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13 KEYNOTE SESSION The Federal Environment Around P3s Morteza Farajian, Build America Bureau, U.S. Department of Transportation, Keynote Speaker Morteza Farajian described the background and purpose of the U.S. Department of Transportation (DOT) Build America Bureau. The bureau was created by Congress to address innovative project finance and delivery and can help stakeholders identify which individuals in the U.S. DOT to talk with about grant and credit financing. Farajian added that the bureau talks to and educates different stakeholders about U.S. DOT products and state and private-sector best practices. Farajian described the financial tools that the U.S. DOT offers, including the Transportation Infrastructure Finance and Innovation Act (TIFIA) and the Railroad Rehabilitation and Improvement Financing program. He noted that TIFIA is a very powerful program and that the U.S. DOT is currently discussing how to integrate airports into the TIFIA program to help address an estimated $128 billion needed in airport investments for the period from 2019 to 2023. Farajian stated that the private sector can provide innovation, passenger experience management, and cost and other efficiencies. He noted that there are many different models for private investment that airports should evaluate on the basis of advantages, limitations, and costs and benefits. When working with the Virginia DOT, Farajian led evaluations of P3 options that involved looking at the project on its own merits, bringing stakeholders together to discuss options and align goals, and documenting how the decision was made to ensure transparency. The bureau is seeking to compile best practices and other educational material related to airports and would like to provide technical assistance and conduct peer exchange sessions. Farajian asked what the roadblocks to greater private investment in the airport sector are. An audience member asked how airports could participate in the TIFIA program, as the enabling legislation refers to surface transportation projects. Farajian responded that the U.S. DOT is looking to identify what improvements would qualify and noted that any airport with transit access could have eligible projects related to, for example, parking garages or car rental facilities. An audience member noted the challenge of having to speak with many different offices or individuals within the U.S. DOT to get a project funded and approved. Farajian responded that there are still many policy issues and inefficiencies to address, but the bureau can
14 serve as a champion and guide to help interested parties navigate the process and speak with all key parties in the U.S. DOT. In response to a question from Lynn Hampton, Farajian clarified that TIFIA assistance is limited to 33% of the total eligible project costs, or up to 49% of eligible costs for smaller or rural projects. He noted that private activity bonds are taxable, which makes them more expensive in the market. The U.S. DOT can allocate tax-exempt status to eligible projects so that entities can issue tax-exempt bondsâanother very attractive tool that private companies use a lot.
