Poll: U.S. voters back privatized infrastructure
(This story is part of a Reuters series on infrastructure)
NEW YORK, June 8 (Reuters) - U.S. voters are increasingly supportive of privatized investment in the country's infrastructure, especially in lieu of tax increases or budget cuts, according to a new poll sponsored by investment banking firm Lazard (LAZ.N).
The poll, the result of interviews with 1,000 likely voters nationwide in May, found that 59.8 percent of those questioned support private investment in public assets like roads, airports or stadiums. That was up from a support level of 52.2 percent last year and 57 percent in 2007.
"On the broad question of public private partnerships, if you view that as an available budget tool for governments together with every other alternative that is a budget tool, public private partnerships poll better," George Bilicic, chairman of Lazard's Power, Utilities and Infrastructure business, told Reuters. "That includes cutting spending, borrowing more money and raising taxes."
Just over 60 percent of those polled who consider themselves political moderates favor the spending, according to the poll.
Private infrastructure investment has picked up steam in the United States in recent years. Still, several high-profile infrastructure deals have been torpedoed under the scrutiny of voters and politicians, including the failed $12.8 billion effort to privatize the Pennsylvania Turnpike.
Bilicic stressed that it is important for governments and investors considering such deals to be able to clearly demonstrate the benefits of private infrastructure investment.
"The broad question is 'can you structure the private investment solution in a way that is even more consistent with the public interest and that would generate even more support?'"
SHORTER LEASE LENGTHS HELP
Bilicic said the data in the poll could help government bodies and private investors understand how to better structure the deals in order to improve their perception by the public.
"People want their governments to pursue creative solutions to the fiscal problem," he said. "We see that to be a logical opening for public private partnerships, assuming they are properly structured in a manner consistent with legitimate public policy objectives."
Voters are more likely to back deals with shorter lease terms, according to the poll.
More than half of the respondents polled said they would be in favor of renewable 15-year lease terms in new infrastructure projects. That compares with less than 37 percent support for lease terms of 20 years, 30 years or longer.
Bilicic suggested that the deals could be structured with a 15-year lease that would automatically renew if certain operating standards are met -- a structure that could be beneficial to both investors and voters.
"A shorter lease term polls better, and you can structure the lease so you can get similar economic benefits as a long term lease," he said.
The success of a possible deal could also depend on the type of asset in question.
Private investment in convention centers and stadiums, trash disposal, parking garages, rail, airports, and roads and bridges all received more than 60 percent of support in the poll. Assets like wastewater treatment plants, ports, lotteries and drinking water systems were all viewed less favorably.
"In the United States, non-energy infrastructure is a brand new asset class and it's a brand new area of commercial activity," Bilicic said. "The level of constructive creativity has been pretty limited and there's a tremendous opportunity for new structures, new approaches, (and) new ways to work with governments and stakeholders."
