Andrew Curtis Right is Counselor to the U.S. Secretary of Transportation and Executive Director of the Build America Transportation Investment Center. The Build America Transportation Investment Center serves as the single point of contact and coordination for states, municipalities and project sponsors looking to utilize federal transportation expertise, apply for federal transportation credit programs and explore ways to access private capital in public private partnerships.
Prior to joining the U.S. Department of Transportation, Mr. Right was the founder and Managing Partner of Cherry Lane Capital. Prior to founding Cherry Lane, Mr. Right was a Vice President in the Infrastructure Investment Group, within the Merchant Banking Division at Goldman Sachs in New York. At Goldman, he was part of the founding team that formed the Infrastructure Investment Group and raised $6.5bn for Goldman Sachs Infrastructure Partners I (GSIP I), which closed in December in 2006. As part of the IIG team, Mr. Right led teams that evaluated deals in a variety of sectors including midstream and transportation opportunities, ultimately focusing on the seaport and US airports sectors.
Public Private Partnerships Are For Financing, Not Funding
So not every project is suited for a P3. You can look at it in a couple ways. It may increase the financing cost over time, but ideally P3s can shift the risk so that cost overruns flip to the private sponsor…The other way to look at it is in recognition that private investors need a return. The DOT has numerous federal credit programs that are at below market rates, which allow you to offset some of those extra costs if you utilize those federal credit programs.
How Private Capital Can Help Public Projects
If you’re going to build a road today you’ve got to bid out the contract, and someone has to pay for it. And in the past the money has typically come from the Highway Trust Fund, or from the federal government, or from state and local taxes, et cetera. Going forward, the issue is a P3 really involves a different layer of procuring and risk sharing, and effectively of financing, where the state or the municipality or the sponsor doesn’t have to pay up front as part of a contract…
What’s Keeping Us From Using More P3s?
I think the biggest obstacle is a lack of comfort with P3s and the increased risk public sponsors perceive with P3s…As people do one P3 and get comfortable with it they’ll do another, and another, and some P3s take 5 years to even complete. So you really are looking at a multi-decade sort of transition before you start to see P3s, in my mind, becoming really actively used in all the states.
BATIC: Making Innovative Financing Mainstream
The Build America Transportation Investment Center serves as a single point of contact and coordination for states, municipalities, and project sponsors looking to utilize federal transportation expertise, apply for federal transportation credit programs and explore ways to access private capital in public private partnerships.