America faces a $1 trillion infrastructure funding crisis. Government alone can’t fully fund all of the roads, bridges, and other critical infrastructure our economy needs – let alone upgrade our airports, shipping hubs and water facilities to meet the challenges of the coming decades. Private investors, working together with government, will have to step up with additional resources in order to bridge the gap.
What’s causing the infrastructure funding gap?
$2 Trillion
In Infrastructure Investment Needs
$1.7
Trillion
Surface
Transportation
$134
Billion
Drinking and
Waste Water
$126
Billion
Airports
$30
Billion
Ports and
Inland Waterways
$1 Trillion Funded
At the current pace, there will be roughly
$1 trillion in government funding available.
$1 Trillion Not Funded
That leaves a $1 trillion infrastructure investment gap.
What are the barriers to private sector investment?
Difficult to Assess
It is difficult for investors to assess project quality, due to a lack of data standardization and transparency about projects’ economic benefits.
Limited Track Record
New financing mechanisms, such as land value capture and variable property taxes, do not have a recent track record in the US. This makes it difficult to benchmark and determine their value.
No Project Pipeline
With no clear pipeline of projects, there is no certainty of a long-term diversified portfolio for interested investors.
Demand Risk
Projects may not be used by consumers as much as projected. This creates the risk that future revenue collected from tolls or beneficiary fees will fall short.
Complicated Regulatory Environment
States and cities have varying laws and regulations on private participation in infrastructure. This makes working in multiple jurisdictions costly – to impossible.
Political Uncertainty
Investors are concerned with unexpected risks, like a change of administration or neighborhood opposition, which could delay or stop a project before it’s operational.
A Serious Return on Investment
Increasing
Infrastructure
Investment by
1%
of REAL GDP
over 3 Years
