Private sector picks up public slack for aging U.S. infrastructure

As government faces budget shortfalls in a down economy, the private sector sees profits in repairing America's aging infrastructure.
Written by Andrew Nusca, Contributor

As government on every level experiences budget shortfalls and general economic duress, the private sector is filling the need to repair aging infrastructure in the United States.

A Washington Post report this morning explains how cash-strapped cities and states are tapping the private sector for money to build new bridges, roads or tunnels. With their backs against the wall, public officials are giving up sources of revenue or even selling assets completely in an effort to offload them from their balance sheets.

Why so dire? Because state transportation finances are in poor shape, and federal transportation finances are even worse. (The highway trust fund has or is expected to run out of cash four years running.)

It seems America wants an extensive transportation network, but has no stomach to set aside budget to maintain it.

Cezary Podkul reports:

There are at least 70 privately funded and managed infrastructure projects across the United States in various stages of development, according to a list compiled by the law firm Allen & Overy. These are part of a vast network of roads, bridges and tunnels — to say nothing of the subways, ports, airports and water systems — crying out for attention. Consider this: Over the past 60 years, the United States has built a 46,876-mile federal highway system that is now in dire need of repair. As a result, states have had to pour more of their transportation dollars into fixing aging highways and even in good times have little or nothing left over for new construction.

One upside: in many cases, the repairs could happen faster and cheaper than if the government had performed them. The downside: what was traditionally public may no longer be.

Investors see steady, predictable income in infrastructure -- after all, people will continue to need water and electricity and roads. Municipalities see a way out. In an uncertain economy, certainty is clearly attractive. The question: does it make as much sense over the long-term as it does the short-term?

With U.S. infrastructure aging, public funds scant, more projects going private [Washington Post]

Photo: Christopher Sessums/Flickr

This post was originally published on Smartplanet.com

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