18 Aug Jason Grumet and McGraw Hill CEO Doug Peterson: To restore infrastructure, private sector must step up
Last month Congress once again threw a lifeline to the Highway Trust Fund in the form of another short-term extension. But the reality remains, spending-constrained governments – federal or otherwise – simply can’t afford the essential infrastructure investment our economy needs. Even critically important upgrades to our airports, shipping hubs, and water sanitation systems are beyond their means. There is simply no way to maintain a competitive advantage in terms of infrastructure unless the private sector steps up with additional resources.
China, for example, invests almost four times more in infrastructure as a percentage of its economy than does the U.S. And our domestic infrastructure funding gap – the difference between our nation’s investment needs and governments’ ability to fund construction and repair of critical public assets – is estimated at $200 billion a year, according to Standard & Poor’s Ratings Services.
Unlike government, the private sector does have the cash, as well as the investing expertise. It even has the appetite to finance projects and build them today. Yet institutional obstacles and a lack of reliable information on identified projects are keeping the private capital away.