Comments on: Benefits and Pitfalls of a National Infrastructure Bank http://www.thetransportpolitic.com/2010/03/08/benefits-and-pitfalls-of-a-national-infrastructure-bank/ Fri, 10 Feb 2012 22:58:11 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Henry S http://www.thetransportpolitic.com/2010/03/08/benefits-and-pitfalls-of-a-national-infrastructure-bank/#comment-32272 Henry S Tue, 09 Mar 2010 12:00:46 +0000 http://www.thetransportpolitic.com/?p=6239#comment-32272 Given LA's history of voting for taxing themselves to fund new transit I would think it's highly improbable that the county and LACMTA won't push for another Measure R-like proposal, especially if they frontload the Measure R package. On the National Infrastructure Bank: Although theoretically a good idea I honestly can't see it being pushed through, especially with whole "Tea Party-Big Government is destroying our lives" movement gaining strength. Moreover, I don`t think that the comparison to the EIB is necessarily fair. After the creation of the EIB, the EU identified a serious vision that was to be funded, chief among them the creation of the TEN`s. The National Infrastructure Bank as it stands not only lacks clearly defined long term vision but also any sort of political cohesion as to what that vision should entail. Given LA’s history of voting for taxing themselves to fund new transit I would think it’s highly improbable that the county and LACMTA won’t push for another Measure R-like proposal, especially if they frontload the Measure R package.

On the National Infrastructure Bank: Although theoretically a good idea I honestly can’t see it being pushed through, especially with whole “Tea Party-Big Government is destroying our lives” movement gaining strength. Moreover, I don`t think that the comparison to the EIB is necessarily fair. After the creation of the EIB, the EU identified a serious vision that was to be funded, chief among them the creation of the TEN`s. The National Infrastructure Bank as it stands not only lacks clearly defined long term vision but also any sort of political cohesion as to what that vision should entail.

]]> By: Roland S http://www.thetransportpolitic.com/2010/03/08/benefits-and-pitfalls-of-a-national-infrastructure-bank/#comment-32270 Roland S Tue, 09 Mar 2010 11:38:00 +0000 http://www.thetransportpolitic.com/?p=6239#comment-32270 <q>If Los Angeles compresses thirty years of transit spending into ten, what happens during the other twenty? Nothing at all, unless another separate revenue source is established.</q> Doesn't matter, though. Whatever comes after the Measure R projects won't happen until the 30 years are up, or until LACMTA finds another revenue source. In the meantime, they might as well front-load the Measure R revenue to get those projects done ASAP, and to avoid construction cost increases over time. If Los Angeles compresses thirty years of transit spending into ten, what happens during the other twenty? Nothing at all, unless another separate revenue source is established.

Doesn’t matter, though. Whatever comes after the Measure R projects won’t happen until the 30 years are up, or until LACMTA finds another revenue source. In the meantime, they might as well front-load the Measure R revenue to get those projects done ASAP, and to avoid construction cost increases over time.

]]> By: BruceMcF http://www.thetransportpolitic.com/2010/03/08/benefits-and-pitfalls-of-a-national-infrastructure-bank/#comment-32219 BruceMcF Tue, 09 Mar 2010 02:41:05 +0000 http://www.thetransportpolitic.com/?p=6239#comment-32219 What a coincidence - I just proposed established Line Development Banks to establish Steel Interstate lines, funded by user and access fees and financed by an petroleum <i>import</i> tariff. The tariff dedicated to each line would extinguish when the line is complete. For carbon reducing investments, a similar form of development bank (once referred to as Connie Mae, but with Fannie Mae having done so well, the name may need revisiting) can be financed by a portion of Carbon Cap and Dividend receipts, with the funding provided by the savings in energy or other costs. Starting at $1b in interest subsidy per year and rising by $1b each year to $5b, the capital base of a National Infrastructure Base would grow by something around $20b per year at 5% interest to a total of between $75b and $150b, depending on interest rates ... ... with the interest cost to the borrowing ranging from 0% for competitive projects demonstrating the most cost effective contribution to the highest priority public objectives, to the Bank's borrowing cost for regular non-competitive qualifying investments. Paying back the original capital cost, plus whatever tier of interest expense it has qualified for, that's what makes it a Development Bank. As repayments are made, and as interest payments start flowing on the interest generating lending, that allows it to roll over its capital base and expand its capital base respectively. What a coincidence – I just proposed established Line Development Banks to establish Steel Interstate lines, funded by user and access fees and financed by an petroleum import tariff. The tariff dedicated to each line would extinguish when the line is complete.

For carbon reducing investments, a similar form of development bank (once referred to as Connie Mae, but with Fannie Mae having done so well, the name may need revisiting) can be financed by a portion of Carbon Cap and Dividend receipts, with the funding provided by the savings in energy or other costs.

Starting at $1b in interest subsidy per year and rising by $1b each year to $5b, the capital base of a National Infrastructure Base would grow by something around $20b per year at 5% interest to a total of between $75b and $150b, depending on interest rates …

… with the interest cost to the borrowing ranging from 0% for competitive projects demonstrating the most cost effective contribution to the highest priority public objectives, to the Bank’s borrowing cost for regular non-competitive qualifying investments.

Paying back the original capital cost, plus whatever tier of interest expense it has qualified for, that’s what makes it a Development Bank. As repayments are made, and as interest payments start flowing on the interest generating lending, that allows it to roll over its capital base and expand its capital base respectively.

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