WASHINGTON (Reuters) - A government plan to upgrade U.S. roads and rails would kick-start an infrastructure bank by putting in enough funds to lure private investment and eventually become self-sustaining, according to a proposal to be unveiled in the U.S. Senate on Tuesday.
The bipartisan plan advanced by Democrat John Kerry and Republican Kay Bailey Hutchison envisions a financing institution for loans and loan guarantees modeled on the Export-Import Bank, according to Senate sources with knowledge of the proposal.
It would never provide more than 50 percent of a project’s costs and in many cases would provide just enough to bring in private investment. It would become self-sustaining over time, the sources said.
President Barack Obama proposed creating an infrastructure bank in his 2012 budget as a centerpiece of a six-year, $556 billion plan for upgrading U.S. roads, bridges, transit systems and rail lines.
Support inside and out of government for an infrastructure bank is uneven and chances of it becoming a financing option are uncertain.
Similar proposals in previous years have gone nowhere in Congress.
Congress is expected to consider the Obama plan and other long-term transportation infrastructure proposals this spring.
Obama has released few details of how he wants to finance his infrastructure agenda. His top deputy on the matter, Transportation Secretary Ray LaHood, has suggested Congress fill in the details.
Obama and congressional Republicans have ruled out new gasoline taxes, currently the way the U.S. government finances road and transit construction.
Other proposals on reviving popular bond financing programs for transportation have been proposed by lawmakers in recent weeks and more initiatives are expected.
Republicans, especially those in the House of Representatives looking to cut federal spending, are wary of the steep capitalization costs of an infrastructure bank.
Potential private investors, including pension funds and corporations, are eager to participate in U.S. infrastructure development but first want to see a firm, long-term commitment from policymakers and Congress on planning and funding.
Editing by Andrea Ricci