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Women In Infrastructure - New York, New York




March 13, 2008
New York, New York
On behalf of President Bush and Transportation Secretary Mary Peters, I’m delighted to be here tonight to address such an important topic.

In his popular book, The Tipping Point, Malcolm Gladwell identifies the point at which “the momentum for change becomes unstoppable.” And he identifies some of the change agents involved in this process as mavens – that is, people we rely upon to connect us with new information, accumulate knowledge about the marketplace, and share it with others.

I strongly suspect that many of the women here tonight are these mavens. . . and the transportation industry has indeed reached the kind of tipping point that Gladwell describes.

Demand on our public transportation infrastructure has never been greater: Many highways are congested to the point of
gridlock. . . And transit ridership in many regions has reached record highs. . . .

Yet securing the resources to keep this infrastructure in a state of good repair, and grow it further, is enormously challenging. . . .

The DOT calculates that we need roughly 22 billion dollars a year to improve the condition and performance of existing transit systems through 2024. That level is 70 percent higher than all transit capital spending in 2004.

Meanwhile, the price of commodities used to build roads, bridges, highways, transit systems, and so on has risen much faster than inflation over the last 4 years:

Between December 2003 and August 2007, the price of steel mill products rose about 160%. . .copper and brass, 270%. . .and aluminum and concrete, 125%. . . .

By the end of 2008, construction input costs are projected to rise 6-to-8 percent annually.

As you well know, the dramatic change in material prices in recent years, and the possibility of labor or material shortages, make it very difficult for bidders to develop reliable price estimates for their work. . .  This makes big, complex projects especially prone to price and performance risks.

On top of all this, our traditional sources for funding transportation projects are under stress:

The Highway Trust Fund – the federal cash cow for transportation funding –  is projected to run a deficit of 3 billion dollars by 2009. . . and the mass transit portion of the account will have a negative balance by 2012 if no action is taken.

The impact of all this could well play out in New York over
time. . .The FTA and local authorities are investing billions in game-changing public rail projects here, including the new Second Avenue Subway; the East Side Access connection to Long Island; and the Access to the Region’s Core project, between New Jersey and Manhattan. . . 

Maintaining all this new transit capacity in a state of good repair is likely to be enormously challenging, and will require sustainable, long-term funding mechanisms.

As you well know, one of these potential mechanisms – tolling – is currently a hot topic in New York.

The funding question is near and dear to me. . . As some of you may know, before joining FTA I served on the Senate Banking

Committee staff, where I authored the transit provisions of SAFETEA, including a Public-Private Partnership Pilot Program.

Public-private partnerships are an important emerging tool for the transit industry, as a means of leveraging alternative funds for complex transit projects.

To aid in this, SAFETEA provides an additional $15 billion in authority to issue private activity bonds – issued by private sector, proceeds used for public purposes.

We’re pleased with the promise shown by these partnerships. Since 2000, 11 FTA capital transit investment projects have entailed public-private partnerships, worth more than $10 billion.

And acceptance of PPPs growing rapidly. According to Ernst & Young, public-private partnerships are here to stay and may well be the only viable way for governments to reach their infrastructure development goals.

Moreover, testimony at Senate Banking Committee hearing this week on nation’s infrastructure cited Goldman Sachs, stating that:

“Closing the infrastructure deficit will require tapping all available sources of capital: tax-exempt debt, federal government funding tools, and private sector funds.”

One promising example of a public-private partnership in the transit industry involves the Bay Area Rapid Transit (BART) in San Francisco. This project seeks to extend rail service from the city to Oakland Airport. BART is negotiating with Merrill Lynch on creative ways to close a financing gap for this project. This is precisely what PPPs should help to accomplish.

Let me say in closing, that  if all the “mavens” here tonight put their heads together, surely y’all can come up with some answers to our transportation and infrastructure challenges. . . .

I leave you with this provocative idea from Clare Booth Luce, who once served as a Congresswoman from Connecticut: 

“They say women talk too much. If you have worked in Congress you know that the filibuster was invented by men.”

Thank you.

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