Dive Brief:
- Outgoing Secretary of Transportation Anthony Foxx said the private investment strategy contained in President-elect Donald Trump's $1 trillion infrastructure plan can meet no more than 20% of the country's infrastructure requirements, according to the Associated Press.
- Foxx said that public-private partnerships (P3s) would be beneficial to the overall plan but that direct federal spending is necessary to ensure success. This opinion echoes that of Senate Minority Leader Chuck Schumer, D-NY, and other Democrat leaders.
- Foxx emphasized that channeling funding — both private and public — in the right directions is the most crucial aspect of successful infrastructure improvement.
Dive Insight:
Despite the AP report, more public agencies are exploring the upside of handing over expensive and necessary infrastructure and public works projects to private entities through P3s. Experts say this allows even municipalities with the most limited budgets to leverage the little money they have across a larger number of initiatives, as the P3 finances the lion's share. This was true in Long Beach, CA, where a P3 financed such a large portion of a new city civic center complex that the ground-up construction required less up-front cash from the city than if it had renovated the existing structure.
According to a recent Altus Group survey, investors are increase their focus on infrastructure projects. Reportedly energized by the Trump-inspired attention on infrastructure issues, top U.S. real estate execs, given a hypothetical $1 billion to invest as part of the poll, said they would put 15.5% of that money into infrastructure projects — a 215% increase from last year — and considered it a safe, profitable option for 2017.
During his tenure as DOT head, Foxx built a reputation as a forward-thinker in regard to future methods of transportation. Almost a year ago, he made an appearance at the Hyperloop Pod Competition Design Weekend at Texas A&M University and said the U.S. should "lean in" to the Hyperloop concept. While his likely successor, Elaine Chao, has expressed her intent to tackle the country's infrastructure woes head on, it's unclear whether she would recommend federal funding for such a strategy.
