Federal agencies have estimated that hundreds of billions of dollars will be needed over the next generation for construction and upgrades of America's water infrastructure. To assist with this enormous undertaking, Congress has been considering the formation of a federal National Infrastructure Bank to organize public and privately financed projects. Part of this consideration was to have the Government Accountability Office (GAO) talk to stakeholders about the idea, and also get a handle on what kind of financing (and where it has come from) is being talked about.

Stakeholders were largely in favor of the bank's creation, but expressed a lot of concerns about its mission. A third wanted it to focus solely on water, while the majority favored a mission that would include energy and transportation projects. A major hurdle, too, was administrative: which agency(-ies) would control it, how much are taxpayers on the hook if things go awry, etc.

The GAO found general agreement among stakeholders that the federal government should supply its initial capital, with the bank authorized to use most typical banking activities (loan guarantees, etc.) to enhance its revenues. The EPA's current Clean Water State Revolving Fund would be rolled into the bank's mission.

More variance affected the question of which projects would be eligible for financing, and how they should be assigned priority. Large projects seemed to be favored, and a majority agreed that priority ought to go the biggest need (not be shared equally among states or communities). The report also identified examples of privately financed projects, and noted advantages and pitfalls from those experiences.

Read the report at www.gao.gov/products/GAO-10-728.

SOURCE: GAO report