Transurban’s US boss urges Congress to reconsider asset recycling


“The boldness off public officials to use public private partnerships is decades before the US – we’re still in our adolescence here,” she said.

Her comments came as Peter Fazio, the new Democrat chairman of the powerful House transport committee, late last week opened the first hearings of the new Congress into preparations for bipartisan infrastructure package.

America’s infrastructure push is seen as one of the few areas for potential bipartisanship between the Democrat-led House and the White House. The prospect of a surge in US spending also interests Australian construction firms and providers of superannuation capital such IFM Investors and Macquarie.

Despite the opportunities there is considerable concern that if a Congressional deal doesn’t emerge in the next several months, the politics of the 2020 presidential campaign will overwhelm any attempt at cooperation across the party aisle.

Mr Defazio has noted that by some estimates America’s un-funded infrastructure needs over the coming decade amount to $US2 trillion. Bloomberg

Democrats are now focussing on pushing their Republican counterparts to support an increase in America’s petrol taxes, which haven’t been indexed since 1993, a move that has the support of US business.

Mr Defazio has noted that by some estimates America’s un-funded infrastructure needs over the coming decade amount to $US2 trillion ($2.8 trn), a figure that includes sewerage treatment, water, electricity, airports, waterways and dams.

Speaking at an infrastructure forum hosted by the US Chamber of Commerce last week, Mr Defazio lamented the failure of last year’s infrastructure proposal from the president, which included measures to spur the use of public-private partnerships as well as asset recycling, via a bill written by then White House infrastructure czar DJ Gribbin.

“I was pleased when [Mr Trump] upped the ante last year from $US1 trillion to $US1.5 trillion, but unfortunately follow-through from his staff, the DJ Gribbin plan, was actually to reduce investment in transportation and then sell everything off through what’s called asset recycling, privatising,” he said.

Nobody on either side of the aisle thought “that was a good idea . . . it was a thought piece that went into the wastebasket”, he said.

Companies such as Transurban – which signed an agreement last month with the Democrats-led state of Virginia for more than $US1 billion in transport infrastructure – are are trying to change Mr Defazio’s mind.

“I was disappointed to hear the chairman dismiss asset recycling,” Ms Aument said.

One problem, she said, is that asset recycling tends to be mixed up in arguments about specific deals, rather than as a broader mechanism.

“It’s not about a transaction; it’s about an opportunity to fund desperately-needed greenfield transportation projects, and an opportunity to improve services,” she said.

“What we need to do is shift the conversation away from the financial transaction into how we improve service for customers – and that’s how we’re ultimately going get traction on some of these solutions.”

Mr Defazio remains skeptical.

He told last week’s chamber conference that while public partnerships have a place in funding, they won’t work for the bulk of projects that are badly needed in America.

They “are a tool, but they’re not going to get us there”, he said

“We need a federal government making substantial investments in a national transportation system, not state by state,” said Mr Defazio.

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