The Build America Transportation Investment Center has quietly helped shepherd $18 billion for 12 transportation infrastructure projects in the U.S. with half of them involving private investment, said Andrew Curtis Right, executive director of the investment center and counselor to the U.S. secretary of transportation, Tuesday at the CG-LA 7th North American Infrastructure Leadership Forum in Washington.
The center was part of the Obama administration's Build America program unveiled last year.
“I'm from the government and I'm here to help,” said Mr. Right, who was a founder of Cherry Lane Capital, a firm that invested in infrastructure operating companies and before that, a partner with Goldman Sach's infrastructure investment group.
The center's role is to assist private investors and government entities to access federal transportation credits to support infrastructure projects. The center does not approve the loans.
The various federal transportation programs have enough credit to fund more than $40 billion of infrastructure improvements annually with existing funding, Mr. Right said.
“We have (private) investors ready to jump in but they can't identify projects,” Mr. Right said.
The center, in part, helps private investors including infrastructure money managers navigate the permitting process and identify governmental entities willing to do a public-private partnership for infrastructure projects, he said.
In response to an audience question, Mr. Right mentioned that the U.S. Environmental Protection Agency has set up a similar center to assist cities, counties, states and other governmental entities, as well as private investors, access governmental credit for water infrastructure projects.
In a separate presentation at the CG-LA conference on Tuesday, Frank Vacca, chief program manager of the California High-Speed Rail Authority, said the authority is accepting recommendations from the private sector to include private financing along with public funding in the form of public-private partnerships for the state's high-speed rail project.
Increasing the number of projects available for private investment is necessary for institutional investors that have been increasing their infrastructure allocations to invest more capital in U.S. infrastructure, said Edward M. Smith, president and CEO of Ullico, a union-owned insurance company and infrastructure and real estate money manager, in an interview. Ullico has $5 billion in assets under management.
Currently, the majority of the U.S. institutional investor capital is being invested around the world and not in the U.S., he said.
“We need to find the projects. The money is there,” Mr. Smith said.
“It's a huge education challenge” to encourage cities, counties and states to include non-governmental dollars, including institutional investor capital in public infrastructure projects, he told the conference audience during a panel discussion on Monday.In a separate address on Tuesday afternoon, Virginia Gov. Terry McAuliffe chided Congress for failing to pass the transportation bill and, in general, not doing more to invest in infrastructure nationwide.
“We have got to get the federal government in the game,” Mr. McAuliffe said.
“We need a sustainable mechanism to fund infrastructure,” he said. “It's unfathomable that the federal government can't get its act together.”
Rep. Charles W. Boustany Jr., R-La., said in remarks on Tuesday that the gasoline tax is insufficient to fund highways in the U.S.
“We will have to come up with a new user fee that is broad-based and sustainable,” he said.
The U.S. Department of Energy has been moving ahead with a program announced in June in which institutional investors including pension plans and sovereign wealth funds committed to invest about $1.7 billion in clean energy, said Kenneth Alston, special adviser for finance, office of the secretary, U.S. Department of Energy, in an interview.
A new group, tentatively called “Aligned Intermediaries,” is currently being formed to identify and assess clean energy investment for the consortium of institutional investors. The consortium is expected to make investments directly and together with managers including private equity firms, Mr. Alston said.
