1. Bridging the Gap Together: A New Model to Modernize U. S
Bridging the Gap Together: A New Model to Modernize U.S. Infrastructure
November 3, 2016

2. Doug Peterson, President & CEO, S&P Global (co-chair)
Executive council on infrastructure
Doug Peterson, President & CEO, S&P Global (co-chair)
Susan Story, President & CEO, American Water (co-chair)
Eric Cantor, Vice Chairman & Managing Director, Moelis & Co.
Patrick Decker, President & CEO, Xylem, Inc.
Mike Ducker, President & CEO, FedEx Freight
Jack Ehnes, Chief Executive Officer, California State Teachers’ Retirement System (CalSTRS)
Jane Garvey, Chairman, Meridiam North America
P. Scott Ozanus, Deputy Chairman and COO, KPMG
Suzanne Shank, Siebert Brandford Shank & Co., LLC

3. Haley Barbour, Former Governor
Political advisory group
Haley Barbour, Former Governor
Steve Bartlett, Former U.S. Representative & Former Mayor
Henry Cisneros, Former HUD Secretary & Former Mayor
Antonio Villaraigosa, Former Mayor

4. Key question
How can the private sector help to address America’s infrastructure needs?

9. Clear statement of public benefits.
New American model for investing in infrastructure
Clear statement of public benefits.
Increased transparency, including full accounting for life-cycle costs.
Public and private sectors share risks, costs, and benefits of infrastructure investment.

10. recommendations

11. Priority actions for the federal government
Process Improvements

12. Inventory all federally-owned infrastructure assets
Priority actions for the federal government
Process Improvements
Inventory all federally-owned infrastructure assets

13. Inventory all federally-owned infrastructure assets
Priority actions for the federal government
Process Improvements
Inventory all federally-owned infrastructure assets
Incentivize consideration of delivery alternatives

14. Inventory all federally-owned infrastructure assets
Priority actions for the federal government
Process Improvements
Inventory all federally-owned infrastructure assets
Incentivize consideration of delivery alternatives
Enforce expedited permitting and review

15. Inventory all federally-owned infrastructure assets
Priority actions for the federal government
Process Improvements
Inventory all federally-owned infrastructure assets
Incentivize consideration of delivery alternatives
Enforce expedited permitting and review
Audit and amend regulatory impediments

16. Priority actions for the federal government
Funding/Financing

17. Provide long-term funding
Priority actions for the federal government
Funding/Financing
Provide long-term funding

18. Provide long-term funding
Priority actions for the federal government
Funding/Financing
Provide long-term funding
Consolidate TIFIA, WIFIA, and RRIF, and adjust scoring

19. Provide long-term funding
Priority actions for the federal government
Funding/Financing
Provide long-term funding
Consolidate TIFIA, WIFIA, and RRIF, and adjust scoring
Authorize new bond programs – BABs, PABs

20. Provide long-term funding
Priority actions for the federal government
Funding/Financing
Provide long-term funding
Consolidate TIFIA, WIFIA, and RRIF, and adjust scoring
Authorize new bond programs – BABs, PABs
Leverage existing investment vehicles – REITs, MLPs

21. Beeck Center on Social Impact and Innovation, Georgetown University
The current project development process in the United States is biased for choosing the lowest cost bid to build a project—not maintain it over its entire service life. Investors prefer the shiny new object to maintaining existing facilities.
Performance-based infrastructure proponents aim to shift the conversation from its typical starting point of lowest estimated construction cost to a new metric—best overall value to taxpayers.

22. Performance-Based INfrastructure
Public procurement: PBI uses public project delivery methods that consolidate responsibility for the key phases of a project’s full life cycle—design, construction, and maintenance—into a performance-based contract with a private partner.
The physical infrastructure assets remain in public ownership throughout the process.
Simplified procurement documents ask bidders to specify their life-cycle performance strategies to meet desired outcomes for the project, rather than simply what it will cost to build it.

23. Performance Based infrastructure
Public sector budgeting and asset management: PBI supports the full implementation of Governmental Accounting Standards Board rule 34, which requires local and state chief financial officers to begin reporting the accrued value of their infrastructure assets in their annual financial reports on an accrual accounting basis rather than on a cash basis where the value of all physical assets is off the books once construction is complete.

24. Performance based infrastructure
Public sector risk management and taxpayer investment protection: PBI emphasizes avoided costs and risk transfer.
Effective project risk management from cradle to grave can create additional public benefits when compared with traditional procurement methods—e.g., shorter design and construction timelines, increased cost and schedule certainty, lower total life cycle costs, and long-term performance guarantees.

25. Performance based infrastructure
Public-private partnerships: PBI procurements can sometimes include private sector financing and/or operational responsibility using a “pay for performance” model—i.e., if the private sector doesn’t deliver as promised, it doesn’t get the payments it expected.
This pay-for-performance approach, enforced by detailed performance contracts, shifts risks typically retained by the public (performance, cost overruns) over to the private sector.

26. Define the problem with regard to water infrastructure
Next Steps
Define the problem with regard to water infrastructure
Can P3s be used in the water sector?
What are the obstacles?
If not P3s, how to address the funding gap without additional federal funds?
How to accurately price water without further economic impacts on low-income ratepayers?

27. Visit our website for more information
Available at infrastructurecouncil.org