SPOT IT. SOLVE IT. Maintain the highest security for passengers and staff, deter crime and vandalism, and respond quickly to emergencies with crystal clear video of your entire operation, including fleets, stations, depots and park-and-rides. Get the complete picture marchnetworks.com/masstransit 24 | Mass Transit | MassTransitmag.com | APRIL/MAY 2017 and simply add them on to the $20 trillion of existing federal debt? Will the feds demand the bonds be paid back by the borrowing entity? Or will there be some combination of both? Obviously if the bonds are paid back, the Infrastructure Bank is replenished to fund more projects. Some Numbers How much money is in play? Th ere is roughly $2.6 trillion off shore, eligible for repatriation. Assume two-thirds, or roughly $1.8 trillion, is repatriated. Using a two-to-one ratio of $2 million in RIBs for $1 million in tax-free cash, the result would be an Infrastructure Bank of $1.2 trillion. With current T-Bond rates around 4.25 percent, the annual interest payments would be $50 billion per year. Th e federal budget would have to comprehend that amount. With $1.2 trillion Infrastructure Bank, and P3s using a 40/60 public-private ratio, $3 trillion of infrastructure can be funded. Creative fi nancing methods, including passenger facility charges, user fees, transferable development rights, as well as more typical fi nancing methods, such as gas taxes, transportation ticket surcharges and sales taxes will have to be utilized. Potentially contentious discussions may occur during negotiations regarding how the fi nancing revenues are divvied up among the entities building the infrastructure, recognizing that there are limits on a user’s willingness to pay. If the fees are too high, revenues from the project can be impacted which will adversely aff ect the project’s return on investment. Potential Infrastructure Projects $3 trillion is an impressive amount of infrastructure, but ASCE has stated that the work needed to bring national infrastructure up to a state of good repair (SOGR) actually exceeds that number. It is fair to assume, therefore, that there will be some combination of both SOGR and new infrastructure. Th ere is no shortage of attractive candidates: NextGEN air traffi c control ($35 billion); Gateway Project - NY/NJ ($25 billion); positive train control - freight and passenger rail ($15 billion); California highspeed rail ($70 billion); Northeast Corridor high-speed rail ($150 to $250 billion); and many, many more. Th ese numbers do not include hundreds of billions required for water and sewer systems (e.g. Flint, Michigan), school buildings, inner-city revitalization and Veterans Administration hospitals — all potential projects that have been mentioned by the Trump Administration. Th ere is no denying that there is a signifi cant need for infrastructure investment. RIBs can be the solution that fi nally compels the United States to make signifi cant progress in that direction. Richard J. Arena is managing partner of ARC Systems International LLC. He is president of the Association for Public Transportation (APT) and is on the advisory board of the US High Speed Rail Association. Even with RIBs, creative fi nancing methods will need to be utilized.
MassTransit_AprilMay_2017
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