Infrastructure - A Whole Cost Shock in Itself
The West is experiencing a shortfall in funding to replace old infrastructure. The recent report from the US (Infrastructure 2008) paints an indicative picture of what this means. Cost of replacing infrastructure is one key cost I noted in the article “A Perfect Storm”. It has the chance of being a real discontinuity for those not watching.
Read the summary to get a drift of the problem for the USA. America’s Looming Infrastructure Crisis- A new Urban Land Institute/Ernst & Young report paints a grim picture of the state of America’s infrastructure. Anyone who drives in rush hour traffic, waits for a delayed flight, or who watches news reports of collapsed bridges knows that the US faces infrastructure challenges.
The new study, Infrastructure 2008, puts some numbers and analysis behind this reality. At present, the US faces a $170 billion annual funding gap in terms of dollars needed to bring its physical infrastructure up to global standards. While the US spends little to close this gap, other nations are investing for the long haul. For example, China now invests nine percent of gross domestic product to support infrastructure needs.
The threat of inaction stems not just from the hassles of traffic jams and delayed flights. World-class infrastructure, in the form of container ports, high-speed rail, and international air logistics hubs, will help determine which regions succeed in the 21st century economy. The report concludes with a host of recommendations for closing the infrastructure finance gap. Suggestions include more aggressive use of public-private partnerships, consolidation of Federal infrastructure programs, and creation of a National Infrastructure Bank to help fund large-scale projects.
Access the April 2008 Urban Land Institute/Ernst & Young report, Infrastructure 2008: A Competitive Advantage here.
Related posts
If you enjoyed this post, make sure you pass it on and subscribe to our RSS feed!
September 18th, 2008 at 8:06 pm
The Coroners report is now in regarding the road collapse which led to the death of five people earlier late last year. The day this accident happened we were planning to drive on this same road, so this one is a little close to home for me.
In essence the Coroners report highlights the issues arising from blurred responsibility for funding and maintaining existing infrastructure. As Larry alludes to above, infrastructure is not only an issue of expansion, but of maintenance. Personally I wonder whether the funding models are in place to do this. Article below.
Todd Davies
Theme Leader - Risk
From the Red Sea, Dahab, Egypt
http://www.smh.com.au/news/national/coroner-rules-on-somersby-crash-tragedy/2008/09/18/1221331006251.html