US 'Infrastructure bank' back on the table
New infrastructure bank proposals envisage it offering loans rather than grants. Credit: Sheila Ellen
The long talked about “Infrastructure Bank” is back in discussion-mode, albeit with a much different visage than originally proposed during the campaign season three years ago.
Any actions that will bring the private sector into the transport funding business, are good things; the government set over-arching goals, but let the private sector figure out how to get them done.
In the latest iteration, a proposal with support from Republicans and Democrats (including 2004 Presidential nominee John Kerry), the bank would be seeded with $10bn. Importantly, it would be operated outside of the Department of Transportation (where Obama’s most recent version would have had the bank).
Unlike various political programs, the new version of the bank would make loans rather than provide grants. The bank, as contemplated, will fund “public works” projects impacting many transport modes (not exclusively maritime), but port people should see capital where their facilities interface with roads and rails.
In banking, co-lending, where multiple institutions get together on credits, is not uncommon; it’s easy to envision a situation where a Federal Bank gets together with state institutions - for example in California (which has such an institution) or Maryland (where such an effort is moving ahead).
By necessity, all aspects of the fragmented maritime business have been adept at figuring out partnerships, joint ventures, alliances, whatever you’d like to call them. The port sector is no exception.
Creative bankers always manage to develop structures that allocate risks and rewards. Maritime ports always interface with “something else” (which might be a road, a railway, or a commercial shipping business), so the ability to apply such “co-lending” smarts to port finance is critical.
It is important to balance the Federal notion of “projects with national significance” - which even a private institution would be looking at - with a more local regional viewpoint - those aforementioned roads and rails: for example, an abandoned or underused short line railroad that could move containers.
I hope that the Kerry proposal moves forward, with a caveat that public-type disclosures will be required to keep the bankers honest. Dedicated business people, using a similar type of creativity, will be able to scheme up ways to attract traffic - if the ideas make sense, the money will flow.
Images for this article - click to enlarge
Unless otherwise stated, all images copyright © Mercator Media 2012. This does not exclude the owner's assertion of copyright over the material.
