Transportation Policy Academy 2013 – DC – Part 5: Drew Preston, U.S. Chamber of Commerce

Day two of the CSG Transportation Policy Academy in Washington, DC included a transportation policy roundtable featuring a variety of transportation stakeholders and experts. Among them was Drew Preston, Manager of Congressional and Public Affairs at the U.S. Chamber of Commerce. He spoke about the importance of private investment in the future of transportation, the Chamber’s efforts to recruit infrastructure champions in the business community and how state officials and the Chamber can work together in support of state and federal transportation investment.

“I think another challenge and opportunity when I think of business investment and transportation is tapping into the increasing amount of capital that is out there,” Preston told state legislators attending the policy academy. “There is an ever increasing amount of cash from private companies looking to park money in American infrastructure. More and more of my time is being spent with these groups coming to us from all over the world. They look at the needs that ASCE so clearly lays out that the country needs. They look at what’s going on here in Washington and the sort of ineptitude of the federal government and unwillingness to put money into things that they actually really should be putting money into and that generate a return, mind you, on that money and they just see a great opportunity. We certainly see that as well in terms of safe, reliable, long-term investments. It’s challenging because it’s complicated how private money plays in public infrastructure. There’s a major public perception shift that needs to take place. Change is very hard for a lot of people. This is a scenario where the United States is oddly backwards with the rest of the world. Here we are sort of the poster child of the free market, of capitalism and that works very well in many other facets of our economy. You want better high-speed internet? You pay for that. If you want better goods and services, you usually pay for that. Infrastructure is somewhat the reverse. … The rest of the world pays much more per user than we do. This is an area where we’re oddly sort of socialist in a way where we’ve relied for decades on the federal government to pay for a lot of these systems and now we’re sort of only beginning to wake up to have a sort of shift in thinking about maybe the private sector can and should play a larger role here.”

“I had a lunch recently with the head of China’s sovereign wealth fund--$500 billion they’re sitting on. They would love to spend that money over here in our infrastructure. They just aren’t sure how to do that. There are a lot of countries out there who on some level have written off the U.S. entirely. It’s just too complicated. Your tax structure, your regulatory environment is not conducive to me coming over there. Or they assume they’re going to go invest in the United States—the country as a whole—and they only realize when they come over and start talking to folks it’s actually a tapestry of 50 different state governments, 500 localities that they have to interact with, local politics. Oftentimes these deals are years and millions of dollars in the making. Companies spend a lot of resources and when they go belly up at the last moment because some local politics come into play, they aren’t likely to come back, certainly not for a while. They’ll go elsewhere to put that money in place.”

“So there’s a big challenge for us. One, getting our businesses to really champion this issue, recruit new voices to the debate. But also figuring out how to tap into this additional money. We have to be very careful of course because if you start talking too loudly and convincingly about the role of private capital and the benefits of public-private partnerships, things like that, there are actually plenty of folks here at the moment who will interpret that as “great, now the government can get out of paying for this stuff and that’s just not how that works. It’s certainly not a replacement for funding but it can be a very powerful tool to complement and leverage some of those dollars, make them go farther.”

“The Chamber is involved in a few efforts to really help in this. One is we’re updating our Transportation Performance Index. The 2013 update we were hoping to have out last month but Congress decided to move a (water resources) bill so we thought that was more important. … This is a complementary report to ASCE’s Report Card and a way of measuring what matters most to businesses now and into the future. It really looks at three primary components: supply of infrastructure—do you have what’s needed right now in place. And it’s not just about freight. Forty percent of the economy is service-based. And it’s transit too. A major decision for a lot of employers is getting their employees to and from work. … Supply, utilization, capacity for future growth. … Caterpillar moved a facility down in Georgia. A big deciding factor in that was the expansion of the Port of Savannah. So it’s a big decision for companies. … Quality of service is the last one. That’s a little harder to measure and something we haven’t been doing a great job of or a lot of but is it predictable, safe. We pump those into a complex algorithm and it spits out our index at the national level.”

“We’re also trying to get out our Infrastructure Blueprint for Economic Growth. … It really is a way to go out and recruit those new champions in the business community outside of the traditional stakeholders. So we’re going around the country conversing with 30 or more CEOs of all industries and really getting them to sort of think about transportation and how it impacts their company in different ways and also sort of slyly recruiting them as new champions in the process.”

“We’re going a level deeper, doing in-depth interviews with a much larger group of more operational experts, logistics, supply chain folks to really get a better idea of where are those soft spots or bottlenecks in the system. But coupled with a very broad National Voter Survey to get a better understanding and snapshot of current public perception toward some of these systems. And also doing an exhaustive meta-analysis of (200) existing reports and studies.”

“Members of Congress want big companies to sort of do their job for them, to essentially stand up publically and say ‘transportation is important and we need to invest in it and here’s why’ and really also provide them some of that political cover back home. That’s a lot of what the Chamber does as well. We have not only 50 state Chambers of Commerce but 3,000 or more local Chambers all over the country and I spend a lot of my time outside of D.C.—in fact almost more than I do in D.C.—helping folks back home, helping educate local constituencies and really providing folks that cover if they’re going to take a potentially hard vote with us up here in D.C.”

“The last thing we’re working on and it’s really much more in its infancy but it’s a brand new initiative to really take a closer look at the private investment in public infrastructure piece. I mentioned the complexities of that. It’s really difficult to sort of get our arms around because so many businesses and industries have different wants and needs for something like that and the Chamber represents the vast majority of them so certainly folks like investment funds and banks that are going to look to part cash have different wants and expectations to the design-build firms, to local communities. I think initially there’s a huge amount of public education that needs to go into this. Fortunately, we have a lot of examples to look to, successful examples particularly around the rest of the world. The rest of the (developed) world has been doing this much longer than we have.”

“So much of what you guys are doing at the state and local level is helpful to me up here to be able to take that back and say ‘look what these states are doing. Federal government, you can do it to’ and give them the sort of courage they need that this can be done.”

“I think where we can certainly be helpful is sharing that information with you all as we continue to sort of pull this together and roll these projects out because a lot of it we’ve been combing across the country so helping you engage your businesses better back home, working with your state and local chambers. If those groups are not where you want them to be around the table, definitely let me know because we can certainly help in that and help get your local business communities behind you and whatever projects you’re trying to accomplish and also help us by bringing your stories to Washington like you’re doing right now. That’s so very important as we head into reauthorization of MAP-21. … We do a really good job about touting the benefits of some of this stuff beforehand. … We haven’t done as good of a job of coming back after the fact and saying ‘look, here’s what it did. We told you it was going to do X and look what happened.’ So it’s very important between now and next year—and this is an ideal group to really help in this—is making sure your federal representatives hear about all the positives that MAP-21 has brought to your state. How has it reduced your costs? How has it helped job growth, helped economic growth? Because if we get a year down the road a year from now and we don’t have that evidence, we don’t have those stories, it’s going to be very hard to convince Congress to give us more money. As you are well aware, they are really trying to get out of the business of paying for everything. So we need that help in terms of (people saying) here’s what the bill did for us and the benefits brought to our state.”

“I’m more optimistic than I have been in certainly a year or more about transportation at the moment. With the water bill, it was as if a collective light bulb finally went off in the collective dim brain of the federal government and we were all reading from the same hymnal for a brief period of time. Not only who was talking about it but what they were saying, finally sort of waking up that this is a real issue that we’ve been neglecting for some time and it needs our attention.”                

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