I'm in Europe for a few days in part to examine how countries there are dealing with infrastructure solutions to keep them competitive in the future. New infrastructure can become a big loss leader. In the U.S. we can point to Boston's "Big Dig" -- its billions of dollars in cost overruns and leaking tunnels. But the new road, tunnel and bridge system has transformed Boston's financial district and arguably helps position the city for long-term growth.
The 32-mile long English Channel tunnel (the Chunnel) is another example of huge infrastructure expense overruns and operating deficits. Completed in 1994, the Chunnel cost $21 billion to construct in a titanic engineering feat to bore the world's longest underwater tunnel. Chunnel operators, meanwhile, continue to register large (though declining) annual deficits for freight and passenger service between England and the Continent. Paying off debt is a huge anchor and high charges discourage some use.
Still, the Chunnel's future value to the UK and France appears considerable, especially now with introduction of high speed passenger train service from London to Paris and Brussels. The trips take two hours plus center city to center city. No more hour long cab rides to and from airports and potential weather delays in inclement Northern European climates. In fact, plane trips between the cities have dropped dramatically, and the train has become the favored form of intercity transport -- it's just faster and more convenient or in other words more efficient and counter-intuitively more 21st century. Yes, in a retro sense, railways may offer more futuristic solutions to congestion and pollution problems than continued dependency on our two most significant and transformative 20th century inventions -- cars and planes.
Now, the United States needs to get its act together and make the necessary investments in creating high speed train corridors along the East and West Coasts and within other high growth states/regions (Texas, Florida). The challenges and political impediments will be huge, not to mention the costs -- many multiples of a Chunnel or Big Dig. But can America afford to depend on clogged roads, which can make trips to the airport longer than scheduled flight times to destination cities, and on airports that can't handle increasing demand for flight slots? The country also needs freight train corridors to help relieve congestion and pollution from over-reliance on truckers. The alternative is eventually gridlocked transport and the costs to the economy will be prohibitive. If we continue to stand pat the rest of the world could literally leave us behind.
© Miller Ryan LLC 2008
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Jonathan D. Miller
A marketing communication strategist who turned to real estate analysis, Jonathan D. Miller is a foremost interpreter of 21st citistate futures – cities and suburbs alike – seen through the lens of lifestyles and market realities. For more than 20 years (1992-2013), Miller authored Emerging Trends in Real Estate, the leading commercial real estate industry outlook report, published annually by PricewaterhouseCoopers and the Urban Land Institute (ULI). He has lectures frequently on trends in real estate, including the future of America's major 24-hour urban centers and sprawling suburbs. He also has been author of ULI’s annual forecasts on infrastructure and its What’s Next? series of forecasts. On a weekly basis, he writes the Trendczar blog for GlobeStreet.com, the real estate news website. Outside his published forecasting work, Miller is a prominent communications/institutional investor-marketing strategist and partner in Miller Ryan LLC, helping corporate clients develop and execute branding and communications programs. He led the re-branding of GMAC Commercial Mortgage to Capmark Financial Group Inc. and he was part of the management team that helped build Equitable Real Estate Investment Management, Inc. (subsequently Lend Lease Real Estate Investments, Inc.) into the leading real estate advisor to pension funds and other real institutional investors. He joined the Equitable Life Assurance Society of the U.S. in 1981, moving to Equitable Real Estate in 1984 as head of Corporate/Marketing Communications. In the 1980's he managed relations for several of the country's most prominent real estate developments including New York's Trump Tower and the Equitable Center. Earlier in his career, Miller was a reporter for Gannett Newspapers. He is a member of the Citistates Group and a board member of NYC Outward Bound Schools and the Center for Employment Opportunities.
