The Honorable David Price, Congressman for North Carolina’s Fourth District, gave the opening remarks at the conference, remarking, ironically on the fact that his 40 minute commute from Durham to Chapel Hill proved the need for such a conversation. He spoke of North Carolina’s infrastructure and the fact that the state-sponsored AMTRAK service between Charlotte and Raleigh is one of the best. He then addressed the elephant in the room, the $2 trillion gap in infrastructure investment currently plaguing the United States. Congressman Price said there was “no silver bullet” to fill the void, but addressed a number of issues and outlined a number of solutions.
First, there is a political lack of will to deploy funds. The fact that the motor fuel tax was last adjusted 25 years ago is a case in point. Increasing gas tax is a no-brainer and starting place. Tolling systems are a second option, met with mixed reaction by the public. Congressman Price stated the need for investment beyond the Fast Act and addressed the shortcomings of the Trump administration’s ‘plan’ for infrastructure, which was laid out in a 6-page white paper and includes $200bn of investment in infrastructure over 10 years. However, political attention has not been paid to this and is being spent on repealing the affordable care act whilst simultaneously cutting budgets. Price said he was an advocate of an infrastructure bank, not too dissimilar from the European Investment Bank that could help in addition to direct public investment. Congressman Price highlighted how wider fiscal concerns were constraining investment and short-sighted budget policies do not significantly reduce the fiscal deficit and in the context of hurricane Harvey, there are ideological differences that need to be overcome in order to get cracking on infrastructure investment.
Next to speak was Carlota Cenalmor from the European Investment bank, who spoke on the history of the bank and how by placing infrastructure investment at its core, it helps other sectors to grow. Cenalmor cited the figures the bank employs, with around $19.7bn invested in infrastructure in 2016. The bank put forward around $21bn, which it has scaled up to over $200bn having attracted private investment.
Thomas McLoughlin from UBS Wealth Management followed Carlota, immediately dispelling any theories that there is a shortage of private capital for infrastructure. McLoughlin described the robust municipal bond market which provides an attractive financing option and access to cheap capital. He highlighted the 4-5 year approval process for projects, which greatly deters private investors. Carlota had previously said that the average approval time for a European project was 1-2 years. Projects have been cleared in this time in the US, but only in exceptional circumstances, which McLoughlin said was frustrating, since it can clearly be done faster. Misallocations of federal money are another issue, with the country’s main airports only receiving 30% of the overall investment. Finding a way of leveraging the private capital is the issue, McLoughlin concluded.
The final panellist was Mr Michael Whalen of the US Department for Transportation’s Build America Bureau. He spoke on the importance of encouraging Private Public Partnership.
The audience participated in asking a number of questions in the Nelson Mandela Auditorium, with one TAM graduate asking the panellists about the role of renewables. Congressman Price responded favourably, arguing that we ought to give renewables the same tax treatment as pipelines, which was met with applause. He continued that it is an area that should receive the same amount of research and if we can prove their viability then we will continue to see a shifting in energy dependence.