State Projects Equipped With Private Cash
Dec 06, 2016 08:04 PM EST
Dec 06, 2016 08:04 PM EST
The Economy and Development Ministry (EDM) is paving the way for the creation of an Infrastructures Fund, which willbe included in the European Commission's so-called Juncker Plan for financing projects of public interest with private participation.
The participation of private funds is a prerequisite for an investment to be incorporated in the European Fund for Strategic Investment, as the Juncker Plan is formally named. The absence of mature proposals is the main reason why no investment out of a list of 42 projects budgeted at 5.6 billion euros and submitted by the ministry has been approved for funding to date.
The need to formulate an integrated proposal for the promotion of investments with a private partner has compelled the government to revise its policy in order to unblock the procedure. Therefore, its new plan provides for the projects to be proposed to the new fund for approval to include some private-sector participation, ie a Public-Private Partnership.
This way Greece will seek to secure the participation also of the European Investment Bank, which constitutes the financing arm of the Juncker Plan, as it is the EIB that funds the projects approved by the European fund.
Moreso, some commodiies have been made available to the public with private cash. Remembered, it really took years of lawsuits and political battles for California to finally break ground last year on the nation's first bullet train, which aims to connect San Francisco to Los Angeles by 2029.
High-speed rail advocates had hoped the line, supported by more than $13 billion in state and federal money, would inspire similar government-financed projects. Instead, its many delays have left rail groups wary of accepting public funds for projects they are proposing in three other states.
Companies in Texas, Minnesota and Nevada all plan to tap private cash from investors globally, with help from foreign train makers and governments eager to export train technology. The projects would rely on partnerships with Japanese or Chinese firms that face saturated train markets at home.
"The United States is the Holy Grail of deployment for Japan, China, France, Germany and Spain," said Tim Keith, Texas Central CEO.
California's example shows that taking taxpayer money opens the door to political and legal challenges that can drag out planning, bidding and approvals for years, private rail advocates said. Companies now see a quicker - even cheaper - path by largely avoiding such headaches.
The company said last year it would seek money from Chinese investors. Now, it said it is considering two foreign partners for the $4.2 billion project, which seeks to connect the twin cities of Minneapolis and St. Paul to Rochester, Minnesota, by 2022.
Texas Central is paying for engineering studies with $75 million from Texas investors, $40 million from a state-backed Japanese development fund and about $130 million in design work from two firms. The Dallas-to-Houston rail line is projected to cost $12 billion and be completed by 2021.
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