Ha! Two in Texas, Dallas to Houston HSR line finance. Cotton Belt line between Plano, TX and DFW Airport (which will be the 4th rail option into the Airport).
https://www.documentcloud.org/documents/3409546-Emergency-NatSec50Projects-121416-1-Reduced.html
The feature that seems to have the most appeal is that there will be some ‘Funding with Private Investment’. Infrastructure projects will provide a lot of benefits/jobs to society in the areas of their construction.
It seems like the New Administration is moving along with more speed and positivity than ‘Washington’ is used to seeing.
Not to be an unqualified pessimist, but I’ll believe it when the bulldozers start moving.
Starting, of course, with the entrenched bulldozers in the Congress - which has to fund all this stuff.
Hey! Isn’t this the kind of, “Let’s make jobs with public money,” thing that the other Party is notorious for…
Chuck (centrist independent)
It’s a “public-private partnership”…that’s pretty sure to mean that the public pays the taxes and the benefits go to entrenched private companies.
Actually maybe not, I think during the Japanese PM trip he will announce they are picking up the tab for the Dallas to Houston HSR route as what Texas Central previously stated. Not 100% sure but it’s a strong possibility as Texas Central is still insisting it will get built without U.S. Taxpayer money AND they need to cough up some serious Capital before 2018 if they are to start construction then. So we will see.
Billions for barges, but not one cent for freight rail. Bad plan.
Mac
In this “public-private partnership,” what does the private investor get for their invenstment?
A guarantee from the government on the loan, silly.
Oh believe me, I have no support for, or confidence in the deal. I just figured that since the media is reporting that the deal is being made more palatable by claiming to be partly privately funded, someone ought to explain what the funder
From a freight rail standpoint, I think the most effective option would be a combination of items:
Taking what is commonly referred to as the Short Line Tax Credit (AKA Section 45G Tax Credit or Rail Track Maintenance Track Credit) of up to $3,500 per track mile and then make it permanent, increase it to $5,000 with an automatic inflation adjustment annually to be announced by USDOT annually in December, and also let Class I railroads be eligible. While all Class I railroads spend more than that, it is a way to get capital into the railroad industry.
Have the USDOT give loan guarantees to reduce the cost of capital for all capacity increases that result in either CTC on dark territory or second main track installation (including bridge projects such as, for just one example, the BNSF bridge at Sibley MO over the Missouri River). This would basically let the Class I railroads borrow at Aaa/AAA interest rates for capacity expansion so would greatly cut their overall cost of capital and encourage capacity expansion, maybe making the difference of whether capacity expansion happens or not.
Allow capacity expansion projects noted above to be depreciated over 10 years to further lower the income tax burden on railroads.
Cut the overall corporate tax rate to 15% to free up more cash flow for capacity investments.
The idea behind these four items is to encourage capacity construction which would foster faster transit times to allow railroads to better compete to grow traffic.
Very good posting kgbw49- well thought out, well put.
These are the directions that it’s moving toward…I only hope it can become a reality. Lot of dark forces with an agenda opposed to these ideas.
When you have government unwilling and/or unable to cut it’s spending, and tax liability is reduced for the big fish in the pond, who get’s left holding the bag?
Some on here overlook the fact that a federally guaranteed loan in the 1930s allowed the PRR to extend electrification. And the PRR repaid in full, including interest.
But we are not talking about the government loaning money or guaranteeing a loan. We are talking about the private sector paying for public infrastructure. How does that work?
I don’t believe this would be a loan to the government by the private sector. If that were the case, what good would it do for the taxpayer? The money would have to be paid back to the private investor by the government / taxpayer. The premise of the private sector investment is to relieve the taxpayer from the total cost of infrastucture rebuilding. The only way private funding could accomplish that is if it were a private investment in public infrastructure in a way that the infrasturcture itself pays back the private investor.
Sorry, but you seem to have gotten in a muddle.
I am sorry that it seems that way.
Whatever trump does, “Mexico will pay for it”. And it will be terrific. Just wait and see.[}:)]
Tom
And if anybody tells him anything to the contrary … they are miserable losers with fake news.
[quote user=“schlimm”]
Murphy Siding
Euclid
CMStPnP
CShaveRR
It’s a “public-private partnership”…that’s pretty sure to mean that the public pays the taxes and the benefits go to entrenched private companies.
Actually maybe not, I think during the Japanese PM trip he will announce they are picking up the tab for the Dallas to Houston HSR route as what Texas Central previously stated. Not 100% sure but it’s a strong possibility as Texas Central is still insisting it will get built without U.S. Taxpayer money AND they need to cough up some serious Capital before 2018 if they are to start construction then. So we will see.
In this “public-private partnership,” what does the private investor get for their invenstment?
A guarantee from the government on the loan, silly.
Some
The US government guaranteeing a loan is not the US government giving a loan. The guarantee is there to signal to lenders who will be lending money to the borrowers that there is a backstop behind it in the event of defaut. Typically loan guarantees will have pledged assets that will reimburse the guarantor. In the instance where core capacity for railroads is the issue, the idea is that if a railroad has the need to create additional capacity to improve service levels, they are able to borrow at a lower interest rate, thereby increasing the odds that a project is feasible. The railroad would still have to pay back the lenders on the bond payment schedule.
This type of loan guarantee is common for Municipal, County and School District infrastructure projects such as water towers, sewer systems, airport infrastructure and school buildings where a local bond is sold by the local entity but it is sold with with the bond rating of the state that is guaranteeing the loan (also called credit enhancement). Instead of the local entity borrowing with a bond rating in the high B or low A categories, which carry higher interest rates, they can instead sell the bonds at the state’s bond rating - typically at least Aa2/AA - and can cut their interest rate tremendously, even potentially in half in some instances.
Anyone who has refinanced their home to a lower interest rate knows how much of a difference a lower interest rate makes on their monthly payment.
It is the same concept with having the US government guarantee - credit enhance - a loan for core infrastructure. Instead of borrowing at, say, 6-7-8-9 percent for core infrastructure, borrowing at 4 or 5 percent results in a lower payment and the lower payment in fact makes it more likely that the borrower will be able to make its payments.
And the railroad still has to pay back the loan, so they aren’t going to propose projects willy-nilly.
What if lower interest rates made finishing the Sunset Route two main track projec