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USDOT Proposes Regulatory Tweak Intended to Boost Transit P3 Deals

The U.S. Department of Transportation headquarters in Washington, D.C.

The U.S. Department of Transportation headquarters in Washington, D.C. Shutterstock


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But not everyone is convinced the Transportation Department’s plan will spark a dramatic increase in the amount of private dollars flowing toward transit projects.

WASHINGTON — With the Trump administration pushing to relax regulations and to spur private investment in public works, the U.S. Department of Transportation on Monday released a proposal meant to help clear the way for greater private sector involvement in transit projects.

The proposed rule-making would allow recipients of federal funding for public transportation projects to request that Federal Transit Administration requirements be waived or modified—if the recipient can show that the requirements discourage private sector participation in a project.

Funding recipients, such as state agencies and local governments, would also be able to make these sorts of requests if they can demonstrate that changing FTA guidelines would encourage public-private partnerships or private sector investment, or in situations where the amount of private sector involvement or “risk transfer” on a project reaches certain thresholds.

“As more public transportation project sponsors find willing and able private partners, we must ensure that federal regulations or procedures do not stifle innovation,” Federal Transit Administration Executive Director Matthew Welbes said in a statement on Monday.

Transportation Secretary Elaine Chao noted that “one of the Trump Administration’s priorities is to allow private sector resources and expertise to help rebuild America’s infrastructure.”

But there’s skepticism in some quarters about how much the proposed rule can do to expand the use of public-private partnerships, or P3s, in the transit sector.

“It's not as though regulations are the reasons why there aren’t more of these projects,” Kevin DeGood, director of infrastructure policy at the Center for American Progress, a liberal advocacy group, said by phone on Monday.

"It isn't as though these things can't be done," he added, pointing to the Eagle P3 commuter rail project in the Denver metro area an example. "Are there really giant, substantial barriers, or is it the case that P3s just don't work all that well with respect to transit?"

The proposed rule involves what are known as Private Investment Project Procedures for public transportation capital projects.

It comes as the Trump administration is working on a broader infrastructure investment package.

White House officials have indicated that the infrastructure plan is slated to be released later this year and could involve $200 billion of federal spending, with a goal of achieving $1 trillion in investment overall when factoring in private, state and local dollars.

Under the proposal released Monday, the Federal Transit Administration’s administrator would have discretion over whether to grant a funding recipient’s requested modification or waiver.

The newly proposed procedures would apply to FTA regulations, practices, procedures and guidance documents. But the procedures could not be used to bypass requirements under the National Environmental Policy Act or other federal statutes.

The Federal Transit Administration is accepting public comments on the proposal until Sept. 29.

Bill Lucia is a Senior Reporter for Government Executive’s Route Fifty and is based in Washington, D.C.

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