French-American Workshop on Public Transportation - Lyon, France
Remarks for Sherry Little, Deputy Administrator, Federal Transit Administration, U.S. Department of Transportation
July 7, 2008
On behalf of President Bush and the U.S. Department of Transportation, I am delighted to join you this morning to discuss one of the most pressing issues of our time: developing, financing, and maintaining a world-class, multi-modal public transportation infrastructure that allows us to move people and goods safely, efficiently, and affordably.
The Federal Transit Administration is proud to co-sponsor this timely and important event with the French Ministry of Ecology, Energy, Sustainable Development and Urban Planning.
I am pleased to welcome two members of the United States Congress who care deeply about the future of transportation -- Representative John Mica of Florida and Representative Loretta Sanchez of California.
I also wish to extend a warm welcome to all workshop participants -- the distinguished government and business leaders, transit advocates, and university faculty members from France and the United States.
I expect we will all benefit greatly from your experience, wisdom, and expertise.
I understand that Lyon is referred to as France’s second city, but from everything I’ve seen, I think it’s No. 1...from the spectacular Opera House to the two gorgeous rivers...Lyon is tres belle!
I’ve also noticed that this region is brimming with transportation history...The Romans built roads here...The first locomotives brought to France in 1828 came here, to the Lyon-St. Etienne Railway...And now there’s Metro, light rail, and cable cars.
A railway group described Lyon as having “an abnormally wide mix of public transport modes.”
I hope that was intended as a compliment.
Seriously...along with energy and agriculture, transportation has clearly emerged as one of the critical macro-economic challenges of our time – one that affects developed and developing nations alike, around the world.
Indeed, the surface transportation systems that have helped to bring prosperity and mobility to Europe and North America over the last 150 years, have inspired remarkably rapid spurts of similar development around the world -- from Singapore and Beijing, to New Delhi and Buenos Aires.
Fast-growing rail and bus systems have sprung up quickly in such places -- bringing renewed vibrancy to tourism and trade, and new mobility and freedom to local residents.
But whether we’re considering nations like China and India, racing to build brand new transportation infrastructure from the ground-up...or France and the United States, which are seeking to renew investments in transportation for the future...profound challenges confront us all...
As you well know, petrol has become nearly as precious as gold throughout the U.K. and Continental Europe.
Europeans already drive less, and drive more fuel-efficient vehicles, than almost anyone...
Yet patience has worn thin here in France, and elsewhere, as rising fuel prices drive up the cost of food and other necessities.
As one energy analyst recently stated, “Energy consumption is becoming part of everyday thinking.”
In the United States, we are just beginning to experience this level of frustration. More and more people in our car-dependent society are turning to public transportation as an alternative...
The signs are everywhere -- it’s quite striking. In March alone, driving in the U.S. declined by roughly 4 percent -- the steepest drop since World War II. . . Public transit ridership has risen to a 50-year high...And sales of hybrid automobiles surged 25 percent in the first quarter of this year.
Meanwhile, we’re looking for practical ways to bring more affordable transit options to rural communities, senior citizens, and low-income families -- populations hit hard by high fuel costs...
And even though people are driving less in some areas, we continue to battle traffic congestion and its adverse effects on the environment in our densely populated urban corridors.
I believe we can draw two important conclusions from these trends:
First, public transportation is arguably more important now to the economic welfare of great nations than at any time during the last century – perhaps since the invention of the internal combustion engine.
And second, financing our growing need for a robust public transportation infrastructure will require new levels of social and political cooperation and innovation between the public and private sectors.
The financing question is of course at the heart of our meeting here this week.
As you know, there’s a lively public debate under way across Europe and the U.S. over what to do about fuel taxes.
Should we raise them in order to capture additional revenue for critical transportation projects?...
Or lower them to provide relief to consumers?
In the U.S., we encourage energy conservation policies – such as driving less...driving more fuel-efficient cars...and reducing congestion, which wastes fuel...
These efforts will inevitably drive fuel consumption—and fuel tax revenues—down. So we have concluded that it doesn’t make much sense to count on fuel taxes as the primary source of transportation funding for the future.
Yet our Highway Trust Fund Account relies largely on fuel taxes generated by the driving public and commercial truckers. This account is the principal federal mechanism for funding roadway and transit projects in the U.S. The account faces more than a $3 billion deficit next year, due, in part, to the fact that drivers are scaling back on gasoline consumption.
This is an unfortunate circumstance, because our nation absolutely must continue to invest – and to re-invest – in its vast transportation infrastructure...
We’ve got to bring our roads, bridges, tunnels, and transit systems into a state of good repair – and keep them that way...And we must have resources to build new, efficient transportation systems to keep Americans moving.
In short, we must find new ways to finance our transportation infrastructure.
The U.S. Department of Transportation calculates that we need roughly 22 billion dollars a year, on average, from all sources, to improve the condition and operation of our nation’s transit systems through 2024...
That level is 70 percent higher than all transit capital spending in 2004—the last year for which we have figures.
This spending gap is likely to widen, as the cost of construction materials in high demand around the world -- such as aluminum, concrete, and copper -- continue to escalate.
The upshot is that the cost of building complex, multi-year, capitally intensive public transportation projects will continue to rise, not just in the United States, but throughout North and South America, Europe, and Asia. . . .
This puts intense pressure on national, regional, and local governments and private contractors to manage contingencies and monitor long-term financial risks very carefully.
This workshop offers a much needed opportunity to examine solutions to these challenges.
As the French say, Quand on veut, on peu. Where there’s a will, there’s a way.
France has shown impressive leadership in implementing public-private partnerships on a range of public works projects -- from highways, tunnels, and viaducts to high-speed rail.
In fact, it is hard to imagine how France’s plans to build three new high-speed rail lines concurrently – linking Paris to Bordeaux, Rennes, and Charles de Gaulle Airport – could be accomplished without leveraging private sector resources. Together, these projects will cost more than 10 billion euros.
In at least one of these projects, private contractors will design, build, maintain, and finance the system without taking a centime of public funds. And in each case, the long-term risks are largely to be borne by private operators, while the public sector will enjoy access fee revenues.
Public-private partnerships are, without question, the wave of the future -- here in France, in the U.S., and anywhere that large, complex, multi-year public works projects are contemplated.
In the U.S., we’re compiling an impressive track record of our own. In fact, most people haven’t yet fully grasped the unprecedented innovation taking place in transportation today.
Our states have been leading a quiet revolution in transportation financing and the way we build, maintain, and operate our infrastructure...
Instead of raising taxes or waiting for the federal ship to bring boatloads of new funding, innovative governors are finding willing partners in the private sector.
Several transit projects have been constructed without any federal dollars. In Southern New Jersey, for example, a 33-mile light rail line was successfully constructed using a public-private, fast-track, design-build approach. Annual operating and maintenance costs run 50 percent less per mile than comparable light rail projects. New Jersey owns the project -- but it was the private sector that guaranteed to deliver service at a fixed cost for 10 years.
Back home, we call that a win-win.
And we’re eager to see more of the same.
These partnerships are good for America, because they unleash the power and resources of the private sector...reduce the level of risk carried by the public sector...and lead to more projects getting built faster, more efficiently, more creatively, and with the customer in mind.
With these benefits in mind, the Federal Transit Administration is actively promoting public-private partnerships where we have a direct financial stake.
A few years ago, I was personally involved in writing legislation encouraging the use of public-private partnerships for transit projects receiving federal funds through our grants program for capital transit projects.
As a result, we have pilot transit projects under way in three cities, to help us determine whether public-private partnerships actually reduce risks...and better allocate the risks associated with new construction...compared to conventional procurements.
This marks an important strategic turning point for us...
While our government remains committed to investing in public transportation, we simply cannot go it alone.
We must demonstrate to Congress, and to our taxpayers, that public-private partnerships carry their dollars much farther, and more efficiently, than public investments alone.
We’re co-sponsoring a number of workshops on public-private partnerships in different American cities this year...bringing together major public and private sector participants to exchange good ideas...But I must say that France is one of the most appropriate places of all, to address this topic.
When Deputy Secretary John Negroponte of the U.S. State Department visited France last year, he noted that Benjamin Franklin’s career as a diplomat here more than 200 years ago taught us that France and America are instinctively sympathetic to one another -- each full of admiration for the other’s strength and vitality.
I think it’s fair to say that we share more than mutual sympathy -- we also share in an historic public-private partnership. The Statue of Liberty, which has stood in New York Harbor for 122 years, is one of the greatest gifts ever offered by one nation to another.
To pay for the statue, the French levied public fees and ran a lottery. The U.S. held theatrical benefits, auctions, and prize fights.
It wasn’t easy, but our citizens came through, and our governments saw to it that the statute became a reality.
That, in essence, is what public-private partnerships are all about -- bringing citizens, businesses, and governments together to work toward a common good that promises to improve the quality of life for our children, and our grandchildren.
Let me conclude with an observation by the French historian Alexis de Tocqueville, who spent a great deal of time traveling across America.
He said, “The real voyage of discovery consists not in seeking new landscapes, but in having new eyes.”
I am confident that at the conclusion of this workshop, all of you here today will have “new eyes” to envision the future of public transportation -- and the knowledge to get us there.