Since the President signed the Water Resources Reform and Development Act (WRRDA) on June 10, 2014, the landmark and long-awaited legislation has reverberated through waterways from coast to coast, igniting many port projects, and streamlining the process for studying, authorizing and completing projects.
We see the fruits of WRRDA all over this issue with stories about many of the projects authorized by the legislation.
Any day Congress should receive a report from the Secretary of the Army, Proposals for Authorization Annual Report, as instructed by Section 7001 of WRRDA 2014. The report will identify projects with completed feasibility studies, ready for Congressional authorization; proposed feasibility studies; and proposed modifications to authorized projects or studies.
The legislation, as a whole, was written with a renewed interest in non-federal partners and public-private partnerships. The report is in part based on annual requests for proposals from non-federal interests for work on federal projects. WRRDA 2014 outlines new framework, or an invigorated interest, for the private sector to have a larger part in federal waterway projects, and the Corps will annually report on proposals from non-federal partners.
WRRDA instructs that the Secretary submit the annual report to the Senate Committee on Environment and Public Works and the House Committee on Transportation and Infrastructure. Even before the passage of WRRDA, T&I Committee Chairman Bill Shuster worked to create the Panel on Public-Private Partnerships in January 2014 to make recommendations for developing public-private partnerships (P3s) to finance the country’s infrastructure.
The panel considered current P3 examples to identify the role they already play in infrastructure projects; whether P3s enhance the management of infrastructure projects beyond the capability of government agencies or the private sector acting alone; and how to balance the needs of public and private interests when developing projects together.
While P3s may seem like the solution to the Corps’ overworked budget, the panel’s findings clearly highlighted a consistent theme among P3s, which is they are not a source of funding, “and should not be thought of as the solution to overall infrastructure funding challenges,” according to the panel report, published in September 2014.
Only under the right conditions, P3s can accelerate project delivery, leveraging private sector resources and expertise and mitigating risk for the private sector.
According to the report, “there is no free lunch,” and “the cost of infrastructure projects is borne by the public.”
However, the competitive market has a way of producing efficiencies, and the panel also examined ways to harness that.
Specifically, the report recognized that “public port authorities have a long and successful track record working with the public sector.”
While ports have long granted concessions to private operators to build and operate container terminals under long-term lease contracts, most private operators tend to resist investment in common user facilities and new terminal projects. Ports also don’t want to lose operations control and influence over future development.
“Despite these concerns,” the report said, “the need to consider alternative financing mechanisms is great given the needs of the infrastructure.” Sounds like a rock and hard place.