced. The scored cost of the program (effectivelythe first 10 years of tax expenditures under budgetrules) relative to the financial benefit to the projectsponsor offers the highest “return on fiscal invest-ment.”
For these reasons, a tax credit bond proposal shouldbe a key component of any new federal policy initia-tive. �
2. In
frastr
uctu
re Cr
edit
Bond
s Su
mm
ary:
Ne
w vo
lum
e-ca
pped
stat
e/lo
cal Q
ualif
ied
Tax C
redi
t Bon
d pr
ogra
m fo
r tra
nspo
rtat
ion
and
wat
er p
roje
cts
(Sim
ilar t
o W
yden
-Hoe
ven
prop
osed
TRI
P Bo
nds a
nd LA
Met
ro’s
prop
osed
Am
erica
Fas
t Fo
rwar
d Bo
nds;
coul
d al
so in
clude
P3
proj
ects
.)
Polic
y Rat
iona
le:
Ce
rtai
n hi
gh p
riorit
y pr
ojec
ts w
ith la
rge
publ
ic “s
pillo
ver”
ben
efits
requ
ire a
dee
per s
ubsid
y th
an
tax-
exem
ptio
n or
TIF
IA-s
tyle
fede
ral c
redi
t ass
istan
ce to
be
finan
ceab
le.
Us
es a
nnua
l tax
cred
its u
nder
the
tax c
ode
to g
ener
ate
a 50
%+
PV b
enef
it to
bor
row
er/p
roje
ct sp
onso
r.
Prog
ram
Des
ign:
$10
billi
on/y
ear o
f vol
ume
cap
over
10
year
s ($1
00 b
illion
tota
l pro
gram
).
Fede
ral g
over
nmen
t effe
ctive
ly pa
ys m
ost o
r all o
f the
inte
rest
on
bond
s via
an
annu
al
nonr
efun
dabl
e ta
x cre
dit;
issue
r use
s loc
al s
ourc
es (d
edica
ted
taxe
s, us
er ch
arge
s, et
c.) t
o re
pay
the
prin
cipal
.
Allo
catio
n:
o Vo
lum
e ca
p w
ould
be
allo
cate
d am
ong
tran
spor
tatio
n pr
ojec
ts, w
ater
and
oth
er se
ctor
s (ba
sed
on
asse
ssm
ent o
f nat
iona
l inv
estm
ent n
eeds
and
fina
ncin
g ca
pacit
y).
o Pa
rt o
f vol
ume
in e
ach
sect
or w
ould
be
disc
retio
nary
allo
catio
n by
des
igna
ted
fede
ral a
genc
ies
(or a
futu
re N
atio
nal I
nfra
stru
ctur
e Fu
nd)
for m
ajor
pro
ject
s of n
atio
nal /
regi
onal
sign
ifica
nce.
o
Bala
nce
of vo
lum
e w
ould
be
form
ula
allo
catio
n to
the
stat
es fo
r sta
te/lo
cal p
roje
cts.
M
arke
tabi
lity
wou
ld b
e en
hanc
ed b
y al
low
ing
tax c
redi
ts to
be
appl
ied
agai
nst n
on-F
ICA
with
hold
ing
tax
on w
ages
and
retir
emen
t ben
efits
(whi
ch sh
ould
attr
act p
ensio
n fu
nds a
nd lif
e in
sura
nce
com
pani
es).
Adva
ntag
es:
Bo
nds c
ould
fina
nce
both
gov
ernm
enta
l and
P3
proj
ects
.
Trea
sury
, not
the
bond
und
erw
riter
, det
erm
ines
the
inte
rest
subs
idy
leve
l (ta
x cr
edit
rate
); in
tend
ed to
al
low
bon
ds to
be
sold
at f
ace
valu
e, w
ithou
t req
uirin
g iss
uer t
o su
pple
men
t cre
dit w
ith ca
sh in
tere
st.
No
cont
inge
nt li
abili
ty to
the
Fede
ral G
over
nmen
t if p
roje
ct d
efau
lts, u
nlik
e fe
dera
l cre
dit.
Fi
scal
cost
is k
now
n at
out
set d
ue to
vol
ume
cap
(unl
ike B
uild
Am
erica
Bon
ds).
Budg
et Im
pact
:
Prog
ram
nee
ds to
be
volu
me
capp
ed to
lim
it ta
x exp
endi
ture
s (es
timat
ed a
t ~20
% o
f fac
e am
ount
of
bond
s or ~
$20
billio
n fo
r the
pro
pose
d $1
00 b
illio
n pr
ogra
m).
Public Works Financing/April 2017 11
12 Public Works Financing/April 2017
The Performance Infrastructure Review Committee(PIRC) recommends that Congress enact a new volume-capped program of qualified tax-credit bonds for publicinfrastructure: Infrastructure Credit Bonds (ICBs).
ICBs would be structured as a sixth class of “quali-fied tax credit bonds” (QTCBs) under section 54A of theInternal Revenue Code. Over the last decade, Congresshas authorized over $35 billion of QTCBs to assist sec-tors such as public education, clean renewable energygeneration, and energy and forestry conservation.
QTCBs all share certain common features. Theissuer identifies local revenues (taxes, fees or usercharges) to repay bond principal. The annual credit isconsidered taxable interest income to the bondholderfor federal tax purposes. The issuance amount is vol-ume-capped, the use of the proceeds is limited to target-ed purposes, and the annual interest subsidy is deter-mined by the Treasury Department. [As of early April,the tax credit bond rate was 4.45%--approximately 150basis points over the comparable-term Treasury bondyield--and the maximum bond maturity was 31 years.]
Infrastructure Credit Bonds For Water,Transportation
Infrastructure Credit Bonds would be a $100-billionnational program with eligibility including transporta-tion and water projects (and potentially extending toother critical sectors). Proceeds could be used for bothcapacity expansion projects and state ofgood repair capital renewal. The totalissuance volume would be subject to anannual allocation cap of $10 billion peryear over 10 years. The allocation to pro-jects or states could be made on a discre-tionary basis, on a formula basis, or somecombination of the two. Eligible issuerswould be state or local governmental units,and could include public-private partner-ships.
The table below shows how a projectsponsor’s potential financing capacitywould be dramatically expanded usingICBs compared to the smaller subsidiesprovided through tax-exempt bonds andTIFIA loans.
Marketability and Liquidity
Municipal bond market participants have expresseda valid concern about the marketability of qualified taxcredit bonds. Since their introduction nearly 20 yearsago, tax credit bonds have been approved by Congress(under both parties) in piecemeal fashion—in relativelysmall amounts and for limited issuance periods. Thishas stunted the development of a broad and liquid mar-ket.
The tax credits generally have taken the form of non-refundable credits (sometimes referred to as “investortax credits”), which require the investor to have otherfederal tax liability to offset. Demand for the bonds hasbeen hindered by a combination of small program size,investor uncertainty about their tax position in futureyears, and very limited secondary market potential.
While making the credits “refundable” (presentableto Treasury for cash) would overcome the tax uncertain-ty issue, many members of Congress are opposed sinceit requires outlays from the U.S. Treasury tantamountto grants. Moreover, refundable credits have provenvulnerable to sequestration, in the event of federal bud-getary cutbacks, as issuers of Build America Bonds dis-covered.
To overcome these problems, the ICB proposal would:
INFRASTRUCTURE CREDIT BONDS—A NEW APPROACHby Bryan Grote and David Seltzer
Public Works Financing/April 2017 13
1. Be sized sufficiently large ($100 billion) toattract the interest of both dealers and investors; and
2. Expand the list of “creditable” taxes beyond reg-ular federal income tax and the AMT to include with-holding taxes retained by employers on wages and byretirement plan sponsors on benefits (“designated distri-butions”) under sections 3402 and 3405 of the tax code,respectively. The credits would not be permitted to beapplied against FICA withholdings for Social Security orMedicare.
An ICB Bondholder that had liabilityto remit these withheld taxes toTreasury could apply the annual taxcredits against such payments eachyear. Thus, the credits could be convert-ed into a yearly cash benefit like aninterest payment—even for bondinvestors that don’t pay regular incometaxes. It is anticipated that this modifi-cation could make ICBs a suitableinvestment for institutional investorssuch as life insurance companies andpension funds that: (a) have large andpredictable multi-year withholding taxliability; and (b) also invest in long-termtaxable rate bonds for their own account.These investors currently hold over $3.5trillion in corporate and foreign taxable-yield bonds.
Under the proposal, the employee or
retiree would be treated as having paid her/hiswithholding tax to the government—notwith-standing the fact that the employer or plansponsor that held ICBs retained a portion toreceive its yearly return through the annualtax credit.
Scored Cost
Based on precedents with other proposedand enacted tax credit bond legislation, itappears that a program designed in this fash-ion would be scored at about 20 percent of theface amount of the authorized bond volume.That is, a $100-billion, 10-year program wouldhave tax expenditures of about $20 billion overthe 10-year budget window. While not aninsignificant sum, there would appear to be anopportunity to “pay for” this type of majorinfrastructure investment program in conjunc-tion with larger “tax reform” legislation that
Congress will be taking up in coming weeks.
Conclusion
ICBs could play a very meaningful role in addressingthe nation’s infrastructure investment gap by substan-tially increasing the borrowing capacity of state, local,and P3 project sponsors compared to other potential fed-eral policy tools. Expanding the list of creditable taxesto bring in life insurance and pension fund investorsshould both broaden the primary market and facilitate aliquid secondary market. �
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For more information, please contact:
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Montreal University Hospital Research Center, Quebec
Long Beach Courthouse, California
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14 PWFinancing/April 2017
3. P
erfo
rman
ce In
cent
ive
Inno
vatio
n (P
II) G
rant
s
Sum
mar
y:
Disc
retio
nary
capi
tal g
rant
pro
gram
to in
cent
ivize
nee
ded
life c
ycle
asse
t man
agem
ent a
nd p
rocu
rem
ent
inno
vatio
n re
form
s at t
he lo
cal a
nd st
ate l
evel
(S
imila
r to
succ
essf
ul e
ffort
s in
Cana
da a
nd A
ustr
alia
.)
Polic
y Rat
iona
le:
Ne
ed to
refo
rm p
rocu
rem
ent p
ract
ices t
hat c
urre
ntly
favo
r low
est “
first
” cos
t and
inst
ead
enco
urag
e fu
ll lif
e cy
cle p
ersp
ectiv
e on
capi
tal,
oper
atio
ns a
nd m
aint
enan
ce co
sts.
A Pe
rform
ance
Inno
vatio
n In
itiat
ive
(PII)
will
help
bui
ld n
ew ca
pacit
ies t
o le
vera
ge p
ublic
ben
efits
of
risk
tran
sfer
, acc
eler
ate
proj
ect d
elive
ry, f
ree
up e
xistin
g fu
nds f
or o
ther
inv
estm
ents
and
(thr
ough
pr
e- d
evel
opm
ent g
rant
s) gr
ow th
e pi
pelin
e of
inve
stib
le p
roje
cts.
Prog
ram
Des
ign:
$20
billio
n, m
ade
avai
labl
e at
$2B
/yea
r ove
r a 1
0-ye
ar p
erio
d.
De
signa
ted
fede
ral a
genc
ies w
ith in
nova
tive
finan
cing
pro
gram
s (or
a fu
ture
Nat
iona
l In
frast
ruct
ure
Fund
, if e
stab
lishe
d) w
ould
mak
e gr
ant a
war
ds fo
r up
to 2
0% o
f pro
ject
cost
s.
5-10
% o
f fun
ding
($10
0-20
0 M
/yea
r) se
t asid
e fo
r pre
-dev
elop
men
t and
bus
ines
s pla
nnin
g co
sts.
Pu
blic
auth
oriti
es, p
ublic
-priv
ate
part
ners
hips
, and
ent
ities
of a
ny ty
pe o
r geo
grap
hy w
ould
be
elig
ible
so lo
ng a
s the
ir pr
opos
als a
ddre
ss lif
e cy
cle p
erfo
rman
ce st
anda
rds (
to b
e de
velo
ped
by th
e Na
tiona
l Aca
dem
ies /
TRB
and
the
Natio
nal A
cade
my o
f Pub
lic A
dmin
istra
tion
unde
r the
ir co
ngre
ssio
nal c
hart
ers)
.
Adva
ntag
es:
Sim
ple/
stra
ight
forw
ard
to a
dmin
ister
and
und
erst
and.
Suc
cess
ful p
rece
dent
with
P3
Cana
da Fu
nd.
Co
vers
up
to 2
0% o
f pro
ject
cost
s, lo
wer
ing
requ
ired
user
char
ges o
r tax
-sup
port
ed p
aym
ents
.
Avai
labl
e fo
r bot
h go
vern
men
tal a
nd P
3 pr
ojec
ts th
at u
se “b
est p
ract
ices,”
inclu
ding
ben
efit
cost
and
va
lue-
for-m
oney
ana
lyse
s.
5:1
leve
rage
ratio
, or g
reat
er.
Budg
et Im
pact
:
Gran
ts w
ould
requ
ire d
iscre
tiona
ry B
udge
t Aut
horit
y (B
A) o
f $2
billi
on/y
ear.
Public Works Financing/April 2017 15
16 PWFinancing/April 2017
4. S
tand
ardi
zed
Priv
ate
Activ
ity B
onds
Sum
mar
y:
Unlim
ited
tax-
exem
pt d
ebt v
olum
e fo
r P3
“pub
lic u
se” i
nfra
stru
ctur
e (S
imila
r to
prop
osed
Qua
lifie
d Pu
blic
Infra
stru
ctur
e Bo
nds –
QPI
Bs p
ropo
sed
in F
Y 20
17 B
udge
t Rev
enue
M
easu
res /
Tre
asur
y “G
reen
Boo
k”.)
Polic
y Rat
iona
le:
P3
pro
ject
s offe
r ben
efits
of r
isk tr
ansf
er a
nd p
roje
ct a
ccel
erat
ion,
but
hav
e hi
gher
cos
t of d
ebt
capi
tal.
Thi
s pro
gram
hel
ps “l
evel
the
play
ing
field
.”
Prog
ram
wou
ld h
omog
enize
the
patc
hwor
k of d
iffer
ent I
RS ru
les t
oday
for v
ario
us p
roje
cts t
hat
qual
ify fo
r PAB
cate
gorie
s (ai
rpor
ts, s
eapo
rts,
high
way
s, tr
ansit
, wat
er,
etc.)
.
Prog
ram
Des
ign:
Proj
ects
mus
t be
gove
rnm
enta
lly-o
wne
d fo
r tax
pur
pose
s but
wou
ld u
se P
3 pr
ocur
emen
t.
Stat
e an
d lo
cal a
genc
ies c
ould
serv
e as
cond
uit i
ssue
rs o
f deb
t for
pro
ject
s with
priv
ate
part
icipa
tion
(man
agem
ent,
equi
ty in
vest
men
t, et
c.) w
ith n
o fe
dera
l vol
ume
cap
limita
tion.
Bond
s wou
ld n
ot b
e su
bjec
t to
Alte
rnat
ive M
inim
um T
ax (A
MT)
.
Adva
ntag
es:
No
nee
d fo
r fed
eral
invo
lvem
ent i
n au
thor
izing
pro
ject
deb
t.
No fe
dera
l exp
osur
e to
pro
ject
or b
orro
wer
cred
it ris
k.
Budg
et Im
pact
:
10-y
ear s
core
d co
st is
mod
est,
perh
aps $
5 bi
llion
in ta
x exp
endi
ture
s for
unc
appe
d vo
lum
e, b
ased
on
Join
t Com
mitt
ee o
n Ta
xatio
n (JC
T) b
udge
t ana
lysis
of Q
PIBs
(JCX
-50-
15).
Im
plie
d iss
uanc
e vo
lum
e (p
roje
cted
by
JCT)
of ~
$10
billi
on/y
ear.
PWFinancing/April 2017 17
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18 Public Works Financing/April 2017
5. S
treng
then
ed P
latfo
rm fo
r Fed
eral
Cre
dit
Sum
mar
y:
Cons
olid
ate
and
impr
ove
the
adm
inist
ratio
n of
fede
ral c
redi
t pro
gram
s for
pub
lic in
frast
ruct
ure
(T
his c
ould
be
acco
mpl
ished
thro
ugh
a re
purp
osed
exis
ting
entit
y, su
ch a
s the
Fed
eral
Fin
ancin
g Ba
nk w
ithin
Tr
easu
ry, f
eder
al re
gion
al co
nsol
idat
ion
of p
rogr
am d
elive
ry, o
r a n
ewly-
esta
blish
ed N
atio
nal I
nfra
stru
ctur
e Fu
nd.)
Polic
y Rat
iona
le:
Cu
rrent
ly, e
ach
fede
ral a
genc
y w
ith a
cred
it pr
ogra
m se
para
tely
man
ages
its l
oan
and
loan
gua
rant
ee
port
folio
s (Ag
ricul
ture
, Ene
rgy,
EPA,
Tra
nspo
rtatio
n, e
tc.).
o
Ther
e is
a la
ck o
f coo
rdin
atio
n, co
nsist
ency
and
impl
emen
tatio
n of
bes
t pra
ctice
s. o
“Mor
al h
azar
d” in
hav
ing
fede
ral a
genc
ies s
erve
as b
oth
proj
ect p
rom
oter
s and
cred
it pr
ovid
ers.
o A
cons
olid
ated
, pro
fess
iona
lized
, com
preh
ensiv
e pl
atfo
rm is
nee
ded
to in
tegr
ate
the
diffe
rent
infra
stru
ctur
e se
ctor
s (e.
g., o
ne e
ntity
with
mul
tiple
“len
ding
win
dow
s”).
Ex
pert
boa
rd o
f dire
ctor
s (m
ajor
ity n
on-g
over
nmen
t offi
cials)
wou
ld im
prov
e go
vern
ance
.
Prog
ram
Des
ign:
Entit
y w
ould
und
erw
rite
loan
s/gu
aran
tees
for b
oth
new
and
exist
ing
fede
ral c
redi
t pr
ogra
ms.
Ex
pand
ed e
ligib
ilitie
s nee
ded
for k
ey p
ublic
infra
stru
ctur
e se
ctor
s, in
cludi
ng a
viatio
n an
d w
ater
.
Line
Agen
cies (
DOT/
Build
Am
erica
Bur
eau,
DOE
/LPO
, EPA
, RUS
, etc
.) w
ould
cont
inue
to b
e re
spon
sible
fo
r as
sistin
g pr
ojec
t app
lican
ts se
ekin
g cr
edit
assis
tanc
e.
Ad
vant
ages
:
Cred
it re
view
and
surv
eilla
nce
wou
ld b
e au
tono
mou
s fro
m p
roje
ct a
dvoc
ates
with
in fe
dera
l age
ncie
s.
Prov
ides
cons
isten
cy a
nd b
ette
r acc
ount
abilit
y fo
r cre
dit p
rogr
ams.
Sh
ould
be
mor
e co
st-e
ffect
ive th
an th
e cu
rren
t fra
gmen
ted
stru
ctur
e.
Budg
et Im
pact
:
$10B
of a
dditi
onal
fund
ing
over
10
year
s cou
ld su
ppor
t $10
0+ b
illio
n of
loan
s ass
umin
g av
erag
e lo
an
subs
idy
cost
s of 1
0% (a
ctua
l mul
tiple
coul
d be
hig
her b
ased
on
exist
ing
cred
it pr
ogra
m su
bsid
y co
sts)
.
Shou
ld re
sult
in e
nhan
ced
finan
cial m
anag
emen
t, ba
sed
on a
dmin
istra
tive
cost
effi
cienc
ies
and
impr
oved
risk
man
agem
ent a
nd u
nder
writ
ing
prac
tices
.
Public Works Financing/April 2017 19
We have to begin by recognizing the context in which we oper-ate. The prime element in that context is the dramatic lack ofcredibility of government institutions at all levels in America today.In my view, this largely stems from the insatiable need by govern-ments for more money to feed their budgets, their pension obliga-tions, etc. This has led to subterfuges and masquerading by gov-ernment to raise more revenue—first, install red light cameras inthe name of safety, and then reduce yellow signal times to gener-ate more revenue from tickets. The ARRA program was justifiedon congestion grounds by government but then maybe 3% or 4%of the money came to transportation. State programs are justifiedin the name of congestion, and then money is spent on favoritehobby-horses. The public is absolutely right not to trust us.
The second element in the current context is that we have anew group in Washington making big promises. The feeding frenzyin all corners of the transportation world to get in on the trillion-dol-lar festival only reinforces the public’s distrust.
The final background element is the decline, maybe the end, ofthe virtuous triangle that made highway tolling such a powerful andacceptable tool for infrastructure. That triangle consisted of the roadusers, road owners, and bond-holders, each of whose interestscounterbalanced the others. That triad of mutual trust has been bro-ken by the diversion of user-fee revenues to support other policygoals; the trust in the virtuous triangle is being eroded. This leads usto the first of our five reasons not to toll the Interstate System.
#1 The CashCowification of Tolls
It has become more and more typical that other “needs,” otherpurposes are incorporated into the toll road construct. The quin-tessential example is the Dulles Toll Road where an airport authori-ty charges road users a toll to pay for a transit system. If only wecould have gotten a barge canal in, it would have been the perfectexemplar of modern multi-modalism: unimodal funding and multi-modal spending. Perfect! We all agree that we must dedicate roadfees to the uses that road users paid for. No one has demonstratedhow that can be assured.
#2 What Happens to People Who ArePriced Off the Interstates
If we go back to the 1939 report to Congress “Toll Roads andFree Roads,” we find the fundamental justification for theInterstate System. The goal was to connect America for military,economic, and social reasons. That goal remains today, and itneeds to be extended. There was never any intent to price peopleof limited means off of the super highways. Rather, the nationalgoal was to “price” people onto it. When I was asked by reportersat the 50th anniversary of the Interstate System why we didn’t tollit at the beginning, my answer in 2006 was that the Interstates
would have stopped at the Mississippi. Think of the critical linkingtogether of America, integrating the South and the West, thatwould have been lost. So we still need to answer: Where do thosepeople and trucks go if they are priced off the Interstate highwaysby tolling? What national interest can justify that action? Noanswer has been forthcoming in the 10 years since the 50thanniversary.
#3 If the Last Vestige of Justification fora Federal Role is Gone—Then What?
Yes, I agree that recapitalizing the Interstates could veryadequately be funded by tolling, a perhaps feasible replacementfor the gas tax. But, if we toll the Interstates, then what federalrole remains in transportation? If the Interstate System is thefundamental fruition of the federal role in transportation, and ifit is the justification for the federal right to tax motor fuel, dowe then shift our national focus and federal resources to lowerlevels of the road system that are fundamentally local innature? This is the conundrum of public transportation poli-cy—the quintessential truth is that the main features that arefederal are quite capable of funding themselves through userfees (think international airports). It’s the marginal elements ofthe transportation system that need federal money.
#4 Kill the Gas Tax or Use It for NiceThings
So, if we don’t need the federal gas tax to pay for its funda-mental purpose, we will therefore abolish the fed gas tax,right? Not a chance. What is more frightening than a tax with-out a purpose? Think of all the barnacles on the federal-aidprogram that would suffer and fight that loss of funds. Thecamels would be in charge of the tent.
#5 Tolling the Federal System Isn’t aMarketplace
When we built roads in the past, when the road filled up, theprocess of considering expansion began. But largely this has beenended by forces united against expanding any road. Amazinglyenough, those forces also want the gas tax money to go to pay fortheir favorite tool. In the private world, congestion is the market’ssignal for expansion. But in a socialistic system where governmentdecides on expansion, will congestion be a signal for rationing viaprice increases, or other forms of managing demand? Will thepublic road owners seek to maximize service to road users, or tomaximize revenue needed for other worthy goals, or to penalizethose terrible people who think cars and trucks are useful?
These issues have been recognized and argued before, butno one has really been able to address them, and assure thatthe future with a tolled Interstate system is a benign one. �
FIVE REASONS NOT TO TOLL THE INTERSTATESby Alan E. Pisarski, a consultant in travel behavior
The White House is trying to square the circle on itspromised $1-trillion infrastructure plan. While stillemphasizing the need for private (P3) capital invest-ment, the Administration can hope for bipartisan sup-port only if the plan includes net additions to federalspending, especially for projects not feasible for rev-enue-based financing. Conservative Republicans willinsist that any new federal spending be paid for (ratherthan further ballooning the deficit).
As I’ve written elsewhere, there is no need for a fed-eral tax credit to induce private investment. With infra-structure funds having raised in excess of $250 billionover the last five years, there is plenty of willingness toinvest. The problem is a dearth of U.S. projects.
In a recent piece for Time.com, former Bush DOT pol-icy maven Tyler Duvall and two McKinsey colleaguessuggested that the federal government “consider provid-ing incentives to the states to monetize existing assetsinto new projects,” citing the successful Australian assetrecycling policy that I wrote about here last year. And inFebruary, the Australian Embassy issued its own sug-gested application of their experience to a “RebuildingAmerican 20/20 Infrastructure Program.”
The aim of such proposals is to incentivize state andlocal governments to create two kinds of projectpipelines. The first would be user-fee-based brownfieldassets (airports, highways and bridges, seaports) need-ing refurbishment, which have proved very attractive toinfrastructure investment funds and public pensionfunds. The second would be both brownfield and green-field infrastructure that would not pencil out with user-fee financing—such as public buildings, rural roads andbridges, well-justified transit projects, etc.
The Australian Embassy suggests that the U.S. fed-eral government create a $100-billion Asset RecyclingFund, capitalized by selling revenue bonds backed by
future corporate income tax revenue from the refur-bished brownfield assets. To encourage states to leasebrownfield assets and invest the proceeds in other infra-structure, the Fund would offer states a 20% bonus onthe value of each lease transaction, provided all the pro-ceeds were used for other infrastructure. (And I willnote that if the brownfield project’s existing tax-exemptbonds did not have to be replaced with taxable bonds bythe lessee, the proceeds for new infrastructure would begreater.) The infrastructure law could encourage orrequire the non-revenue projects to be procured viaavailability-payment P3 concessions, helping to createthe second pipeline of projects for private capital invest-ment.
20 Public Works Financing/April 2017
ENGINEERING & ENVIRONMENTAL SOLUTIONS Transportation Rail and Transit Environmental
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by Robert W. Poole Jr., Reason Foundation
HOW ASSET RECYCLING COULD SOLVETRUMP’S INFRASTRUCTURE PROBLEM
Public Works Financing/April 2017 21
Here’s an example. There is still no funding plan forthe $24-billion Gateway Project to provide new rail tun-nels and adjacent infrastructure between New York andNew Jersey. Yet the Port Authority of New York & NewJersey owns three sets of not-very-well managed rev-enue-producing assets: airports, bridges and tunnels,and seaports. In a recent study for the ManhattanInstitute, I estimated the likely market value of theseassets if they were to be long-term leased under P3 con-cessions. Using a database of global transactions fromthe last decade or so, my mid-range asset values were$16.4 billion for the airports, $28.2 billion for thebridges and tunnels, and $3.3 billion for the seaports.Leasing only some of these assets would raise enough topay for a Gateway Project structured as a long-termavailability-payment concession.
Is this approach anywhere within the realm of politi-cal feasibility? For Republicans in Congress, the biggeststumbling block is likely to be the initial $100- billionAsset Recycling Fund. The credibility of those bondsbeing paid off over time by corporate profits from theleased brownfield assets is questionable. An alternative,assuming a comprehensive tax reform bill is passedprior to the infrastructure program, would be to capital-ize the fund using a portion of the one-time receiptsfrom repatriation of overseas corporate income tax rev-enue, along the lines proposed by Rep. John Delaney (D,MD). Making Delaney’s idea part of the plan, though ina modified form, could open the door to some degree ofbipartisan support in Congress.
Another factor that could help attract bipartisan sup-port (by overcoming potential public employee unionattacks on the Asset Recycling plan as “privatization”)would be to include participation by U.S. public employeepension funds. I would not argue for a federal mandate tothis effect, but simply point to the high-equity approachemployed in recent pension-fund buyouts of the ChicagoSkyway and the Indiana Toll Road. Since pension fundstypically seek only high-single-digit returns on brownfieldassets, the user fees can be less than in a purely privatedeal, since the weighted average cost of capital is lower insuch a financing structure. And public employee unionleaders are coming to terms with a portion of their pensionfunds’ assets being invested in revenue-producing infra-structure. Union support could bring a critical mass ofDemocrats on board.
Politicians of both major parties love infrastructure,but Republicans and Democrats differ rather sharply onhow to pay for such programs. I see zero chance that
House or Senate Republicans would agree to $1 trillionworth of new federal spending on infrastructure, with-out close to $1 trillion worth of “pay-fors.” In somerecent debates (e.g., over air traffic control corporatiza-tion), most congressional Democrats automaticallytermed the proposal “privatization” and thereforebeyond the pale. But think back to September 2014,when a bipartisan panel of the House Transportation &Infrastructure Committee released a report solidly sup-portive of P3 infrastructure. The kind of asset recyclingproposal set forth here has the potential for garneringsimilar bipartisan support.
President Trump has expressed dismay at the poorcondition of the New York airports, while expressingsupport for the Gateway project. Asset recycling couldsolve both problems, while providing a model for the restof the country. �
Robert W. Poole, Jr. is thedirector of transportation studies
at the Reason Foundation.
22 Public Works Financing/April 2017
Relying on gas taxes to sustain the federal highwaytrust fund and state road improvement and mainte-nance programs is doomed because cars keep gettingmore fuel efficient. Public Works Financing readerswill certainly be familiar with this trend. Electric vehi-cles do not pay any fees for using roads, which lots ofpeople rightly view as unfair. Enter road usagecharges—the solution of choice for people that spend alot of time thinking about declining gas tax revenue.Mileage-based road usage charges as a replacementfor the per-gallon gas tax are enticing for sure.Everybody should pay in proportion to what they useand nobody should get a free ride. Emerging technolo-gy lets us count and identify where miles are drivenand generate bills. Indeed, USDOT is poised to spend$95 million to research and test road usage chargingover the next five years through the SurfaceTransportation System Funding Alternatives (STSFA)grant program. As I explain below, this money shouldbe spent exploring other ways to support the nationalhighway system.
Road usage charging is definitely “feasible”. I led aconsultant team for the Washington StateTransportation Commission that came to that conclu-sion. Other studies have echoed that finding. But thereal question is whether road usage charging is a goodidea, and this is where I part company with many ofmy friends and colleagues. Although a followup studythat I led in Washington State concluded that roadusage charging would generate higher net revenuethan leaving the current motor fuel tax in place over25 years, numerous questions remain, and I do notbelieve that those questions can be addressed satisfac-torily. I am dismayed that we sink more and moreresources into a solution that is doomed to failure,while ignoring those that are more practical, andarguably more fair.
While industry insiders think road usage chargingis great, regular people hate it. To be sure, drivers thatparticipated in pilot programs improved their opinionof road usage charging—but that does not translateinto a groundswell of popular support. It is too hard toexplain and has problems that are just too difficult tosolve. If I can get someone’s attention for 10 minutes,I can explain the rationale, operation, and outcome ofroad usage charging to the point where people “get it”.But, at best, we’re lucky to get 30 seconds. Given thesame amount of time, opponents can easily turn peo-ple against the idea with some pretty compelling argu-ments:
• Government can’t make a complicated system likethis work (remember ObamaCare?)
• I don’t want government tracking me.
• This is just a trick to make us pay more money –they waste the money we give them already.
• This is the camel’s nose under the tent – next comescongestion pricing.
• Why create an expensive, complicated system toreplace the gas tax, which is simple and inexpensiveto operate?
The lightning-rod issues are privacy and the abilityto distinguish miles driven in a state different from thedriver’s home state. The two issues are linked becausevirtually all of the past and current research is for roadusage charge systems for an individual state or a groupof contiguous states—not a national system. With dif-
GAS TAXES ARE DOOMED—BUT ROAD USAGE CHARGES
WON’T SOLVE THE PROBLEMBy Jeffrey N. Buxbaum
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ferent gas tax rates in different states, mileage-basedroad usage systems need to be able to tell where milesare driven, which requires an in-vehicle GPS-enableddevice. The back-office systems can then allocate milesappropriately (in a multi-state system) or credit out-of-state miles (in a single-state system).
Drivers that do not want an in-vehicle “tracking”device would be allowed to opt out this technology. Butthis is a flawed solution because drivers who valuetheir privacy would be forced to accept a mileage-basedsystem that cannot credit them for miles driven out ofstate, leading to over-payment. This is no more fairthan a system that lets electric vehicles get away withnot paying at all.
Fairness comes in many fla-vors, and always depends onperspective:
• It is fair to pay for roads inproportion to the amount youdrive. This points to a road usage charge solution.
• It is fair for drivers to pay for the social costs of dri-ving, such as pollution, crashes, medical costs, andgreenhouse gas effects. This points to a system thataddresses the size of vehicle (bigger vehicles causemore severe crashes), and fuel consumption (relatedto pollution and greenhouse gas emissions), andmiles driven.
• Users benefit from simply having access to a trans-portation network, so it is fair to pay a fee even if Ionly drive a little. This points to a flat fee.
• Non-users benefit too. Ask any developer thatwants to build near a new highway interchange or
transit stop. Or look at the many reports with titlessuch as “The Economic Benefits of theTransportation System.” We all benefit from arobust transportation system. In fact, this suggeststhat it would be fair to use personal and corporateincome tax revenues to pay for part of the trans-portation network, with the progressive nature ofthe income tax ensuring that those who benefitmost from the system (i.e., wealthy people pay themost).
This is only the tip of the iceberg. Evaluating fair-ness is daunting, as noted in TRB Special Report 303called “Equity of Evolving Transportation FinanceMechanisms” (a report that I contributed to). At the
risk of vast oversimplificationthe report concludes: “Theequity implications of trans-portation finance mecha-nisms are complex, often con-troversial, and important indecision making. Policy mak-
ers addressing such equity issues need to have a broadunderstanding of the array of issues involved.”
In addition to these “big picture” issues, I haveanother practical objection related to the expensivebookkeeping effort needed to keep track of just a fewdollars. For example, in Washington State, with a per-gallon tax rate of $0.494—second highest in the coun-try—a typical car driven 10,000 miles per year wouldonly pay between $100 and $300 per year in gas taxes.Why create a complicated billing system to distinguishbetween these relatively small amounts of money?
But it gets even more ridiculous. No one is talkingabout an instant transition fromgas taxes to road usage chargesbecause of the extensive publicacceptance and technology chal-lenges, meaning that both sys-tems will be active at the sametime. This transition could last adecade or two. This means thatthe expensive new billing systemwould be used simply to reconcilelegacy gas tax payments andnew road usage charges. For dri-vers of gas guzzlers, this wouldamount to a rebate, and gas sip-pers would have to pay addition-al tax. The net dollar amountsmight be in the tens of dollarsper year for many drivers—hard-ly worth the effort to create a
While industry insiders thinkroad usage charging is great,regular people hate it.
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complicated system for collections and enforcement.
This is by no means a comprehensive discussion,but is enough to illustratethat simply equating milesdriven to responsibility forpaying for roads is too sim-plistic. We do ourselves adisservice by jumping toroad-usage charges as “the”solution that deserves mil-lions of dollars of researchmoney. If we are willing toconsider adopting an unpop-ular, disruptive, expensivereplacement for the motorfuel tax, we ought to alsoconsider alternatives, which may also be unpopularand disruptive, but less expensive to implement andmore aligned with a comprehensive set of social objec-tives.
We should consider some combination of:
• A flat usage fee to pay for access to the transporta-tion system, scaled by vehicle weight to address thesocial costs of crashes.
• A gas tax sized to pay for the social costs of emis-
sions.
• An odometer charge to pay for roadway use.
• An income tax set aside or surcharge to ensure thetransportation system con-tinues to deliver economicbenefits.
In all cases, there wouldbe important nuances tooverlay a federal systemonto systems that might beimplemented in individualstates.
Fantasy? Perhaps. But nomore so than believing thatwe can put in place a new,
complicated, costly, in-your-face road usage charge in aworld where we cannot agree on simply raising gas taxesto keep up with inflation. We owe it to ourselves to con-sider better alternatives. �
Jeffrey N. Buxbaum is a former consultant who spe-cialized in transportation funding and finance issuesover a 30+ year career.
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aecom.com www.sacyrconcesiones.com
Public Works Financing/April 2017 25
PPUUBBLLIICC FFIINNAANNCCEE PPRRIIVVAATTEE PPRROOJJEECCTT FFIINNAANNCCEE($mill.) ($mill.)
State/Local* Priv. Activity Financial Total FinancialEquity TIFIA Bonds Bank Debt Equity % Capital Close Date
91 Express Lanes, CA (TR) 0 0 0 100 30 23 130 7/93
Dulles Greenway, VA (TR) 0 0 0 298 80 21 378 9/93
So. Bay Express, CA (TR) 0 140 0 340 130 21 611 5/03
I-495 Express, VA (TR) 495 589 589 0 630 (1) 27 2,303 12/07
SH 130 seg. 5+6, TX (TR) -142 (2) 430 0 686 210 16 1,326 3/08
I-595, FL (AP) 0 603 0 781 208 13 1,592 3/09
Port of Miami Tunnel, FL (AP) 100 341 0 342 80 9 863 10/09
No. Tarrant Express TX (TR) 594 650 398 0 426 21 2,068 12/09
LBJ Expressway, TX (TR) 490 850 606 0 682 26 2,628 6/10
Denver Eagle rail, CO (AP) 1,312 280 396 0 54 3 2,042 8/10
Downtown/Midtown Tunnel, VA (TR) 582 (3) 422 675 0 272 14 1,951 4/12
Presidio Parkway ph. 2, CA (AP) 0 60+90 0 167 45 12 362 6/12
I-95 HOT Lanes, VA (TR) 83 300 253 0 280 31 916 7/12
East End Bridge, IN (AP) 526 162 508 0 78 6 1,274 3/13
No. Tarrant Exp. 3A/B, TX (TR) 379 531 274 0 442 27 1,626 9/13
Goethals Bridge, NY (AP) 125 474 453 0 107 9 1,159 11/13
US 36 ph. 2, CO (TR) 75 60 21 0 41 21 197 2/14
I-69 Managed Lanes, IN (AP) 80 0 244 0 41 11 365 7/14
I-4 Ultimate, FL (AP) 1,035 950 0 484 103 4 2,572 9/14
Pennsylvania Rapid Bridges (AP) 225 0 721 0 59 6 1,005 1/15
Portsmouth Bypass, OH (AP) 178 209 227 0 49 7 663 4/15
I-77 Managed Lanes, NC (TR) 95 189 100 0 248 39 632 5/15
SH 288, TX (TR) 17 357 299 0 375 36 1,048 5/16
Purple Line transit, MD (AP) 1,599 875 313 0 139 5 2,925 6/16
LaGuardia Central Term., NY (AP) 1,200 0 2,400 0 200 5 3,800 6/16
Total 9,048 8,562 8,477 3,198 5,009 avg. 15% 34,436
Of the total 25 projects:
13 are toll revenue risk concessions 2,668 4,518 3,215 1,424 3,846 avg. 24% 15,814
12 are availability payment P3s 6,380 4,044 5,262 1,774 1,163 avg. 6% 18,622
(TR) Toll revenue financing (demand risk)
(AP) Availability payment financing (sovereign risk)
$5bn Private Equity Invested In 25 Transportation DBFOM Deals(Source: FHWA, Public Works Financing Major Projects Database 11/16)
* excludes public sunk predevelopment costs.
(1) deal restructured in 2014; original equity invested was $348m in 2007.
(2) minus $142m is upfront payment to state by Cintra, not counted in totalinvested capital.
(3) additional public funding invested after financial close to reduce tolls.
26 Public Works Financing/April 2017
U.S. P3 Market Attracts World-Class PlayersSource: Public Works Financing newsletter (4/17)
Investor DevelopersACS Infrastructure (Dragados)Cintra (Ferrovial Agroman)InfraredJohn LaingMacquarieMeridiamPlenary GroupTable Rock CapitalTransurban
Contractor DevelopersAccionaAECOMBalfour BeattyBechtelBouyguesEdgemoorFluorGraniteKiewitLaneOHLParsonsShikun & BinuiSkanskaSNC LavalinVINCIWalsh/Archer WesternZachry
Public Advisors
LegalAshurstAllen & OveryElias GroupFreshfields Bruckhaus DeringerHawkins Delafield & WoodHunton & WilliamsMayer BrownNixon PeabodyNossaman
FinancialCitiErnst & YoungFirst SouthwestGoldman SachsKPMGMacquarie Capital AdvisorsMorgan StanleyPiper Jaffray & Co.Public Financial ManagementRBC Capital MarketsScully CapitalUBSWilliam Blair
Design-BuildersBalfour BeattyBechtelBouyguesClark ConstructionDragadosFerrovialFlatironFluorGraniteHerzogHochtiefKiewitLane ConstructionSkanskaTraylor Bros.Tutor PeriniWalsh/Archer WesternWeeks MarineZachry
Design PartnersAECOM / URSAtkins / PBS&JArupAztecCDM SmithCH2M HillDewberryHDRHNTBI.M. PeiJacobsLochner MMMBerger GroupO.R. ColanWSP|Parsons BrinckerhoffParsons TransportationRaba Kistner
Public Advisors
TechnicalAECOM/URSArupCDM SmithC&M AssociatesCH2M HillHDRHNTBJacobsLea+ElliotLochner MMM GroupWSP|Parsons BrinckerhoffRaba KistnerReynolds Smith and HillsStantec
Private Advisors
to equity:Barclays CapitalBMO Capital MarketsChadbourne & ParkeGibson, Dunn & CrutcherMacquarieScotiabank
to banks/bonds:ArupBaker & McKenzieBTY GroupCleary GottliebClifford ChanceHatch Mott McDonaldHogan LovellsLatham & WatkinsMilbank TweedOrrickWSP|Parsons BrinckerhoffSimpson ThacherSkadden ArpsSteer Davies Gleave
Banks/Bonds/InsurersAssured GuarantyBarclaysBoA Merrill LynchGoldman SachsJP MorganKeyBankPiper Jaffray & Co.RBCScotiabankWells Fargo
InstitutionalInvestorsAllianzAPG InfrastructureCalpersCDPQDallas Police & Fire Pension SystemDIFNorthleaf Capital PartnersOMERSPSP InvestmentsSun Life FinancialTeachers InsuranceTIAA-CREFFULLICO
Na�onal/interna�onal firms pursuing the U.S. P3 market
O&MCobra Industrial ServicesColas USADBIInfrastructure Corp. of America (HDR)Johnson ControlsRoy JorgensonTransfield Services
InsuranceAONLiberty MutualTravelersZurich
Public Works Financing/April 2017 27
SUEZ in North America operates across all 50 states andCanada with 3,430 employees dedicated to environmentalsustainability and leading the resource revolution. The companyowns 15 regulated water utilities, provides contracted public-private partnership services to 84 municipalities, offers watertreatment and advanced network solutions to 16,000 industrialand municipal sites, provides drinking water, wastewater andwaste collection service to nearly 7.5 million people on a dailybasis, processes 55,000 tons of waste for recycling andmanages $3.3 billion in total assets.For more information, visit suez-na.com or contactMary Campbell at [email protected] 201-767-9300.
PUBLIC-PRIVATE SERVICES DIRECTORY
O. R. Colan Associates (ORC) provides a full range of realestate services related to the appraisal, acquisition and reloca-tion phase of design build projects. With more than 24 officesin 16 states nationwide, the company is broadly recognized as aleader in providing real estate solutions for infrastructure pro-jects. ORC provided full turnkey right-of-way services for thefollowing successful design-build highway projects: Segments 1-6 of SH 130 in Austin, TX; the Grand Parkway in Houston, TX;and the SH 183 Managed Lanes and DFW Connector projectsin Dallas, TX; South Mountain Freeway in AZ, the PocahontasParkway, and I-581/Valley View Boulevard Interchange Phase IIin VA; US 158 in NC; Route 3 North in MA; I-64 in MO; I-93 inNH; and Sections 2 & 3 of I-69 in IN. ORC is currently providingright of way services on I-85 in SC and the Wellsburg Bridge inWV. These projects combined involved the acquisition of morethan 3,500 parcels and the relocation of more than 1,200 resi-dences and businesses. Time is money on a design build pro-ject. ORC has the proven ability to deliver the right of way ontime for construction on fast paced projects while meeting allstate and federal requirements. Contact Steve Toth, COO, [email protected] or visit us at www.orcolan.com.
WSP | Parsons Brinckerhoff is a global consulting firmassisting public and private sector clients to plan, develop,design, construct, operate, and maintain hundreds of criticalinfrastructure projects around the world. WSP | ParsonsBrinckerhoff’s experience extends to every form of transporta-tion, including airports, rail systems, buses, roads, and ports.For complex projects procured through public-private partner-ships or using design-build, the company provides projectdevelopment, design engineering, and operations services tocontractors and concessionaires. We apply our world-classtechnical expertise and our deep understanding of local needsto develop innovative solutions that create value for our clientsand for the community the project serves. For more informa-tion please contact: Len Rattigan, Alternative Delivery Director(703) 742-5740; [email protected];Sallye Perrin, Strategic Pursuits Manager(410) 246-0523, [email protected]; Karen Hedlund, Director of Public-Private Partnerships(212) 465-5059, [email protected]; or John Porcari, President, Advisory Services, U.S., (202)661-5302, [email protected]
FFor information abouthow to list your firm in PWF’s
Public-Private ServicesDirectory
contact William Reinhardtat (908) 577-8411 orwww.pwfinance.net
or email: [email protected]
28 Public Works Financing/April 2017
Throughout its 20-year track record, Sacyr Concesioneshas more than proven its expertise and technical know-how, aswell as its financial capacity with committed global investmentamounting to 30 billion dollars. The company specialises ingreenfield projects in which it handles the design, financing,construction and management of assets. This global conceptionof business, combined with its active project management,allows the company to bring added value to its concessions,thereby attracting financial partners. It currently operates 35infrastructure concessions in eight countries (Spain, Portugal,Chile, Peru, Colombia, Uruguay, Italy and Ireland) within suchsectors as motorways (3,605 kilometres), transport hubs, hos-pitals (more than 2,250 beds) and metro lines.These assetshave an average remaining lifespan of 27 years.
Contact: María Muñoz [email protected]+34 91545 5000
Sacyr Concesiones“We create future value”
PUBLIC-PRIVATE SERVICES DIRECTORY
With over $10 Billion in PPP projects, Raba KistnerInfrastructure (RKI) has established its reputation as aleader in quality management programs. We are a nationalcompany that provides professional consulting and engineer-ing services in the areas of Construction QualityManagement, Program Management (PM+)TM, IndependentEngineer and Owner’s Verification and Testing, andConstruction Quality Control/Quality Acceptance Programs,Right of Way (ROW) Management and Acquisition, andSubsurface Utility Engineering to government and industryclients. Our expertise in quality programs goes beyond satis-fying the fundamentals. We ensure that quality programsaddress the unforeseen challenges that arise in Design andConstruction QC/QA programs. Our award winning datamanagement and document control program, ELVIS, pro-vides real time management information to assist in makingtime-critical decisions.
Contact: Gary Raba, D Eng, [email protected] or by calling 866-722-2547.
Plenary Group is North America's leading specializeddeveloper of long-term Public-Private Partnerships (PPP)projects, with more than $11 billion in public infrastruc-ture assets currently under management and offices inVancouver, Toronto, Ottawa, Los Angeles, Denver andSeattle, as well as site offices that manage the construc-tion and operation of our concessions. Our businessmodel relies on strong partnerships with clients, localcontractors, sub-contractors and trades to ensure theefficient and timely completion of projects, with a viewtowards the long-term. Contact Mike Marasco, CEO Plenary [email protected], (425) 223-5741 orOlivia MacAngus, Vice President, CorporateDevelopment [email protected], (416) 902-9695.More information can be found atwww.plenarygroup.com.
Mayer Brown has one of the leading public-private partner-ship practices in the United States. A perennial Chambers Band1-ranked practice for PPP Projects, what distinguishes us fromother law firms is our experience advising clients on transactionsthat have successfully closed from every side of a project. Wehave represented public agencies, sponsors and lenders alike onPPP transactions around the country and across all asset types,including roads, bridges, ports, parking, mass transit and socialinfrastructure.
Contact: George K. Miller (212) [email protected] Narefsky (312) [email protected] R. Schmidt (312) [email protected] Seliga (312) [email protected]
Public Works Financing/April 2017 29
PUBLIC-PRIVATE SERVICES DIRECTORY
Nossaman LLP represents clients in all aspects ofU.S. infrastructure, specializing in PPPs and otherforms of innovative project delivery, finance, operationsand maintenance. Our Infrastructure Practice Group,named a Law360 “Practice Group of the Year” forProject Finance and Transportation in 2016, hasadvised clients in numerous high profile and award-win-ning projects, including:
• MTA’s $2.2B Purple Line Light Rail: Maryland’sfirst PPP project under legislation Nossaman helpeddevelop
• FDOT’s $2.3B I-4 Ultimate Project: PPP AwardsBest Transport Project; IJGlobal North AmericanTransport Deal of the Year; Project FinanceInternational Americas Transportation Deal of the Year;Trade Finance Deal of the Year
• UC’s $1B Merced 2020 Campus ExpansionProject: The first university expansion in the U.S. touse the PPP availability payment mode
• MDOT’s $125M Street Lighting PPP Project:Michigan’s first transportation PPP and the nation’sfirst freeway lighting PPP• IFA’s $1.18B East End Crossing: International Road
Federation Global Road Achievement Award for ProjectFinance and Economics; PPP Bulletin InternationalBest Global Road Project and Best GlobalInfrastructure Project
Contact:Corey Boock, [email protected] Kojima, [email protected] Santiago, [email protected] orPatrick Harder, [email protected]
On the web: www.nossaman.com andwww.InfraInsightBlog.com.
Macquarie Capital is a leading financial advisor, developerand investor in Public Private Partnerships in the US, Canada andglobally. We have supported both private sector and governmentclients to successfully deliver large and complex projectsincluding transport, social and telecommunications infrastructure.Notable North American successes include Denver Fastracks,Elizabeth River Crossings, Goethals Bridge Replacement andKentucky Fiber.
Macquarie combines global expertise and local presence withone of the largest and most experienced teams dedicated toPPP’s in the US and Canada. We provide partners and clientswith a full range of services from project development, projectfinance advisory, debt and equity capital markets, M&A andrestructuring.
We combine financial capacity, technical expertise, deep indus-try and public sector relationships and a creative approach todeliver innovative solutions to complex transactions.
Contact: Jim Wierstra, Head of North American PPPs, [email protected] or +1 (212) 231-6322
Transurban is an infrastructure investor and long-termoperator of urban toll road networks in the U.S. andAustralia – providing effective transportation solutions tosupport the growth and wellbeing of cities. Transurban,working closely with a range of governments, has deliveredmany successful projects under partnership models, includ-ing 13 roads in Australia and two roads in the WashingtonD.C. area. Transurban’s assets incorporate world-class tech-nology and safety features including automatic incidentdetection, electronic speed and lane-control signage, andspecialist tunnel safety systems. In the U.S., Transurbanoperates the 495 and 95 Express Lanes under an innovativedynamic-pricing structure to provide free-flowing travel inone of the nation’s most congested areas.Contact: Christine Manley (571) [email protected]
30 Public Works Financing/April 2017
With more than 40 years of experience, IRIDIUM Concesiones(formerly Dragados Concesiones) is the ACS Group companythat promotes, develops and operates public private partnershipprojects worldwide. With over 100 projects developed in 21countries, including 3,953 miles of highways, 1,029 miles of rail-roads, 16 airports, 18 ports and several social infrastructurePPP projects, IRIDIUM Concesiones is the world leader in thisfield. We are proud to have global presence with local commit-ment. ACS Group companies apply their unsurpassed technicalskills to the planning, design, construction, operation and main-tenance of infrastructures, using the latest technologies in anyarea and providing the highest level of excellence throughout. Asolid financial capability combined with an innovative approachallows IRIDIUM Concesiones to structure the necessary finan-cial resources for any project. Contact: Salvador Myro, [email protected] at +(34) 91 703 85 48 or visit www.iridiumconcesiones.comor www.grupoacs.com for further details.
PUBLIC-PRIVATE SERVICES DIRECTORY
Meridiam is a leading developer, equity investor andasset manager of primary Public Private Partnership (PPP)infrastructure projects with deep expertise in NorthAmerica and Europe. With US$3.8bn of assets undermanagement across three long-term infrastructure funds,and a focus on transport, social infrastructure and environ-mental PPP assets, Meridiam strives to establish a long-term contractual relationship between the public and pri-vate sectors. Meridiam currently manages 32 projectsworldwide, including 9 projects across North America,among which are the Port of Miami Tunnel in Florida, theLong Beach Courthouse in California, and the WaterlooLight Rail Transit in Ontario.
Contact: Joe Aiello [email protected] Tecklenburg [email protected]
Meridiam North America – 605 Third Avenue, 28thFloor NY, NY 10158 – Tel (212) 798-8686 or MeridiamCanada – 357 Bay Street Suite 501 Toronto, Ontario,Canada, M5H 2T7 – Tel (647) 345-3529
www.meridiam.com
Herzog is recognized as a leader and expert contract providerwith innovative management skills that enable us to delivercomplex transportation projects. Our award-winning experienceis extensive and includes the construction of commuter rail,light rail transit, streetcar, freight systems, and highways, alongwith intermodal and maintenance facilities. Our high level of pro-fessionalism and respect for clients is a component of everyjob; we cultivate cooperative relationships with project owners,stakeholders, subcontractors, and the communities in which wework. The strong partnerships we develop with our clients haveallowed us to successfully complete many complex, challengingprojects across North America.
For more information, please contact our main office at(816) 233-9001 or:Joe Kneib, Senior Vice President Market Development—[email protected] Norman, Vice President Estimating—[email protected] Lager, President—[email protected] Van Meter, Director Risk Management—[email protected]
Established in 1884, Kiewit is one of the largest con-struction organizations in North America leveraging a net-work of more than 50 offices to develop a respectedmultifaceted business presence across North America.With a staff of management, technical, financial, commer-cial and legal experts dedicated to successfully deliveringPPP projects, our success is based on the trust that wehave built with government officials, stakeholders and thefinancial community. As a recognized leader in design-build and PPP project development, Kiewit combinesextraordinary financial credibility and extensive resourceswith a creative, solution-oriented approach to ensure apredictable outcome of success for our clients.
Kiewit DevelopmentSam Chai (416) 572-2519 [email protected] Geer (402) 943-1405 [email protected]
Kiewit InfrastructureJoe Wingerter (402) [email protected]
Public Works Financing/April 2017 31
PUBLIC-PRIVATE SERVICES DIRECTORY
Ernst & Young, LLP is a leader in assurance, tax, trans-action and advisory services. We believe in the value ofinfrastructure to our communities and are proud to serveclients as they work to:• Rebuild and modernize existing infrastructure• Invest wisely in new infrastructure to address new andchanging needs, enable growth and achieve a higher quali-ty of life for communities• Bring innovation, foresight and sound economic steward-ship to their major projects, programs and investments,and/or• Identify and attract the funding and financing required toinvest in infrastructure.
We provide finance, business planning, policy, procure-ment, modeling, valuation and tax advice for large-scaleinfrastructure projects, programs, investments and public-private partnerships. We serve state and local governmentclients through our affiliate, Ernst & Young InfrastructureAdvisors, LLC, a registered municipal advisor. We helpclients to achieve their goals.
Please contact: Mike Parker, Senior Managing Director,Ernst & Young Infrastructure Advisors, LLC+1 215 448 3391, [email protected]; or Glenn Johnson, US Infrastructure Tax Leader, [email protected].
AIAI is a non-profit organization formed in the District ofColumbia to help shape the direction of the national PublicPrivate Partnership marketplace. AIAI serves as a nationalproponent to facilitate education and legislation through tar-geted advocacy. AIAI’s Board is comprised of leaders of theconstruction and development industry. Their extensivenational and international experience and industry knowledgeprovides AIAI with a clear direction for developing and advo-cating policy and legislative solutions, allowing more equitableand effective partnerships across diverse market sectorsfrom transportation and energy to educational, health andpublic service institutions. Contact Lisa Buglione (516) [email protected]
For more than a century, HDR has partnered with clients to shapecommunities and push the boundaries of what’s possible. Ourexpertise spans 10,000 employees, in more than 225 locationsaround the world—and counting. Our engineering, architecture,environmental and construction services bring an impressivebreadth of knowledge to every project. Our optimistic approach tofinding innovative solutions defined our past and drives our future.
As consultants, we can help you keep pace with today’s rapidlychanging marketplace. We help you make decisions based on rigor-ous analysis of the economic climate, a thorough understanding ofyour organizational needs and priorities, and 100 years of experi-ence in delivering infrastructure. From strategy and finance todesign and delivery, we help you develop innovative, reliable andcost-effective solutions to your infrastructure challenges.
Learn more at hdrinc.com or contact us:
Sharon Greene, Finance Director
(714) 368-5651, [email protected]
Mike Schneider, Strategy & Development Director,
Transportation
(714) 368-5686, [email protected]
Bill Damon, Strategic Consulting Director, Power
(734) 332-6400, [email protected]
Shawn Koorn, Utility Rates Lead
(425) 450-6366, [email protected]
Public Works Financing• Timely
• Pertinent • Accurate
• Meticulously reported . Real news
. . .EVERY MONTH SINCE 1988
32 Public Works Financing/April 2017
PUBLIC-PRIVATE SERVICES DIRECTORY
Hawkins Delafield & Wood provides legal advisory ser-vices to governmental owners on PPP and alternative deliveryinfrastructure projects in the United States and Canada. Thefirm also represents PPP project investment bankers andlenders.
Our infrastructure legal practice is widely recognized for itsquality and depth. Over a 20-year span, Hawkins has negotiatedand closed more than 200 design-build, design-build-operate,design-build-finance-operate, construction-manager-at-risk, con-cession, asset management, operating services and franchiseagreements for public sector clients in 25 states and threeprovinces. We practice in the transportation, water, wastewater,solid waste, renewable energy and social infrastructure sectors.Leading projects on which Hawkins has served as owner’s leadcounsel include:• Carlsbad Seawater Desalination Project (San Diego County
Water Authority), a Project Finance International water infra-structure PPP deal of the year.• New Long Beach Court Building (State of California), a Bond
Buyer social infrastructure PPP deal of the year.• Vista Ridge Regional Water Supply PPP Project (San Antonio
Water System)Contact: Eric Petersen at (212) [email protected] Grosser (212) [email protected] Sullivan (212) 820-9513 [email protected] Sapir at (973) [email protected]
Formed in 1922, Granite Construction Incorporated istoday one of the largest heavy civil contractors in the UnitedStates. It is positioned in all the major U.S. markets withoffices located throughout the country serving over privateand public clients. Over the past 88 years, Granite hasearned a nationwide reputation as the preeminent builderof quality projects in a timely manner. Always progressive,Granite has developed into one of the top Design-Buildcontractors in the U.S. and has recently enacted anEnvironmental Affairs Policy to take a leading role in theconstruction industry in protecting the environment andour natural resources. Through our corporate SustainabilityPlan, we actively engage in industry, and direct efforts atthe local, state, and federal levels to advocate for adequateand sustainable public infrastructure funding tomaintain and improve America’s transportation system.Granite is nationally recognized for its expertise in themajority of construction sectors including tunnels, highwaysand roadways, dams, bridges, railroads marine, airports,heavy and light mass transit, and have becomerenowned design-build and mega project constructors.Granite leads the market in the design-build turn-keydelivery of complex fast paced transportation projects.
Contact Kent Marshall (831) 728-7549, or 585 West Beach St.Watsonville, CA 95077-5085 www.graniteconstruction.com
Elias Group LLP provides legal and consulting services togovernment and industry. We are a boutique law firm interna-tionally recognized for our expertise in project finance, pub-lic/private partnerships, industrial outsourcing, joint venturesand strategic alliances, and M&A of regulated and non-regulat-ed entities. The firm’s unique accomplishments include the first20-year concession agreement executed in the U.S. for therehabilitation and operation of a municipal wastewater treat-ment facility. Our skills and practical experience are evident inthe multitude of transactions successfully completed.
Contact Dan Elias or Michael Siegel at 411 TheodoreFremd Avenue, Rye, NY 10580; tel: (914) 925-0000fax: (914) 925-9344; or visit our web site: www.eliasgroup.com
Ferrovial Agroman is a leader in the global constructionmarket. In addition to Spain, the company has significant activ-ity in eight other countries: Poland, USA, Greece, UnitedKingdom, Chile, Puerto Rico, Ireland and Portugal. Whollyowned by the same parent company as CINTRA, the world’slargest transportation developer by invested capital, FerrovialAgroman has 80 years of construction experience in DBB,DB, and PPP projects in all types of infrastructure assets.These decades of experience result in 2,500 miles highwayconcessions; 9,475 miles new roads; 16,995 miles rehab ofroads; 304 miles tunnels; 2,523 miles canals; 3,884 mileswater pipelines; 2,392 miles gas and oil pipelines; 29 hydro-electric power stations; 147 dams; 220 water treatmentplants; 21 miles wharfs and ports; 40 airports; 20 stadiums;and 2,920 miles of railways, including 449 miles of HighSpeed Rail.
Contact Daniel Filer, VP of Business Development forNorth America at +1-512-637-8587.
Public Works Financing/April 2017 33
PUBLIC-PRIVATE SERVICES DIRECTORY
Globalvia started its activity in January 2007, as a result oftwo Spanish companies’ interests in the infrastructure sec-tor, FCC and Bankia. From 2011 till 2013, Globalvia began afund raising process aimed to develop its concessions port-folio and the searching of future inversions. This capital camefrom three pension funds: OPTrust (Canada), PGGM(Netherlands) and USS (United Kingdom), which have finallyinvested 750 million euro through a convertible bond.
In August 2015, concurring with the sales process, thefunds exercised their preferential acquisition right over thecompany’s shares. The full process then ended in March2016 when OPTrust, PGGM and USS officially became inthe new shareholders of 100% of the company.
Globalvia, a worldwide infrastructure concession leader,currently manages 28 PPP projects among highways, rail-ways, hospitals and ports. The company is present in 8countries: Spain, USA, Ireland, Portugal, Andorra, Chile,Costa Rica and Mexico, where it manages more than 1,500Km of highways and more than 90 Km of railways, with a sin-gle objective: the efficient operation of its assets.Contact:Globalvia Spain > +34 91 456 58 50 [email protected] USA > Michael Lapolla +1 (908) [email protected]
Baker & McKenzie has a long history of involvement inthe development of infrastructure projects and PPP pro-jects in North America. We have represented bid leaders,consortium partners and lenders in a number of high pro-file projects, placing us among the few law firms with trueexpertise in the area. Our experience covers the manycomplex tasks involved in the development of such majorinfrastructure and PPP projects, including:• project and transaction structuring• consortium structuring• tax planning• project financing• negotiation of key project documents• public offeringsOur broad experience enables us to act efficiently for ourclients through the use of relevant and effective prece-dents that have been executed in past transactions. We offer our clients:• an understanding of the key drivers that influence publicagencies in evaluating bids;• a proven project management capability and ability tobring together legal arrangements in complex infrastruc-ture projects in tight timeframes; and• an in-depth knowledge of applicable, federal, state,provincial, local and/or municipal laws with an unparalleledinternational perspective.Key contacts: José A. Morán at (312) 861-2829,[email protected]; Michael S. Smith at (312) 861-8930,[email protected];James P. O'Brien at (312) 861-7588,james.p.o'[email protected]
KPMG’s Global Infrastructure professionals in the US and Canadaprovide specialist Advisory, Tax, Audit, Accounting and Compliancerelated assistance throughout the life cycle of infrastructure pro-jects and programs. Our teams have extensive local and globalexperience advising government organizations, infrastructure con-tractors, operators and investors. We help clients ask the rightquestions and find strategies tailored to meet the specific objec-tives set for their businesses. KPMG can help set a solid founda-tion at the outset and combine the various aspects of infrastructureprojects or programs – from strategy, to execution, to end-of-life orhand-back.
Contact Andy Garbutt, Practice leader for KPMG’s US team, at+1 (512) 501-5329 or e-mail: [email protected]
or www.kpmg.com/infrastructure.com
FFor information abouthow to list your firm in PWF’s
Public-Private Services Directorycontact William Reinhardt
at (908) 577-8411 orwww.pwfinance.net
or email: [email protected]
34 Public Works Financing/April 2017
PUBLIC-PRIVATE SERVICES DIRECTORY
Abertis is the world leader in the toll roads sector with 29concessions and over 8,300 kilometers under management.The Group, with a presence in 12 countries and over 14,300employees, is geared towards value creation through infra-structure investments that contribute to economic and socialdevelopment in these areas. Since its inception in 2003,Abertis has invested over 15,000 million euro in the coun-tries in which it operates.
After a successful internationalization process in the last5 years, more than 70% of Abertis’ revenues are generatedoutside Spain. France is nowadays its biggest market byrevenues and Ebitda, followed by Spain and Brazil. Abertisis listed on the Spanish Stock Exchange and is a constituentof the IBEX 35. It is present also in the main internationalindexes such as FTS Eurofirst 300 and Standard & Poor’sEurope 350.
Contact: Communications Direction (+34) 932305039
Egis has an unrivalled experience in most types of infrastruc-ture PPP and concessions: motorways, bridges, tunnels,urban infrastructures and airports. We are experienced with alltypes of remuneration (real toll, shadow toll or availabilityschemes). Egis Projects relies on the specialized skills of itsshareholders: Groupe Egis, a leader in infrastructure engineer-ing, and Caisse des Dépôts. Egis Projects acts as promoter,developer and investor in concession/PPP projects, asturnkey equipment integrator, as operator and manager of air-ports and, via its wholly owned subsidiary Egis RoadOperation, as operator of roads and motorways. Egis Projectshas also extended its activities to electronic toll collection, tollnetwork interoperability, and safety enforcement as well asassociated services for road users under the Easytrip brand.Egis Projects has financially closed 25 infrastructure projectsfor a total value of 12 bn €. Egis Road Operation is operating39 motorways totalling 2,400 km in 18 different countries.
Contact: Pascal Lemonnier, [email protected] or tel: +33 1 39 41 51 60
www.egis.fr
Engineering andEnvironmental Solutions
TYPSA-AZTEC s an international consulting engineering firmwith over 50 years of experience successfully executing majorinfrastructure projects. Our 2600 professionals work in multidis-ciplinary teams to improve and sustain enhanced living condi-tions around the world. Our major services include:Transportation, Rail and Transit, Environmental, Energy and FieldServices. We are internationally recognized with top industryrankings and awards. In all we do, we seek balanced solutionsfor our clients, the public and the environment.
For more information, please contact Rafael Valero (480) [email protected] orRobert L. Lemke, Jr. (602) [email protected]
www.typsa.com www.aztec.us
Public Works Financing/April 2017 35
C&M Associates is a U. S. toll and managed lanes traf-fic & revenue specialist firm independently serving public andprivate sector clients since 2004. Our services for stateDOTs include project screening and feasibility, planning leveltraffic and revenue forecasts, traffic projections for environ-mental studies, operational analysis, risk analysis and invest-ment grade traffic and revenue studies to support bondissuance for availability payment and 63-20 structures.Private client services include advisory on behalf of equity:Investment grade traffic and revenue studies to support traf-fic risk concession bids, financing support services beforelenders, investors and TIFIA, risk analysis of projected fore-casts and operational analysis. Advisory on behalf oflenders: Peer review of equity traffic and revenue forecasts,development of lender case forecasts and risk analysis.
Contact Carlos M. Contreras at (972) [email protected]
PUBLIC-PRIVATE SERVICES DIRECTORY
CDM Smith provides lasting and integrated solutions inwater, environment, transportation, energy and facilities topublic and private clients worldwide. As a full-service consult-ing, engineering, construction, and operations firm, we deliverexceptional client service, quality results and enduring valueacross the entire project life cycle.
CDM Smith is internationally recognized for utility, toll roadand public-private partnership expertise, serving public andprivate sector clients on hundreds of infrastructure projectsworldwide. For more than 60 years, CDM Smith has workedto place $85 billion of revenue-based financings and provideunparalleled credibility in today’s financial markets.Visit us at cdmsmith.com—or contact:Ed Regan (803) 251-2072Kamran Khan (630) 874-7902Joe Ridge (603) 222-8320
Cintra is the leading private-sector transportation infrastructurecompany in the world, with experience spanning nearly 50 years ofinnovative highway development on four continents. Today, its port-folio includes more than 1,200 miles of managed highways globally,representing a total global investment in roadway improvements ofover $23.5 billion. Cintra's parent company, Ferrovial is recognizedas one of the world’s largest private operators of transportationinfrastructure and a leading services provider. It generates net rev-enues of $10.7 billion a year, has operations in more than 15 coun-tries and assets totaling approximately $27.6 billion. Ferrovial’s busi-ness model is focused on end-to-end infrastructure management,design, construction, financing, operation and maintenance. With thisaim, the company is active in complementary sectors, such as air-port and toll road construction and operation, as well as services.
Contact: Ricardo Bosch, Director North America BusinessDevelopment, [email protected], orCarlos Ugarte, Corporate Development and Business Direction+34 91 418 5606. More information: www.cintra.us
Assured Guaranty, the leading provider of bond insurance, hashelped public-private partnerships reduce the cost of financingessential public infrastructure and achieve smooth transaction exe-cution for decades, even during extremely difficult market condi-tions. With financial strength rated AA by S&P, AA+ by KBRA, andA2 by Moody’s, all with stable outlooks, Assured Guaranty MunicipalCorp. helps broaden the investor base and improve the cost effi-ciency of infrastructure financings by unconditionally guaranteeingtimely payment of principal and interest. Investors are attracted tothe insured bonds’ increased market liquidity, as well as AssuredGuaranty’s credit selection, underwriting, negotiated terms, con-struction period coverage and ongoing surveillance.
Contact: Lorne Potash at [email protected](212) 261-5579
For additional information, visit AssuredGuaranty.com.
36 Public Works Financing/April 2017
Advertiser Index
Abertis Corporate CommunicationsDirection (+34) 932305039
Cintra, S.A.Ricardo Bosch [email protected] Ugarte [email protected]+34 91 418 5606
EGIS ProjectsPascal Lemonnier, +33 1 39 41 51 [email protected] www.egis.fr
Ferrovial AgromanDaniel Filer (512) 637-8587
GlobalviaGlobalvia Spain +34 91 456 58 50 [email protected] Lapolla, +1 (908) [email protected]
Granite Construction Inc.Kent Marshall (831) 728-7549
Herzog(816) 233-9001Joe Kneib [email protected] Norman, [email protected] Lager, [email protected] Van Meter, [email protected]
Iridium ConcesionesSalvador Myro (34) 91 703 85 [email protected]
KiewitKiewit Development
Sam Chai (416) [email protected] Geer (402) [email protected]
Kiewit InfrastructureJoe Wingerter (402) [email protected]
Meridiam InfrastructureJoe Aiello [email protected] Tecklenburg [email protected]
WSP | Parsons Brinckerhoff Len Rattigan (703) [email protected] Perrin (410) [email protected] J. Hedlund (212) [email protected] Porcari (202) [email protected]
Plenary GroupMike Marasco in the U.S. (425) 223-5741 [email protected] MacAngus in Canada(416) 902-9695 [email protected]
SacyrMaría Muñoz +34 91545 [email protected]
Suez Water Inc.Mary Campbell [email protected]
TransurbanChristine Manley (571) [email protected]
Assured GuarantyLorne Potash (212) [email protected]
Macquarie CapitalJim Wierstra at +1 (212) [email protected]
AECOMSamara Barend (212) [email protected]
CDM Smith Ed Regan (803) 251-2072Kamran Khan (630) 874-7902Joe Ridge (603) 222-8320
C&M Associates Carlos Contreras (972) [email protected]
Ernst & YoungMike Parker +1 (215) [email protected] [email protected]
KPMGAndy Garbutt +1 (512) 501-5329
O.R. Colan AssociatesSteve Toth [email protected]
Raba KistnerGary Raba (866) [email protected]
TYPSA-AZTECRafael Valero: (480) [email protected] L. Lemke, Jr., PE (602) [email protected]
Baker & McKenzieJosé A. Morán (312) [email protected] S. Smith (312) [email protected] P. O’Brien (312) 861-7588james.p.o’[email protected]
Elias GroupDan Elias or Michael Siegel (914) 925-0000fax (914) 925-9344 or www.eliasgroup.com
Hawkins Delafield & WoodEric Petersen in NY (212) 820-9401Ron Grosser in NY (212) 820-9423Rick Sapir in Newark (973) 642-1188Joe Sullivan (212) 820-9513
Mayer BrownGeorge K. Miller (212) [email protected] Narefsky (312) [email protected] R. Schmidt (312) [email protected] Seliga (312) [email protected]
Nossaman LLPCorey Boock, [email protected] Kojima, [email protected] Santiago, [email protected] Patrick Harder, [email protected]
www.infrainsightblog.com
AIAILisa Buglione (516) [email protected]
ARTBARichard Juliano (202) [email protected]
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