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NCPPP Exclusive: A Conversation with BATIC Executive Director Andrew Right

NCPPP regularly features exclusive conversations with leaders in the public-private partnership community. To participate, contact Barbara Bryant at bbryant@ncppp.org or (202) 962-0555.

The Build America Transportation Investment Center (BATIC) is part of President Obama’s plan to increase infrastructure investment and stimulate economic growth. The U.S. Department of Transportation launched the center in July 2014 to give state and local governments more access to information about transportation funding and financing. The center also helps parties that wish to conduct public-private partnerships ensure that project design and financing elements comply with permitting requirements.

NCPPP recently sat down with Andrew Right, counselor to Transportation Secretary Anthony Foxx and executive director of BATIC, to discuss the resources and expertise the center provides.

NCPPP: Could you tell us a little about your background in transportation?

Right: While I have had a long-standing interest in transportation, and pursed my engineering degree in Civil Engineering and Operations Research, my professional experience with transportation began when we launched Goldman Sachs Infrastructure Partners (GSIP) at Goldman Sachs in 2006. As part of that effort, I was responsible for investments in global seaports and Americas airport sectors covering a variety of closed and pursued investment opportunities. In addition, I sat on the board of Carrix/SSA Marine which was one of GSIP’s portfolio companies.

My involvement in transportation continued after leaving Goldman when I founded Cherry Lane Capital. In 2014, Cherry Lane partnered with Corsair Capital to create Corsair Infrastructure Management (CIM). CIM became a subadvisor for Citibank’s $3 billion infrastructure fund in March 2015, effectively taking over management of the fund’s portfolio of assets, including DP World Australia, one of the largest container port operators in Australia, Itinere, a network of toll roads in Spain, and Vantage, an airport developer and operator (which recently led the consortium that won the LaGuardia Airport redevelopment). I served as a member of the Investment Committee and a co-head of CIM until joining USDOT.

NCPPP: What transportation infrastructure needs is BATIC designed to address?

Right: 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.

BATIC addresses the procedural, permitting and financial barriers to increased infrastructure investment and development by:

  • Intervening earlier in project lifecycles;
  • Actively helping sponsors navigate and accelerate the often complex federal permitting and procedural requirements;
  • Centralizing project coordination; and
  • Cultivating public-private partnerships.

BATIC drives efficiencies and creates further financing optionality for projects in a shorter time frame, helping to accelerate the repair and development of critical U.S. transportation infrastructure.

NCPPP: Can both states and companies seek BATIC’s support and, if so, what types of assistance can they request?

Right: BATIC will work with states, municipalities and private project sponsors and provide them access to federal transportation expertise, help them apply for federal transportation credit programs and explore ways to access private capital in public private partnerships.

NCPPP: Secretary Foxx said recently that the center “has supported $18 billion in infrastructure investment in just the past year.” Could you describe what projects or other efforts this funding supported and how it was delivered?

Right: Part of BATIC’s focus is on making USDOT credit programs, such as the TIFIA [Transportation Infrastructure Finance and Innovation Act] and RRIF [Railroad Rehabilitation & Improvement Financing] programs and PABs [Private Activity Bonds] more accessible, and thus increasing overall investment in infrastructure. Since last July, USDOT has provided approximately $7 billion in federal credit assistance to 12 projects, supporting a total of $18 billion in overall infrastructure investment. This includes $5 billion in TIFIA credit assistance to eight projects, of which $3.3 billion went to transit projects, supporting more than $16.1 billion in total investment; $970 million in RRIF credit assistance to two projects, supporting their full project cost and; $1.3 billion in PABs to four projects, two of which are also benefitting from TIFIA.

Six of the projects that achieved financial close with support from USDOT during this period were P3s. These include the I-4 Ultimate Project in Florida, a $2.9 billion roadway through Orlando that recently broke ground. The project is benefitting from a $950 million TIFIA loan, the largest ever for a P3 project. Another example is the Pennsylvania Rapid Bridge Replacement Project, which will replace 558 small bridges within 36 months under a single, innovative P3, is benefitting from $721 million in PABs issued March 18, 2015, using authority allocated by USDOT. This project is also benefitting from targeted flexibility spearheaded by BATIC that helps the private partner to play a greater role in complying with streamlined environmental review requirements.

NCPPP: What would you like to see BATIC accomplish over the next year and a half? Do you have specific goals or milestones?

Right: BATIC is focused on expanding the use of federal transportation credit programs, innovating new approaches to project development processes and funding challenges, and delivering streamlined technical and financial assistance to accelerate project delivery. As such, our first goal is to get the center properly “stood up” and staffed, bringing all of the resources of USDOT to bear. Secondly, BATIC should tangibly improve project outcomes in three areas: access to federal credit programs, navigation of environmental and permitting processes and utilization of P3 procurement methods.

NCPPP: Is BATIC positioned to support transportation public-private partnerships? If so, in what ways? What’s the best way for participants in these partnerships to approach BATIC and what type of assistance can they expect?

Right: As previously mentioned, one of the main goals of BATIC is to cultivate public-private partnerships. We hope to provide project sponsors with the tools to evaluate whether a P3 structure is appropriate and work with sponsors to structure their projects in ways that make them more attractive to private capital.

It is best for each project to come to BATIC early, so that we can help shape the project from the ground up, making it an attractive candidate for a P3 when possible. While sponsors can contact BATIC directly, BATIC also closely works with the credit program teams and modal administrations to ensure that appropriate projects are on BATIC’s radar.

NCPPP: Has the center identified any P3s that it views as being particularly successful and, if so, what makes them stand out?

Right: The Pennsylvania Rapid Bridge Replacement Project is a great example. This project will replace 558 small bridges within 36 months under a single, innovative P3 that bundles the projects to facilitate private investment, and will achieve significant efficiencies that save both time and money. The project will cost about $899 million, with the low-cost financing in the form of PABs accounting for a majority of the project debt. USDOT provided for a PAB allocation of up to $1.2 billion, and $721 million in bonds were issued March 18, 2015. We believe that there is a substantial project cost savings on a per-bridge basis, and, in addition to financing support, USDOT, via BATIC, provided targeted flexibility with respect to National Environmental Policy Act (NEPA) implementation that enabled a more streamlined and accelerated process. The concession was signed in January 2015, and the project recently broke ground.

NCPPP: Secretary Foxx has said that “BATIC would be laying out best practices for use by both the public and private sectors.” From what sources is the center seeking these practices and what are its criteria for selecting them?

Right: Since the launch of BATIC, USDOT has developed extensive guides and other resources for project sponsors and private sector investors. For example, in the past year, the department released a draft guide and addendum to model contract provisions for toll concessions, which serves as a resource for state and local governments to reference as they work with the private sector in advancing critical highway investments. A similar draft guide, focused on model contract provisions for availability payments, will be released this fall. These guides and best practices are being developed in conjunction with, and with input from, sponsors, investors and advisors including many project sponsors who have completed successful P3s.

NCPPP: Secretary Foxx also has mentioned that BATIC would be working with several state DOTs through the American Association of State Highway Transportation Officials (AASHTO) on a practices-related initiative. Have the states been identified and what is the nature of this project?

Right: BATIC is working with AASHTO to finalize a collaborative agreement, with the aim of improving the public sector’s ability to utilize new and existing tools and resources for infrastructure finance.

NCPPP: What advice do you have for both government agencies and private firms that would like to work with and benefit from the center? How can they best prepare to do so?

Right: BATIC will work to deliver results for transportation infrastructure projects as they move from concept to closing and construction. Projects will receive hands on support and will benefit from having a single point of contact at the USDOT. For projects to ensure their own success, they need to engage early with the BATIC team. Through early engagement, projects will have better access to existing credit programs, technical experts and deep institutional knowledge. Projects should also be prepared to consider innovative financing structures, including P3s when appropriate. A better understanding of the P3 alternatives and possibilities can be achieved through such early engagement.

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