Black clouds on the funding horizon
Infrastructure spending is down but not out
With the Holidays approaching, air travel delays (rather than port issues) are occupying most transport watchers.
With the Holidays approaching, air travel delays (rather than port issues) are occupying most transport watchers. Nevertheless, after the early November elections, those who are looking at transport issues are now evaluating the impact of the Republican advances against Obama’s party- the Democrats. A sign of the times can be seen in the New York area, where the Governor of New Jersey (just across the Hudson River) has now cancelled an multi-$Billion mass transit tunnel project already way over its allotted budget.
For ports hoping to benefit from continued infrastructure spending, the news is not good. As an example of how things might evolve, Republican John Mica, who will replace Congressman James Oberstar on the all-important House subcommittee dealing with transport matters, has already called for a revisiting of the TIGER program (which awarded $1.5 billion for various infrastructure projects). A number of ports were set to benefit from TIGER grants; Mica says that some TIGER money could be called back.
One clear tendency under the business-leaning Republicans will be an emphasis on the role of the private sector, so look for a resurgence of the phrase Public Private Partnership (PPP), and “rates of return” in any transport discussions. One additional uncertainty concerns Washington, D.C.’s posture towards environmental incentives- which can assist greatly in improving the economics of projects that otherwise would not meet private investors’ hurdle rates. Certainly, a broad “Cap & Trade” plan, which was never really a starter, will not happen in the next few years. My hope is that incentives for alternative energy schemes will continue; at least one plan for coastal feeder ships involves the use of compressed natural gas propulsion (a vast improvement over the existing U.S. coastal
fleet- some of which is steam powered). In a holistic approach to transport planning, the maritime mode has an important role to play- like getting trucks off dangerously overcrowded motorways. In a tribute to outgoing Congressman Obsterstar, Geraldine Knatz- Executive Director at the Port of Los Angeles, wrote: “We talked about how this vision must be mode-neutral and driven by making our whole system more competitive.” As the players switch chairs on Capitol Hill, hopefully the new group will earn a similar respect.
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