We have been underinvesting in infrastructure for at least 30 years but green shoots heralding an infrastructure renaissance are everywhere. New technologies, innovative funding schemes, and bold new projects and a revolution in regulation are shifting the market to focus on citizen-driven project and greater speed in facilitating project approvals.
It’s now time for all of us — infrastructure professionals and infrastructure users — to put our shoulders into this change and push, hard.
Three of the 100 projects CG/LA Infrastructure hosted at our 10th North American Leadership Forum in Dallas this past week are evidence of the changes ahead. Those are: Texas Central’s high-speed train from Houston to North Texas, the nation’s first true high speed railroad; SeaOne’s compressed gas liquid technology, that is exporting the U.S. shale revolution to the Caribbean; and Control Thermal, which is generating geothermal electricity and mining lithium critical to our new technologies in the California desert.
Those three projects, alone worth $41 billion, create jobs, move things – whether molecules, electrons or people – and create better lives for generations to come. They are shining a light in a country, where infrastructure investment is at an extraordinarily low 1.3% of GDP.
Amid surveys that show the public is calling for far more to be done, one has to ask: “What are we waiting for?”
Increased infrastructure spending is supported by Democrats, Republicans and independents because it is critical to economic growth and good jobs, expanded urban mobility, and a greater equality of opportunity for all. The real question is whether our political leadership can recognize this moment for what it is, and take the action required to double our level of investment to $600 billion annually, and keep it there for 10 years.
A significant portion of the funding is set to come from the $24 trillion stored in US pension and insurance funds. The priority is to create a pipeline of investable projects, attract capital and explore entrepreneurial ways of using it for the public good, and promote oversight by a new class of purpose-driven public servant. To get that done we have to reduce the burden of regulation without lessening its impact. We also have to support leaders who develop private projects and increasingly enable private-sector participation in our infrastructure market, of which 80% is fenced off from the free market’s energy and creativity.
We must first begin to create investable project pipelines around sectors such as water, transit, and electricity transmission. Next, we will be able to create mechanisms to channel our savings and investments into visionary projects such as driverless vehicle lanes and smart cities; the revitalization of our nation’s dams, waterways, highways; new assets such as light rail line or water utilities; or transformational projects that combine the three.
In addition to the $24 trillion in pension fund and insurance assets looking for a long-term, reasonable return, there are other resources that can be marshalled for infrastructure development. Among them, there’s roughly $19 trillion in public assets that could be strategically leased to the private sector. We might also form a new institution such as an infrastructure bank as a means to identify priority projects, and enable average citizens to make regular investments in our country’s future.
A pipeline of the right projects will create $2.5 trillion in new direct investment over 10 years, including great jobs for 40 to 50 years. Texas Central’s high-speed train project alone will create 10,000 new direct jobs for each year of construction, and 1,500 permanent jobs once operational without a dime of taxpayer money.
Sustained investment of this kind would add a minimum of 1% to our GDP each year, for the next 10 years. In addition, it would drive growth, act as a shock absorber for any economic downturns, and create enormous global influence. People around the world would once again admire our infrastructure leadership as we develop cutting-edge public services to dramatically increase mobility, health and quality of life for all citizens.
This investment also generates an enormous range of new businesses. Another project presented last week at the Leadership Forum – the $15 billion Gateway tunnel between New Jersey and New York – will create manufacturing jobs all across the country for the next 30 to 40 years.
Infrastructure investment – particularly infrastructure investment with private money – is often confused with private gain and stopped in its tracks. But, whether public or private, infrastructure investment is the most efficient public value creator of our time. This is our #1 national priority, and it is a thoroughly bipartisan priority, creating public wealth that we will all be able to share for the next 40 to 50 years.