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NEW YORK CITY-As recent events such as the collapse of the I-35W Bridge in Minneapolis on Aug. 1, show, public infrastructure requires investment to make safety repairs and maintenance. The private sector could provide a major part of the solution for governments struggling to fund these projects, according a recent report by Ernst & Young titled "Investing in Global Infrastructure 2007: An Emerging Asset Class."
The huge capital demands of large-scale infrastructure projects around the world--running into more than a trillion dollars over the next decade--will likely create intense competition among governments to attract private investment. The report estimates private sources could account for 10% to 15% or roughly $240 billion to $360 billion of the capital needed for infrastructure projects annually worldwide.
"There are good opportunities to create win-win situations," notes Dale Anne Reiss, Ernst & Young's global real estate director. "Governments urgently need funding and private-sector expertise to improve or replace aging infrastructure. And investors can benefit through the steady, long-term returns infrastructure investments can provide."
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