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Trump's public projects will depend on private billions

Builders are lobbying for more power over projects.

Before you buy the shovels, call the bankers.

President Trump promised to "fix our inner cities and rebuild our highways, bridges, tunnels, airports, schools, hospitals" — and put "millions of our people to work" — but state and city officials haven't progressed too far since Trump's election in learning where, when, and whether his promised trillion dollars for infrastructure will originate.

"Trump has talked a good game. But [House Speaker Paul] Ryan is not going to give him any money until he sees how much the private sector is going to raise," says Berwyn-based Frank M. Rapoport, chief strategy adviser to the Association for the Improvement of American Infrastructure, a group of more than 60 big contractors (including Skanska and Turner), insurers, engineering firms, and other pros who build and finance big projects.

Builders don't seem to expect much from buyout billionaire and Commerce Secretary-designate Wilbur Ross' proposal to finance public projects from a onetime reduced corporate tax designed to persuade big companies to move their foreign profits back to the United States.

Mayors can keep holding their breath for the Senate Democrats' proposal to fund spending the old-fashioned way with federal borrowing, still the cheapest way to raise money, but radioactive to our Republican Congress after all the debt the nation piled up in the Bush and Obama years. Public spending also comes with strings attached, in the form of long-established and much-fought-over contracting, pay, and work rules.

Ryan has been telling states and towns they'll need to come up with $40 in private-sector spending for every $1 they can expect from the federal government.

The association expects that money can come from private investors and financiers, "who are ready to go," Rapoport tells me.

But first, states such as Pennsylvania and New Jersey, and cities such as Philadelphia, will have to adopt laws making it easier for private investors to pump money into projects, and get it back with interest over the years, under terms they expect they can find profitable.

Contractor lobbyists have been taking that message to Republicans in Harrisburg and Democrats in Trenton this month.

Pennsylvania already has a "public-private partnerships" funding law for highways.

Under Gov. Tom Corbett, the $899 million Rapid Bridge Replacement Project plans to rebuild 225 more bridges this year, making them "longer, wider, and designed to last over 100 years," according to the multinational consortium, Plenary Walsh Keystone Partners, which won bidding to oversee that job.

The group raised the money, is overseeing construction and 25 years of pothole-filling, inspections, and other basic maintenance on the state-owned bridges, and will be repaid by the state from its highway funds in installments over that period.

Not all of those bridges will be done in three years, as initially projected, as work will continue on some at least into fiscal 2018.

Private financing isn't always cheaper, but it tends to be faster, according to the builders' group.

Apples-to-apples comparisons are rare. Rapoport's association points to a California Judicial Council study that found a privately financed courthouse in Long Beach was finished two years faster than a similar courthouse in San Bernardino, where officials had trouble selling bonds to pay for the project.

New Jersey has allowed private financing for some state college and local transportation projects. A broader bill that would have expanded private financing was vetoed by Gov. Christie two years ago after a fight over prevailing wage levels.

Philadelphia voters will be asked in May's primary to support law changes introduced by Councilman Bobby Henon, an official of the Electrical Workers Union, in a bill approved by City Council and signed by Mayor Kenney last fall, to change the city's requirement that it rigorously hire low bidders and instead embrace a "Best Value" approach that would give city officials more flexibility on selected projects.

Rapoport says state and local government dependence on federal funds and bond financing has resulted in a general neglect of maintenance on public property — to the point where Philadelphia schools face an estimated $4.5 billion in deferred repairs — because it's been so much easier to sell bonds and build popular new structures.

He cites a Brookings Institution study that blames our edifice complex for "excess investments in facilities that local governments are not prepared to maintain."

Advocates such as Rapoport and his clients don't claim they'll be saving the public money, rather, that private financing and less-rigid contracting rules can save time and address long-term maintenance questions that have crumbled U.S. public works.

They'll be working this year to convince lawmakers that the private sector offers simpler ways to fix the public's broken stuff.