Report: US Infrastructure In Trouble

[IMGCAP(1)]WASHINGTON, DC-Every year $170 billion in infrastructure repairs and investment are not made in the US. This figure–identified by the Urban Land Institute and Ernst & Young in their annual report on the subject–underscores not only the urgency in making the necessary upgrades, but also the necessity of developing a systematic plan to make the investments in a smart and coordinated fashion.

“This country has been spending disparate money on infrastructure upgrades, but never with a larger plan in mind,” Dale Anne Reiss, Global Director of Real Estate, Ernst & Young in New York City, tells GlobeSt.com. “There is no strategic plan available right now, or even a concept for what that plan may be.” If lawmakers knew what the end goal was, it would be possible to develop a funding route, she adds. “It could be a gas tax, more public-private partnerships, user fees, congestion financing – there are any number of different ways to go about this.”

[IMGCAP(2)]Called Infrastructure 2008: A Competitive Advantage, the report’s findings are more downbeat than last year’s, which predicted that infrastructure will emerge as a new asset class for institutional investors seeking stable growth that can keep up with inflation. The 2007 report stated, somewhat hopefully, that one potentially good source of funds for such investments would be the various permutations of public-private partnerships that are so popular in Europe and Asia. However, after a year in which major proposed public-private infrastructure projects such as the Pennsylvania turnpike development foundered, enthusiasm for that particular model is diminished, Bob Dunphy, senior resident fellow for transportation and infrastructure at ULI, tells GlobeSt.com. “If anything we are backsliding. The problem is that what we really need is for policymakers to coalesce around a model that would provide better guidelines to sponsors and participants.”