#AceFinanceNews – UNITED STATES (New York) – When members of the House Transportation Committee trekked this morning to Manhattan for a roundtable discussion on private financing for public projects — also known as public-private partnerships, or P3s — with financiers from J.P Morgan and other firms, they got a message of both opportunity and caution.
“The focus on U.S. infrastructure from participants around the globe has never been at this high a point,” said Jamison Feheley, managing director and head of the public finance team at J.P. Morgan, which recently served as lead banker to the state of Washington on a $1.1 billion toll revenue bond financing program for building a new bridge across Lake Washington to replace an ageing span.
He cited reasons for the interest: “The attractiveness of U.S. assets, the stable political environment, and the long-term nature of the assets, the stable and predictable returns.” He told the panel “the amount of calls we field on a weekly basis from participants around the globe asking ‘how do we invest in U.S. infrastructure?’ – I’ve never seen anything like it.”
A convergence of forces is driving interest in P3s, including low interest rates, pension funds’ searching for predictable returns, and an unwillingness by Congress to increase gasoline taxes to finance infrastructure building. Or as Rep. Michael E. Capuano, D- Mass., put it, “because we in Congress don’t have the courage at the moment to actually do what we have to do on the Highway Trust Fund,” which is facing inadequate revenues from the gas tax ……………