Conference Presentation, Panel
Paving the Way to Next-Generation Infrastructure
Milken InstituteDale Bonner, John Delaney, Charles Harrington, James Pass, Jim Pass, Chuck Harrington
- Plenary Concessions manages just under $20 billion in public assets across Australia, Canada, and the U.S., with Guggenheim actively expanding its platform over recent years to attract institutional capital for project life cycles.
- The U.S. ranks approximately 16th globally in infrastructure quality, lagging significantly behind China and India, while European greenfield markets are expected to remain slow due to limited new construction and a competitive brownfield sector.
- Future investment opportunities are anticipated to increase globally, specifically in the Middle East, Canada, and Singapore, as communities develop sophisticated financing mechanisms and seek synergy between private finance and public needs.
- Congress is expected to pass the Infrastructure 2.0 Act to close the U.S. infrastructure gap to an A-minus grade, a target estimated to require approximately $3 trillion in investment.
- Every dollar of government infrastructure spending is projected to generate approximately $1.92 of economic growth, and the American Infrastructure Fund aims to leverage initial corporate capital of $50 billion into a total size of $500 billion to $750 billion over a 50-year period.
- Ending the deferral option on overseas corporate earnings is expected to generate $170 billion in aggregate tax revenue, with $120 billion allocated to the Highway Trust Fund to create six years of transportation bill funding.
- Only states lacking robust public-private partnership legislation are expected to receive 65% of their allocation from the American Infrastructure Fund, while regional accelerators and presidential fast-track approvals are proposed to streamline permitting.
- Major transportation finance programs like TIFIA are expected to take 10 years to fully gain traction with sponsors and construction, and public-private partnerships for transportation will likely remain limited to specific communities while most infrastructure remains taxpayer-funded.
- Parsons Enterprises, established 10 to 12 years ago, is reinvesting in internal teams to develop multi-disciplinary capabilities for complex design-build and P3 projects, responding to a shift in the U.S. market toward these models.
- Water and wastewater systems in California and globally are expected to see increased investment opportunities driven by financing streams from universal water billing.
- Clients face uncertainty regarding long-term asset capacity due to emerging technologies like driverless cars, leading to future contracts increasingly incorporating mechanisms to accommodate changes in asset use despite the difficulty of modifying large transportation systems locked in for decades.
- Bullet trains in Florida, Texas, and California are expected to face ongoing struggles regarding the lowest cost of capital and asset control, while private industry is expected to lead innovation in areas like Hyperloops and new paving materials that are currently not acceptable within U.S. permit processes.
- The U.S. infrastructure market is expected to continue competing globally with firms from Japan, China, Korea, Brazil, France, Italy, Germany, and the U.K., requiring constant innovation for survival.
- U.S. infrastructure projects are expected to remain slower and more bureaucratic compared to markets like China where central government powers allow for rapid deployment, and proposals to condition funding on accelerated approvals are expected to face political pushback.
- Treasury proposals may introduce revenue-sharing structures altering how state or local governments partner with private sponsors, and a six-year transportation bill is expected to be a significant achievement providing funding frameworks insulated from the annual appropriations cycle.