Kary Witt, President of the IBTTA and Pat Jones, Executive Director and CEO, talk about the need to put aside partisan perspectives in order to deal with the current economic crisis
There are thousands of miles of infrastructure in the US in need of rehabilitative measures, says Kary Will. that represents tens of billions of dollars'-worth of work which would help the US economy post-recession.
Kary Witt, President of the IBTTA and Pat Jones, Executive Director and CEO, talk about the need to put aside partisan perspectives in order to deal with the current economic crisis
Beyond the fine talk and the general agreement that Something Must Be Done by government to arrest and turn the current economic crisis in the US, the reality is that partisan politics and continued self-interest among transportation industry representatives is hampering progress. Necessity being the mother of invention it is time, say the
Silo thinking, says Jones, starts at the very top: "The current stimulus package faces a rough ride when it comes to getting enough votes in the Senate and the Republicans seem to be leading the PR effort against it. They're arguing that some of the proposed measures are more about spending than stimulus and even though they're focusing on something less than 1 per cent of the total proposed outlay they're gaining traction. We have to believe that everyone wants to move things forward but partisan politics are getting in the way.
"Within the transportation sector, the same is happening. States, the bodies representing road builders, transit, tolling and other sectors are all pursuing individual interests.
"'The industry' is a mythical place. It's not a single entity. It's made up of numerous stakeholders. They need to be finding common ground and should certainly be going after a level of satisfaction. But they should also accept compromise."
"Would like to meet..."
Witt says that an important outcome of IBTTA's last Winter Board Meeting was an agreement that the Association needs to "go looking for friends in unconventional places"."I think we all have too narrow a vision of 'who' the tolling industry is," he adds. "We need to broaden our horizons. Alliances need to be formed and this needs to happen quickly; we haven't the time to sit around talking about it, we need to do it. One important element of any such cooperation is that you don't necessarily lose your agenda by joining up with others." Jones: "So much of building support is about people and relationships. It's very easy to be mistrustful of a faceless organisation but once you sit down and break bread it's harder to turn your back on a known name and a face."
Any such effort is still in its formative stages, however.
Short-term needs
The National Surface Transportation Infrastructure Financing Commission, chaired by Robert Atkinson is just about to present its findings (see interview on pp.35-36 of this issue) but there is already a clear need for a bigger 'toolbox' of funding mechanisms, Jones continues."Vehicle Miles Travelled [VMT]-based funding is certainly the most equitable solution but how do we roll it out? "Stimulus is not necessarily about investment for the long term. You have to dodge the nearest bullets first. Rob Atkinson's
Critics of the stimulus package argue that there is good reason why many of the 'shovel-ready' projects requested by the Obama Administration haven't already been built. But Witt, whose day job is as Manager of San Francisco's Golden Gate Bridge, says there is plenty of bricks-and-mortar work out there which isn't wasteful.
"There are plenty of unglamorous, routine things which meet the stimulus criteria. There are thousands of miles of infrastructure in the US in need of rehabilitative work. That's billions of dollars'-worth that isn't just make-work; billions of dollars'-worth that'll make the country fitter when it emerges from recession." Jones's impression is that rehabilitative work forms a significant part of the 'shovel-ready' stuff. He goes on to highlight a significant difference between his Association's members and other transportation stakeholders: "My members are organisations which generate their own revenues. That makes us different from state and local DOTs, for instance.
"A major concern at the moment is access to credit. Borrowing is a challenge. We're going to be pushing in the coming months for expansion of TIFIA funding." The 1998 Transportation Infrastructure Finance and Innovation Act established a Federal credit programme for eligible transportation projects of national or regional significance under which the
The programme's fundamental goal is to access Federal funds by attracting substantial private and other non-Federal co-investment in critical improvements to the nation's surface transportation system. USDOT awards credit assistance to eligible applicants, which include state departments of transportation, transit operators, special authorities, local governments, and private entities.
TIFIA draws on annual appropriations and, along with the stimulus package and the upcoming Transportation Reauthorization Bill, represents the "three universes" of funding IBTTA will be focusing on, says Witt.
"Capital dry-up is our biggest problem. It is seriously hampering quite a number of projects," he continues. "There are two possible solutions: the government infuses more money into commercial institutions, the banks, or else becomes a direct lender itself. The point is that we're not asking for a hand-out. We can generate revenues and pay back over time." Jones notes that many toll agencies do not in any case like going after Federal funding because of the strings attached. Many as a consequence have no interest in stimulus funding. IBTTA is therefore encouraging the Federal Government to expand access to capital via other means, and to help in finding the buyers of bonds that will allow projects to go forward.
A problem is that banks have not passed on the funds which the government has already given over. Witt: "The question is, how much stimulus is it going to take? The financial sector has already received $350 billion, to almost zero effect. There's talk of a similar sum being released. But will that simply disappear, too? There are also questions over accountability, over pushing that much money into the system so quickly without a clear idea of where it's going.
"And all that money, $700 billion, is borrowing - deficit spending. The US Government doesn't have it. That's why it's important that the projects which receive funding are worthwhile. That, surely, has to be a common aspiration?"
Towards sustainability
What is clear is that the US, in the form of low-cost mortgages and financial derivatives, has spent beyond its means. The economy needs to be re-booted. Part of the effort of re-booting has to be the adoption of the principle of better, sustainable funding systems. Tolling, says Jones, exemplifies that thinking."Ubiquitous VMT charging, for example, is a beacon. We're trying to help our members articulate that. The 'user pays' principle affects travel decisions and also where to build new capacity. It gets us away from the 'Bridge to Nowhere' mentality and pushes us to invest in projects of real value. People invest in toll facilities in expectation of getting bonds paid and there are very stringent criteria when it comes to satisfying viability." Another oft-misunderstood mechanism is Public-Private Partnerships (PPPs). Both Jones and Witt note that the paranoia attached to PPPs is a curiously American phenomenon. It is an area where, they feel, the country needs to look abroad and learn.
"There's actually nothing wrong with someone making a profit, especially if it allows things to get done that otherwise might not," says Witt. "But we need a more open mind on the part of Federal and state governments."
Delay upon delay?
The potential effect on governmental thinking of the much-anticipated National Surface Transportation Infrastructure Financing Commission report is at the forefront of many people's minds."We're very hopeful that the report will have a positive effect on Congress," says Jones.
"The Reauthorization Bill will probably be delayed. We have a rich history of that - SAFETEA-LU, when it emerged, was two years late. There's also the concern that the stimulus package may cause Congress to punt on reauthorisation. It makes it all the more important to get the message across that easing the restrictions on tolling interstates and other Federal-aid highways would give states more flexibility when it comes to funding infrastructure." Another element to consider is that, motivated by the need to make a return on investment and maximise revenues, tolled facilities tend to be among the most highly instrumented of roads, bridges and tunnels.
"That means the tools are already in place with which to implement congestion charging," states Witt. "Again, that's going to be an important element of optimising our roadways once the upturn kicks in."
Shifting emphasis
The current economic situation has pushed the IBTTA to communicate more frequently with its members than ever before. As well as increasing the number of informal member surveys, the Association has looked to restructure its formal meetings. In an effort to improve education, training and networking opportunities, meetings this year will follow the 'hot topic' formula."The feedback we're getting from members is that they're reaching out to each other for ideas and best practice," says Witt. "There are best practices emerging - innovation goes on even if the economy stalls but there need to be effective ways in which such developments are communicated." One of those hot topic events, 'Managing in an Era of Changing Economic Times', taking place 19-21 April at The Palace Hotel, San Francisco, CA and hosted by Witt's parent organisation, The Golden Gate Bridge, Highway & Transportation District, as well as the
