The state of America’s infrastructure is…not great. We posted this article on that topic last year, and, to date, not much has changed. However, about a year after the Trump infrastructure plan featured an actual to-do list, it looks like infrastructure is next on the agenda. A few days ago, a draft of the Trump infrastructure plan was released. Let’s take a look at the impact this plan will have on the construction industry.
Draft of Trump Infrastructure Plan Leaked
First off, for those interested, you should take a look at the draft of the plan. At only 6 pages long, it’s more of an outline than a detailed draft. What’s more, there may be more information in the draft that you find interesting other than the topics we identify. The full draft, courtesy of Axios, can be found here.
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Anyway, here are some of the key Principles for Infrastructure Improvements that we found most interesting regarding construction payment…
Flexibility on Interstate Tolls
“Allow states flexibility to toll on interstates and reinvest toll revenues in infrastructure”
This should interest those in the construction industry. When the word “toll” is used, P3 projects often come to mind. While this draft didn’t specifically refer to tolls as they relate to P3 projects, tolls are a very common way to bring private financing into public projects. We know Trump was a fan of P3 projects (until he wasn’t), so it’s fair game to wonder whether this is a sign of state-run P3 approaches to certain stretches of interstate. Also, the above quote would allow for some reinvesting of toll revenues in infrastructure. Infrastructure spending isn’t cheap, and those who perform this work should be glad to hear that another source of public project funding is being considered.
Flexibility on Commercializing Rest Stops
“Provide states flexibility to commercialize interstate rest areas”
Commercializing interstate rest areas would be an obvious way to inject private financing into public works (have we mentioned P3’s?). I don’t know about you, but I remember stopping at rest stops along the interstate on my childhood family vacations. Memories of pulling over to make chicken salad sandwiches alongside of I-10 seem fond now, but if you’ve passed a rest stop lately, you know that they could use some love. Commercialization could be a way to improve these areas while also injecting some private dollars into state infrastructure funds in a new, creative way. Of course, whenever a private improvement is build on public land, the payment security of those performing work can fall into the grey area between public and private projects. Public property cannot be liened, and bonds are not always present on these projects.
Less Federal Requirements When Federal Funding Is Minimal
“Remove application of federal requirements for projects with de minimis Federal share”
When federal funds are used on a project, or when there’s some other federal interest, typically, federal regulations will apply. By imposing fewer federal regulations where the federal government is only minimally involved, the cost of the project would likely drop. However, the question remains: “What would qualify as ‘de minimis?”
Eliminate Constraints On P3 and Public-Public Partnerships For Transportation
“Eliminate constraints on use of public-private partnerships and public-public partnerships in transit”
This one cuts right to the point – the Trump infrastructure plan would make it easier to utilize public-private partnerships for transit projects. But what are public-public partnerships? It’s sort of intuitive – a public-public partnership (also called a “P2P” or a “PPuP”) is a partnership between two separate governing bodies or public authorities to put forward one project. Essentially, they represent a more formalized version of cooperation when multiple public entities are involved in creating an improvement. Often, these types of projects will be utilized in water systems and services, but it looks like the Trump infrastructure plan would move to bring P2Ps to transportation. Such a configuration could make life very interesting for those trying to determine their Miller Act or Little Miller Act rights on a project.
Make Alternative Project Delivery Easier For Airports
“Reduce barriers to alternative project delivery for airports”
We’ve actually written about this topic recently: P3 Projects for Airports.
These are only a few of the ideas put forth in the leaked draft of the Trump infrastructure plan. Plus, it’s only a draft. But regardless of what the final plan looks like, infrastructure will always go hand in hand with the construction industry – so industry members should stay informed. Considering the original Trump plan was slated for $1T (yep, that’d be trillion), it’s safe to say that whatever plan comes to fruition will lead to a lot of construction work.