Trump advisers see arbitration as a way to speed up infrastructure plans

© Reuters. LeFrak, President and CEO of the LeFrak Organization, answers a journalist’s questions during the Reuters Global Real Estate and Infrastructure Summit in New York

By Herbert Lash and Luciana Lopez

NEW YORK (Reuters) – A group that advises US President Donald Trump on infrastructure has proposed an arbitration-style pilot program to cut the current 10 years it often takes to start projects, without poor environmental standards.

The group, led by billionaire New York real estate developers Richard LeFrak and Steve Roth, made the suggestion to Trump and others in the White House last week, LeFrak told Reuters on Monday.

Builders, unions and others often lament permitting processes that can last a decade or more, a potential stumbling block in Trump’s plan to launch a 10-year, $ 1 trillion infrastructure construction program to create jobs and strengthen the economy. biggest in the world.

LeFrak said the advisory board is looking at a pilot program comparable to the arbitration process used in bankruptcy courts to speed up proposals, cut red tape and stop litigation that can paralyze infrastructure projects in court for years.

“Someone with authority would make the decisions, all the mitigation that should come from it, whether it be environmental mitigation, other mitigation, is decided at that moment and that’s it,” he said. “It is just a proposal. We ask you to try it. “

The council is not empowered to choose projects or make decisions about how to streamline the project permitting process for projects, he said. Any pilot program would depend on state and federal officials and Congress, he said.

LeFrak added that the proposal would not allow bridge, highway or airport projects to circumvent regulations, such as environmental ones. The idea would be to resolve disputes and objections faster in an arbitration-like environment so projects could be up and running in less time.

Australia, Canada and Germany typically take two years to approve infrastructure projects compared to 10 years in the United States, he said.

An abbreviated review process could leave projects open to concerns from environmentalists and others that an expedited permitting system could affect environmental protections.

Environmental groups are skeptical of Trump’s promise to reform government regulations without jeopardizing America’s air and water quality. When Trump releases his budget on Thursday, he is expected to cut the Environmental Protection Agency’s budget by 25 percent.

The Sierra Club, Nature Conservancy and other environmental groups, as well as the office of House Democratic Leader Nancy Pelosi, were not available for comment.

HIGH OF TAXES ON GAS

Permits and other regulatory hurdles can set projects back for years, a potential liability for a program looking to put money – and people – to work right away.

“There has to be some way without abrogating anyone’s rights to bring all of this to the table much faster,” said LeFrak, who is president and CEO of the LeFrak Organization, a leading developer and property owner in the Greater New York area. York and South Florida.

LeFrak pointed to the replacement within 14 months of a bridge that collapsed in Minneapolis in 2007 and killed 13 people as an example of how projects can be accomplished without compromising standards.

LeFrak also said that the committee wants to use private funds to absorb excess costs and maintain projects after completion.

He also suggested a possible solution to the key question of how to pay for Trump’s infrastructure program: a higher federal gas tax.

Otherwise, the funding will have to come from general tax revenue, he said. The state and local government pays for about 70 percent of infrastructure projects in the United States, with the remainder funded by the federal government.

The Society of Civil Engineers of America recommended last week that a federal tax of 18.4 cents a gallon on gasoline be raised to at least 25 cents a gallon to cover a shortfall in infrastructure funding that it said was $ 2 trillion.

“I’m saying that someone is going to have to pay for it. It’s not free, ”LeFrak said. “I wish I had enough power to impose a gas tax, but I am not.”