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13-Feb-2018 3:00 PM

US White House releases USD1.5 trillion infrastructure plan

US White House released (12-Feb-2018) a USD1.5 trillion infrastructure plan that calls for USD200 billion in federal funds to help stimulate private and local investment in US infrastructure. The administration's proposal includes the following items specifically targeted to airports, as reported by American Association of Airport Executives (AAAE):

  • Passenger Facility Charge (PFC) streamlining: The White House is calling for extending the PFC streamlining programme from non hub to small hub airports. The administration points out that extending the streamlined PFC process to small hub airports would "reduce delays and unnecessary requirements in the PFC process";
  • Oversight of non aviation development: The administration is proposing to "limit FAA oversight of non-aviation development activities at airports". The White House indicates that agency reviews of non-critical airfield infrastructure such as terminals, access and service roads and hangars can burden the US FAA and slow project delivery;
  • Airport Privatisation Pilot Programme: The administration's plan would make it easier for more airports to participate in the Airport Privatisation Pilot Programme, which the White House says will "reduce barriers to alternative project delivery". Under current law, 10 airports are allowed to participate in the programme, and only one of those airports may be a large hub. The White House is proposing to remove the limitation on the number and size of airports that can participate in the programme;
  • Incentive payments: The White House is also recommending changing the Airport Improvement Programme (AIP) to allow incentive payments for accelerated construction. The latest document suggests that permitting "additional financial incentives, along with profit margin, for contractors would increase work efficiency and reduce project completion times";
  • Post-expenditure audits: The administration is proposing to "move oversight of AIP funds to post-expenditure audits" in order to reduce delays. The White House suggests that post-expenditure audits "would expedite conveyance of funds to sponsors";
  • Infrastructure Incentives Programme: The White House is calling for 50% of requested federal funds - or USD100 billion - to be used to create an "Incentives Program to spur additional dedicated funds from States, localities, and the private sector." The administration indicates that applications "will be evaluated on objective criteria". Eligible projects would require a local match of at least 80%;
  • Rural Infrastructure Programme: The White House plan calls for USD50 billion of the USD200 billion in requested funds to be designated for infrastructure projects in rural US. The latest summary suggests that "the bulk" of funds would go to governors and give states "the flexibility to prioritize their communities' needs";
  • Transformative Projects Programme: The administration is proposing to use USD20 billion for "innovative and transformative infrastructure projects". The White House suggests that this programme "will focus on projects that could have a significant positive impact on States, cities, and localities, but may not attract private sector investment". This programme would require a local match of at least 50% for project planning and 20% for construction;
  • Infrastructure Financing Programmes: The administration's plan includes USD20 billion for infrastructure financing proposals to help "advance complex infrastructure projects":
    • TIFIA: Of the USD20 billion, the White House plan would allocate USD14 billion to expand federal credit programmes like the Transportation Infrastructure Finance and Innovation Act to ports and airports;
    • Private activity bonds: The White House proposal calls for USD6 billion to expand private activity bonds;
  • Disposition of federal real property: The administration's plan would "allow for the disposal of Federal assets to improve the allocation of economic resources in infrastructure investment". The White House suggests that some of these assets "would be better managed by state, local, or private entities". The 53 page document points out that examples of assets for possible divestiture include Washington Ronald Reagan National Airport and Washington Dulles International Airport;
  • Federal capital financing fund: Another USD10 billion would go toward a federal capital revolving fund, which the administration suggests "will reduce inefficient leasing of Federal real property, which would be more cost-effective to purchase". [more - original PR] [more - original PR - II]

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