Strategic Rail Finance
1700 Sansom Street, Suite 500
Philadelphia,
Pennsylvania 19103
Phone: 215-564-3122
Fax: 215-564-3288
 

Strategic Rail Finance and Innovative Financing

    As a senior policy consultant to Strategic Rail Finance, I provide legislative guidance on transportation  policy recommendations and private-public financing strategies.  I first met Strategic Rail Finance’s president, Michael Sussman, in 1996 during the drafting process of the Transportation Equity Act for the 21^st Century (TEA-21).  This bill guided federal investments in highway, mass transit and other federal transportation programs over a six year period.  I had the good fortune, in 1991, to work as a senior aide and committee liaison on the previous six-year Intermodal Surface Transportation Efficiency Act.  

    Beginning in 1995, with the support of the U.S. Department of Transportation and private sector financing experts, I began work on a series of bills as an aide to Congresswoman Rosa DeLauro.  This “innovative financing” legislation was designed to create mechanisms for attracting private investments in infrastructure with limited public financing support.  By lowering the financial risk of investing in “nationally significant” projects, private investors and their creditors would be more inclined to pursue the development of large-scale projects, such as highways, bridges, mass transit, schools, water and wastewater treatment facilities, ports and airports.  

    In spite of significant input from the finance industry and the USDOT, we had overlooked freight railroads until Michael Sussman brought the oversight to our attention.  Freight railroad projects, he offered, provide a “public good” service, and have a low default rate.  As he advocated to our members offices, freight rail transport is safe, efficient, contributes positively to the economy, and eases road congestion.  Through his efforts, the legislation was expanded to include freight rail-related projects.

    In 1997, with bipartisan support and the inclusion of innovative financing provisions by Senator  Chafee and Congresswoman DeLauro, TEA-21 became public law.  Intermodal freight railroad projects with linkages to the National Highway System gained eligibility for federal innovative finance programs.

    Strategic Rail Finance aided my understanding of the freight rail industry and prompted congressional efforts to advance tools for expanded funding of freight railroads.  Michael was particularly concerned about the opportunity of supporting Class II and III railroads.  He offered innovative approaches to the challenge of financing this under-capitalized industry segment. 

    Years later, with Strategic Rail Finance’s ongoing success in freight rail financing, Michael Sussman and I continue to collaborate on methods for improving industry capitalization.  Michael’s vision is to see a significant national increase in freight railroad utilization.  With his continued presentation of new ideas to freight railroad owners, industry associations, and public sector decision-makers, this vision can become a reality.