“Downscaling Ambitions and Finding Creative Solutions”: Infrastructure 2011: A Strategic Priority Warns of Strain on U.S. Cities to Maintain Assets & Build Infrastructure Projects As Federal Funding Declines
A new report by the ULI and Ernst & Young looks at the challenges faced by many U.S. cities to provide adequate infrastructure services for their residents, workers and businesses. Already under-funded, America’s infrastructure investments will be further stifled this year by pressures to cut federal spending and reduce the deficit, compelling cities to be evermore creative and resourceful in securing partnerships to start or continue infrastructure projects. The report provides a snapshot of the infrastructure challenges across the U.S., particularly those related to transportation, faced by 20 major U.S. metropolitan regions – Atlanta, Boston, Charlotte, Chicago, Dallas-Fort Worth, Denver, Detroit, Houston, Indianapolis, Los Angeles, Miami, Minneapolis-St. Paul, New York City, Oklahoma City, Philadelphia, Phoenix, Salt Lake City, San Francisco, Seattle and Washington, D.C.
The report, which evaluates infrastructure investments on six continents, looks to the developing world and emerging markets for creative solutions to fulfilling infrastructure needs. “Whether in countries with mature economies or in emerging markets, government and business leaders have found a way to develop and execute on well-established national infrastructure policies and programs,” comments Malcolm Bairstow, Ernst & Young’s Global Leader of Infrastructure and Construction. “Many of these countries’ long-term view of the future economic importance of sound infrastructure planning has allowed them to be both strategic and more efficient in developing and directing funding for major projects.”
Among the countries in which infrastructure is a top priority:
-The UK—despite an austerity budget—has committed $326 billion over the next five years for projects related to rail, energy production and broadband access;
-France, Germany and Spain continue to build high-speed rail and freight networks between cities and as extended cross-border links;
-Australia is focusing on port expansion, rail rebuilding, and traffic congestion relief projects;
-China is funding a host of wide-ranging infrastructure programs, including completion of a 10,000-mile high-speed rail network by 2020. Other projects include new airports, ports and transit systems, all of which contribute to China’s standing as the world’s second-largest economy;
-India is actively seeking private financing for desperately needed infrastructure to sustain growth and meet its economic potential; and
-Brazil is pushing ahead with road, transit and water projects to accommodate its fast-growing economy, and to prepare for upcoming World Cup and Summer Olympics games
However, the report shows that despite fiscal constraints, some U.S. cities including Denver, Minneapolis-St.Paul, Seattle and Salt Lake City have successfully moved projects forward due largely to the willingness of local governments to pool resources and their ability to gain consensus on planning and spending strategies.
The most promising solution to the nation’s infrastructure shortfalls is to greatly expand public-private partnerships (PPP), the report suggests, pointing to the experiences of Virginia, Florida and Texas with managed toll roads as PPP success stories. “The interest in gaining access to private capital and expertise through PPPs should accelerate as public funding sources diminish.”
Other recommendations in Infrastructure 2011:
-Focus attention first on critical repairs and upgrades;
-Develop a national infrastructure strategy, funding merit-based projects that support the country’s overall economic priorities;
-Concentrate spending on the nation’s metropolitan areas and global gateways;
-Provide greater long-term certainty for federal funding to support planning for capital projects;
-Institute federal and state infrastructure banks to support project financing; and
-Phase in user fees to help fund infrastructure initiatives on a continuing basis.
To download a copy of the report click here
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