Golden Gate BridgeIn a recently published report, Alvarez&Marshall (A&M) proposes a solution for all the infrastructure problems the US face.

The problem can be solved by allocating - or reallocating - Federal funds equivalent to about 1% of Federal income tax revenue $20 billion per year) exclusively for infrastructure. This dedicated Federal revenue would fund a credit reserve to underpin a National Infrastructure Bank (NIB) guarantee program. The program, in turn, would prime the pump for at least $400 billion per year in private sector capital to invest in our failing infrastructure and provide a catalyst for economic recovery for the next decade.

According to A&M public private partnerships are essential to get this goal:

Public-Private Partnerships will have a pivotal role to play in a vibrant infrastructure investment program. The rationale for this statement is that the PPP:

• Is an excellent structure for encouraging private sector investment in public sector projects (and, thus, further leveraging Federal funding);
• Brings private sector investment discipline into the process - both in terms of the selection of appropriate projects and optimizing the capital structure; and
• Results in superior project execution -  experience from other jurisdictions is that well-structured PPP projects are delivered on time and on budget.

Finally, they claim in their report the following about a potential National Infrastructure Bank:

• Administration of the Federal Guarantee Program (including, importantly, the monitoring of the credit reserve on an ongoing basis);
• Acting as the coordination center for projects proposed by all State Governments;
• Providing leadership in project analysis (including the utilization of the latest techniques) - and acting as a liaison with Government Departments for the  accumulation of pertinent data;
• Becoming the repository for best practice in the procurement of infrastructure project PPPs; and
• Acting as a thought leadership center in infrastructure investment.

It is vital that NIB does not become an additional layer of bureaucracy; it should be staffed primarily with private sector personnel and should be outside the political process.