|Pivot Point Underscores Need to Transform Crisis into Opportunity|
The United States desperately needs a 21st-century national infrastructure plan to emerge from its deep recession and ensure future prosperity, according to Infrastructure 2009: A Pivot Point, a new publication released today by the Urban Land Institute and Ernst & Young.
“The ongoing economic crisis has pushed the nation to a pivot point—either the country can risk further productivity decline, transportation congestion, and potential catastrophes from dilapidated systems, or it can develop new networks and land use models to accommodate the expected 100 million in population growth over the next generation,” the report states.
“Current infrastructure stimulus spending may help fix some outmoded and crumbling roads, transit lines, and sewage systems; but, it offers no long term solutions for keeping the U.S. competitive in global markets or addressing related energy consumption and environmental concerns.”Infrastructure 2009 calls for overhauling federal infrastructure policy and integrating land use and infrastructure planning at all levels of government. Such a plan, the report says, could result in greater leveraging of public investments; an improved mobility network that adequately supports desired economic growth; and the mitigation of greenhouse gas emissions through reduced auto dependency. The publication discusses the evolving infrastructure market, including private systems, and the combinations of public-private systems for funding, construction, operations, maintenance, and management.
“It’s encouraging to see the federal government take an interest in infrastructure issues for the first time in a generation. But the very real need for policy changes is getting muddled in the rhetoric about creating jobs, reviving the economy and fixing potholes,” said Maureen McAvey, ULI Executive Vice President, Initiatives Group. “The jobs program is not an infrastructure strategy. Our nation has an unprecedented opportunity to craft a definitive reengineering strategy. It must not be squandered.”
“Infrastructure represents a great diversification opportunity. Pension funds, insurance companies, and other institutional investors are looking to invest in infrastructure projects as a hedge against their long-term liabilities. An estimated $150 billion has been raised worldwide from the private sector for infrastructure investment,” stated Michael Lucki, Global Infrastructure Leader, Ernst & Young.
The report includes findings from a survey of 330 developers, which suggest the need for a greater national focus on transportation alternatives and funding mechanisms, and on more concentrated development patterns that minimize sprawl and auto dependency. Sixty percent of the developers surveyed said their projects have been constrained by a lack of spending on infrastructure, and 92 percent said rising prices for infrastructure have increased their development costs. Nearly all – 94 percent – said higher long-term gas prices will affect future development patterns. Minimum parking requirements are cited as leading to higher costs and inefficient land use planning -- 74 percent of the respondents cited minimum parking requirements as a significant burden on typical projects, and the majority said they would reduce parking if given the option.
Examples of innovative transportation systems and funding plans are included, with Denver’s transit network highlighted as a progressive response by a U.S. city to accommodate population growth. “Of all expanding Sunbelt cities, Denver makes the greatest strides – reclaiming its downtown and planning a hub-and-spoke light rail system reaching into surrounding suburbs with new development concentrated around transit stations,” the publication says.
In addition to an analysis of U.S. infrastructure expenditures and needs, Infrastructure 2009 also provides comparisons on a worldwide basis, including investments in China, Japan, India, the United Arab Emirates, United Kingdom, European Union, Australia, Canada, Brazil and Mexico. China leads the world in investments, with $9 trillion slated for infrastructure projects over the next 10 years. India, Russia and Brazil follow, with investments of $2.8 trillion, $2.2 trillion, and $1.1 trillion, respectively, over the same period.
“Emerging market countries – particularly China, India, and Brazil – continue to lead in attempts to modernize systems and vault their economies into global leadership positions,” the report states.
The bus rapid transit systems of Bogota, Colombia and Guangzhou, China are included as examples of systems that have proven to be highly cost-effective, efficient and convenient. The European Investment Bank, which lent $52 billion last year and is the world’s largest public financial institution, is noted for its success in lowering investor risk and fostering public private partnerships. Canada is hailed for national efforts to restore its infrastructure, using an approach that marshals federal programs to work in concert with state and local governments to tackle infrastructure planning and funding. Germany is cited for creating a master plan for freight transport and logistics designed to enhance mobility, improve efficiency and reduce carbon emissions. "Once an exemplar for other nations, the United States needs to consider borrowing and adapting successful infrastructure programs and initiatives from its competitors in order to catch up," the report advises.
“Over the course of 2009, Americans will come to terms with whether government has moved from lip service to concerted action in meeting its infrastructure challenges,” predicts Infrastructure 2009. It lists several actions that will indicate whether the federal government is gaining ground or lapsing back into its obsolete, dysfunctional mode of operations:
Same Old, Same Old
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