CHICAGO Jan 21 Combining private investment in
U.S. infrastructure with federal stimulus money will increase
job generation and help state and local governments in their
struggle to balance budgets, a group of bankers and lawyers
said on Wednesday.
The group, which includes Morgan Stanley (MS.N), Merrill
Lynch & Co. MER.N, Citi Infrastructure Investors (C.N) and
law firms Mayer Brown and Freshfields Bruckhaus Deringer, wants
public-private partnerships to be included in any federal
"This is a golden opportunity for America to do it right,
essentially, and to attract private capital where before it
hasn't managed to in the kinds of volume that this economy
really should be attracting," said Dolly Mirchandani, a partner
at Freshfields Bruckhaus Deringer, on a conference call with
The group, which includes participants in big Chicago and
Indiana leasing deals, said more than $180 billion in private
capital was available for investment in U.S. infrastructure,
such as roads, bridges and mass transit.
Combining the private money with federal funds could boost
job creation to nearly 2 million by the final quarter of 2010,
according to a report the group released on Wednesday.
To get to that point, however, the group said the federal
government should tie stimulus funds to private capital
involvement or allow private investors to benefit from
The firms also called for expanded federal pilot programs
allowing for privatizations at airports and interstate toll
roads, and for the U.S. government to create national standards
to smooth the way for public-private partnerships.
Other items on the group's wish list included exempting
private activity bonds used for infrastructure from the
alternative minimum tax and from limits on the amount of bonds
that could be sold on a tax-free basis, creating a national
infrastructure bank that could also lend to the private sector
for qualified projects and the creation of a top-rated bond
guarantor for infrastructure financings.
With most states and cities facing budget deficits due to
the slumping economy, the group said public-private deals, like
long-term leases of assets, could bolster the governments'
"We are advocating that this is another tool in the tool
kit that is highly effective and can mitigate tax increases and
cuts in services as the economy is going through tough times,"
said Rob Collins, a managing director at Morgan Stanley.
(Reporting by Karen Pierog; Editing by Tom Hals)