Infrastructure 2012

8/2/2019 Infrastructure 2012

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Infrastructure2012Infrastructure2012Spotlight on leaderSh ip


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Infrastructure2012Spotlight on leaderSh ip


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In rastructur e 2012i i

2012 by h ub Ld Ii d e & Yog.

Pid i h uid s o ami. all igh vd. no p o hi book my b podd i y om o by y m, l-

oi o mhil, ildig phooopyig d odig, o by y iomio og d ivl ym, wiho wi pmi-

io o h pblih.

rcmm bbc s:

ub Ld Ii d e & Yog. Inrastructure 2012: Spotlight on Leadership. Whigo, D.c.: ub Ld Ii, 2012.

Uli C numb: I24

iSBn: 978-0-87420-200-7

Cv: coi i i h Po o sigpo, h wold bi po. Iiol d h hlpd l sigpo gowh.

(Eightfsh/Getty Images)

Contributing Authors

J d. M, Primary Author

db Ms, Coauthor, Special Section

rc McC, Coauthor, Special Section

uLi PrinCi PAL reseArChers And Advisers

Mu Mcav

Executive Vice President

Iiiiv Gop

tm Mu

Senior Resident Fellow

Iiiiv Gop

e McMSenior Resident Fellow

Iiiiv Gop

rc McC

Vice President

I Iiiiv

Uw Bs

Senior Vice President

Iiiiv Gop

S J ps

Senior Research Associate

I Iiiiv

S nmcResearch Associate

I Iiiiv

am M

Intern

I Iiiiv

C es

Intern

I Iiiiv

ernst & Young Advisers

hw r

Global Real Estate Leader

Mcm Bsw

Global Inrastructure and Construction Leader

rc Su

Global Real Estate Markets Leader

Globl rl e c

J Zum

U.S. Inrastructure Leader

J Mu

Marketing ManagerGlobl rl e c

ProduCtion stAff

Bs VBus

Creative Director

Jms a. Mu

Managing Editor

lu gssm, pubcs psss llC

Manuscript Editor

C Cm

Senior Director, Publishing Operations

J h ds guBook Design and Production

www.johhlldig.om


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i i i

eh y, h ub Ld Ii d e & Yog

ollbo o m o h o globl i-

. Inrastructure 2012: Spotlight on Leadership i h ixh i

hi i.

I hi y po, w highligh xmpl o i

ldhip, xploig how ix u.s. gio ppohig

i i h w oomy. Inrastructure 2012 lo

xmi ky d ilig i globlly d

viw h miv poj dwy i h pidly b-

izig d dvlopig oi o chi, Idi, d Bzil.

th oi ggd i i ivm o

l hikbl i mo dvlopd oi, b oi-

ig oomi doldm, lbo oi, d bi

hllg pig h bk o chi, Idi, dBzili i piio. I eop, io

gglig o mov owd wih lyi i

ivm i ligh o h globl oomi dow d

h eop iil ii.

I h uid s, h i ig o oomi ovy,

opld wih gowig ogiio o h impo o

i, hv lid h i mood, b m-

blig blok mi. I pil, o o m willig o

hv h hd ovio bo wh dl digo

bih xiig i, o xpd wok,

o bild hiy w ymwill o hold om om. thgood w i h v h pop o lg, w i-

io o dl dig dim, gio hig o i-

ivm o givig p. thy dvlopig

hi ow viio o h d pig dig d

implmio lgly o hi ow.

I m, dvlopd oomi, ildig h uid s

d my oi i eop, h o miv, om-

iv i ivmh kid h hp iol

oomi d div mk o ddmy b ov. I i

pl i o mo -gid i ivm,

o wh giol i ym big bil o

xpdd, wh pdi d biyl wok gig

od, d wh ld i ky oidio. now

mo h v, w ppoh d w kid o ldhip

dd o o i o vl d o mk

l i b. I ll od, b o hInrastructure

2012 gg i il o o .

Cover Letter

pc ps

Chie Executive Ofcer

ub Ld Ii

hw r

Global Real Estate Leader

e & Yog LLP

I i log-m popoiio, b diio bo wh i- o bild d how o py o i big md vy dy. Ld ll lvld iigly,

v odiy iiz wighig pioii, ig o, d gig o how o g om h o

h. I h w globl oomy, hllg bod, b h hoi w mk bo i ody

will vb io h hi i why ldhip i h il p o h i oy.


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V

Contents

introdUCtion /1

Chapter 1: Setting prioritieS /2

Mkig choi / 4

Impovd Oom / 4

Lol Ldhip / 5

G ugy / 6

no Wy d Wokig i co/ 6

rhm rlii / 7

Chapter 2: gloBal Update /8

uid Kigdom / 10

coil eop / 11

chi / 13

Idi / 15

Bzil / 17

cd / 18

Middl e/ 20

ai / 21

Chapter 3: national oUtlook/22

O ti d Po / 24

SideBar|cog d h Whi Ho Ph ahd / 25

SideBar|Wh Do High spd M? / 26

I Vgd / 29

Chapter 4: paying the Way /48

Poliy shi / 49

riig Moy h Lol Wy / 52

Pbli/Piv Phip / 55

Gowig cpil BOh dig so / 57

a Look owd / 59

SpeCial SeCtion|infraStrUCtUre leaderShip in the neW eConoMy /32

Voig o I / 32

Byod h Bllo Box: Ldhip, Iovio, d Phip o I / 35

Mobilizig o h o ti i h rh tigl / 36

Mkig room o Pk i Oklhom ciy / 38

M r: Goig Mlimodl i Lo agl / 40

sig W o h i G chigo / 42

th Pi I righ: Pkig Go High th i s io / 44

uig ti o Bild Bi-s Kowldg coido / 46


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8/70

IntrODuctIOn 1

M oomih uid s, h uid Kigdom,

d io i h eop uio (eu)ggl gi wid-

ig dig gp j mgig-mk oi, pi-

lly Idi d Bzil, iig hdl o m pi-

io o pomoig gowh. ev chi hi pd bmp

qlld pdig p h h hlpd om

i oomy io globl pow.

I h uid s, ighd bdg d dig hl-

lg bgi o o govm oil o hik i-

ppoh, pilly d lol lvl wh h

ldy hvy dig bd i gowig. thy o log

dpd o go hdo om cog mboild i

pi blig ov h dph o dl di dio.

expiv, poilly gm-hgig pl o ig-dgwok lik high-pd il (Hsr) g idlid, l m-

poily. th g o pd moy od o h ll o-

ii bb, pld by o o yig o i b

oom o vy doll llod. sill, h b o

iol poliy o poio d igh i o-

i o hmp u.s. biliy o omp globlly.

th l gloom m poibl lol ld m

gi pioii d o vilbl dig o iil d,

pilly miiig xiig ym. thy m d -

iv wy o d mjo poj o y impovm

o w ym by iig o implmig h od oll o iig x. Mo jidiio mo bllo m-

div o gi oi ppovl o l x hik d

bod i, whih o p wh md bil o

oomi gowh d popy vl.

I mo mopoli , highwy, i, d hoig

dpm oid igd ld olio o d

ogio, d vl im, d impov qliy o li

o h x gio. som jidiio o pool

o o giol poio d w plig h

h gg i iigly ibl bl o dwidlig

dl d. thy liz hy do b by wokig i

o o hiv ommo objiv, h h ompig

o x doll. a do o y dig ig lo o-

o o ill : xdig i h

od, w li, d w mi o ig o lo-

g b jid h xp o hoig p bi

d pl wh poplio d omm ovg.

s d lol govm lo p p o o gg

piv pil d xpi i phip o hlp

mo o-iv poj dig, oio, opio,

d mi. a ly mip, mo

pbli/piv phip (PPP) blig lgilio dh o o oo-d ooim o hiv wok-

bl pom pi h dliv poj o im

d o bdg. Iiio, ildig pio d, high

i i i ivm gowig pool o piv

pil bom vilbl o hlp poply d

govm poj.

alhogh govm my hv g i dig

ii by doig mo wih l, h ovll o h

io i will oi o dio l h

poliil will d dig o mk h dd ivm

miliz. addpi pogh i ill llod i h i wold.

Introduction

aggiv govm bl-ighig d il mk dlvgig iwoldwid i ivm o 2012 d pobbly h x v y. th d o iv h dol-

l h vilbl o poj h hv h g o oomi podiviy, l dmd,

d globl ompiiv poiio h v b mo g. Howv, il iy d poliil -

d i h wy o b i diio mkig.

In Atlanta, trains connect the city and Hartsfeld-Jackson Atlanta

International Airport. (Photo courtesy of MARTA)


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2


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cHaPter 1 / settInG PrIOrItIes 3

o 2012, w lii o ik i, oig hgd mp-io d ppoh o how o dl wih vxig, o-iiv i d.

cod bo lippg i oomi pimy mgig om dp io,

om ld i h uid s lly bgi o wk o h impo o i-

y o ddig.

axio ami woy bo ig popiy d lowly o

mb h oio o pgdig ipilly wh p o poliil

iv o dig olio d ig vl. P oh wy, h uid

s od o o iv i iil i? sppo bild i vo o i-

, pilly lol lvl wh oi oily ppo bllo m-

o i poj h ho p ommii o h x g-

io. nvhl, food o moy wo b did io h i

y im oo i h uid s o ywh l, giv ogoig dlvgig

d od iy.

Oh ioboh m w oomi d mgig mkggl o

dv o hold hi ow i h xmly ompiiv globl pkig od, i p

by dvig i gd. thy ogiz h i qliy i

impo diio i globlly ompiiv mkpl.

I h uid s d bod, i ivm my b ogizd

iv mhim o pimig ilig oomi d poig job, o h i o

pbl o h liv o pmpig pbli moy io h oomi ym i oh

SettingPriorities1

A view o the Los Angeles skyline is ramed by one o its many reeways. (John Foxx/Getty Images)


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In rastructur e 20124

wy. B ld h dilmm o dig h

o o pd wh i qid o i-

o m boh d d.

Making Choicesevybody liz mo govm lk h

y il whwihl o iv d bo-ow o bkloggd i poj. ev

chi pp o dl ov-h-op

pdig. th big qio i wh will ll h

moy om om o dl wih dig gp i

h mp illio o doll woldwid d

l $2 illio i h uid s lo.

o oil d pl, h hllg imply

boil dow o doig mo wih lo-

ig d o il pi, xig poj

h mo oomi gowh, d

okig pig mploym gi. s

d ii m g o how o i mo v-

, i p hogh g li o

d iv x mhim d by kig

h o h vo. PPP hlp wih -

ii, bildig i li yl o oidio,

d ig.

no piigly, il diboh gov-

m idbd d dimiio i pol

wlhhlp o ll o o wh lly m-

o o oil d oomi wll-big.

I o m mo wh vy

doll, o, o y o.

Improved OutcomesIoilly, l oi lly my ompl

om b lgig o wh m

mo, d wh will g h b bg o hbk, bom v mo g. om ld

ppiv, ii o bidizd pwl lly

gi io io y o poiig o

how h i o qio v ddd

p i xdig bb bdiviio owd

xb ig. Wh moy i o igh, i

bom oo dil o ioliz bildig mil

o od d w io mpy ow p.

coi wih iol i gi,

h ali, cd, nw Zld, d h

uid Kigdom, pobbly hv dvg i

plig o limid dig o poj idid

op pioii vig h g good o oomi

gowh d podiviy. th gm-hgig

iiiiv old ild bildig o mlimodl

po ym om gwy ii; likig

gmd igh-il diibio bw popl-

io , mjo po, d iiol ipo;

oig high-pd pg-il li bw

ky mopoli ; o implmig w

gy ym d bodbd hologi.

Ss Us V rvu Sucs tsnumb ss us suc 2011

so: niol co o s Lgil, 2011 Transportation Governance and Finance Report.no: 50 , Dii o colmbi, d Po rio. s vy i hi o h yp o dig.

SaleS taxeS on fUel(16)

fUel taxeS (52)

VehiCle Weight feeS (37)

VehiCle or rental Car SaleS taxeS (29)

traffiC CaMera feeS (23)

regiStration, liCenSe, or title feeS(49)

CongeStion priCing(6)

tollS (29)

general fUndS (36)

intereSt inCoMe(39)

iMpaCt feeS (25)

lottery(5)


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Local Leadershipuoly, h uid s i o o h w

mjo oomi pow lkig iol i-

poliy diio: iiiiv l o

pol om lol d lvl, o om-

pig o o. B i h vio-

m, l, boom-p l-hlp o will

mo likly dig om dl d pi-

v o, pilly wh hy hlp m

lly dd oomi d gi objiv.

alhogh pi bikig i cog h

pvd poliy mk om hig mig-

Elevated rail tracks in downtown Chicago link historic buildings and new construction. (Jeremy

Woodhouse/Getty Images)


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In rastructur e 20126

l o o i dig, d d-

i i i pdig, mo

ld l lk bo piig ig

bidg d plig mblig odbd. a

o ivig hvily o w ym o my

y, h li yl o xiig i

oibly d mo lmigly o o imd o log b igod.

Greater Urgencyalhogh hi pgmi oiio do o

ily l io dig mo d o

i i dlld dl o, my

oil, gi moly d lol lvl,

k iv wy, ildig mo piv -

ig, o dv i pogm, boow-

ig om modl ldy dvlopd d d i

eop, cd, d ali. I pil, pop-

ly d PPP ii d

d o ov h i li yl o ym.

Lol poliii lo how wod bkbo;

hy k h o iig oll, i , d

w dii h h ik h iig

poibiliy o bkdow i xiig ym.

Myb hy di h mo o hi hd-

pd oi will b willig o py i h

m miiig o hig vi d po-

vidig gibl impovm o hi .

aiipd vo i omwh mo mdd l fxivly iil; popl lowly d

igdly bgi o p h pi o wh w

hd om o k o gdil vi

h od, w, d w. riig g

x mi villy popl o mo polii-

i i h wid wh o moly -dpd

bb d l ami, b h oo my

hg o o iy.

No Free Way and Working

in ConcertI h mgig omld wold od,

pobbly will b pyig o yhig w h

g bil hogh om o o o di x.

S Bus fc l tmsBu ss s s fy 2011 u xus

so: c o Bdg d Poliy Pioii.

n oVer 20%

n 1020%

n Under 10%

n UnknoWn or not reported


14/70


wy hv hi dyy w highwy

o ddd xpwy l will lmo ily b

olld. Iig dpd o --oid

modl o py o i old gi divi-

ddhgig bhvio o og g

podiviy by mo dily yig h o opyig o bildig d miiig ym o

hi b. I lo i qio bo h

giv o om o h d h

oil qiy o o mkig ldy ppd

ami py mo o i.

rpoibl govm ld pp mo

omplld o k iv, igd olio

h old liz g bg o hi mg

vilbl bk. ay mo h w o b

ompiiv i h d mlimodl

poio wok, y iviw. Idil im, h mo giv i h ym;

popl i hi wy d o b mo willig

o mk djm, dliv vi dily,

d d b oom.

Retrenchment RealitiesB o o hold kid hmlv: h d

g d h vilbl dig o

o. o , u.s. Hsr pl l, h eu

h o hoi b o dly om oiviy

poj, d chi low dow il d highwybildig.

Wh yo look h ol po o moy ov

h x v y, vyo will b pdig

l, d h m l will g do. th

o l i likly will bom mo vi-

d: phig pohol k log, bwy y-

m i vi bk, d xpd w

li plm g dd. Oil m jg-

gl limid o.

sill, dil im my p omiv dv

, id omig. ad h io mll hg i h i wold.

The Intercounty Connector, which opened in 2011, is a major new toll highway linking Marylands

Washington, D.C., suburbs. The roads tolls are variably priced and payable by remote transponder.

(Photo courtesy of the Intercounty Connector Project)


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8


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CHAPTER 2 / GlobAl UPdATE 9

The ga ecnmic recessin aects inrastructure strategiesacrss cntinents. Nt ny must verwrught gvernments in natins with mature

ecnmies eeverage an impement austerity regimens, ut emerging-market cun-

tries are as scaing ack pans an reassessing what is pssie in chaenging times.

Eurpe, ike the Unite States, strugges t ster nce mern, nw eterirating,

ecaes- systems an retreats rm investing n majr imprvements ater eap-

rgging the Unite States n HSR as we as ther signature transprt prjects. Against

greater staces, Eurzne cuntries attempt t h ast t their cmmitments r

reucing carn emissins an enacting green sustainaiity initiatives.China, Inia, an brazi cntinue t push ahea in uiing rm scratch state--

the-art new systems, making prgress in trying t meet the nees their expaning

ecnmies. Investments in avance netwrks stan in stark cntrast t the Unite

States, ut they as hit nancia hures, an prgress is aecte y crruptin as

we as ureaucratic ineciency. Sti, cuntries that cntinue t invest thrugh this

chaenging ecnmic peri are ikey t gain ga cmpetitive avantage in the

ng term.

Activities an investment y cuntry r regin incue the wing:

n In the Unite Kingm, private nance appraches are uner re at the same time

that sca austerity rces the cuntry t rethink inrastructure pririties.

n As the avaiaiity et capita shrinks rm the regins aiing anking sectr,

Eurpes epete treasuries make new inrastructure prjects k ike a uxury that

might nt e arae right nw.

GlobalUpdate2

Shenzhen, China, has seen rapid economic growth in the past two decades.


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IN RASTRUCTUR E 201210

n Chinas recent istering inrastructure cnstruc-

tin pace tempers in the ace sme high-

pre HSR aiures an a swing ecnmy.

Sti, megaprjects t ea with the cuntrys

massive water chaenges inch rwar.

n Inia wrks har t ui inrastructure t keep

up with its exping ppuatin. It tries tacceerate prjects an attract shre capita,

ut its erts might nt e enugh.

n The upcming 2016 oympics present an ppr-

tunity r brazi t ui new inrastructure, such

as HSR cnnectins, ut prjects hit snags.

n Canaa keeps hacking away at its inrastructure

ecit with an impressive ist transrmative

prjects, maintaining its psitin as a wr

eaer in using PPPs r inrastructure.

Just aut every natin cunts n greater private

nancing t munt uture initiatives an ks r

new uning ts t pay r prjects. Mre arge-

scae puic wrks invve puic/private ventures

as user ees an ts ecme part utimate

uning prescriptins, n matter the cuntry.

United Kingdombuget ssures an austerity measures stress U.K.

inrastructure spening, an reiance n previusy

aue private nance initiatives is upene. big

prjects ike the lnn Crssrai mve rwar,

an the uiut r this years Summer oympicscmpetes n time an uner uget. but the

high-spee ine, HS2, sate t cnnect lnn

with birmingham an eventuay t lees,

Manchester, an cities in Sctan aces strng

citizen prtests an ther chaenges. The eari-

est this prject cu e cmpete is 2026, an

2030 ks mre ikey given the ptentia $50

iin-pus cst an ack existing uningsurces.

At present, ther cnceptua prjects seem

even mre amitiusthey incue the lnn

mayrs prpse new airprt east the city t

take pressure vercrwe Heathrw an a

utiity spine r services uct ang the uture HS2

rute, incuing raan an eectric pwer

ines. It wu e an pprtunity t create e-

ciencies, ut the cuntry may e t pr t

it. Perhaps it can e ne piecemea instea.

Pssiy the mst surprising victim gvern-

ment et-tightening has een the private nance

initiative (PI) prgramne the eariest versins

private nancing, ten he up as a me r

PPPs in ther cuntries. Mst PI prjects invve

scia inrastructureuiing an managing heath

care aciities an schs. They ran their curse,

mst the w-hanging ruit ha een picke,

an the apprach is much harer t appy n

arger, mre cmpex prjects.

Critics cnten PIs stacke the eck in avr

private partners, wh tk avantage tax-

payers ver the curse ng-term peratingagreements an mae ig returns seing assets

Ppulti, GDP Grwt, d Ifti i Selected Cutries

0

300

600

900

1,200

1,500

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Population

Millionsofpeople

5

0

5

10

15

20

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

GDP growth

%fr

omp

reviousyear

5

0

5

10

15

20

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

Inflation

Annual%

Surce: Wr bank.

n ChIna n InDIa n UnITED STaTES n BRaZIL n CanaDa


18/70


n secnary markets. The gvernment sti

emraces private invvement ut seeks new

mes, which secure mre pensin un capita

an prvie greater revenue sharing with the

puic sectr. Prpnents suggest PIs wi e

rerane an regain sme uster. Essentiay,

gvernment cannt withut PIs.

Whie nancing questins take n cus, un-

ing is an even mre serius issue ecause the

gvernment esnt have the mney an n nehas the answer. As ng as Eurpe grpes t

vercme its et crisis an j grwth ags, the

U.K. wi get wrse an the revenue squeeze

cu ast r quite sme time. The gvernment

says it wi spen mre n inrastructure, ut

when yu examine the etais, the mney a-

cate gets sprea ver years t much esser eect

an immeiate impact. ocias wi as k at

seing mre inrastructure assets an cncessins.

on the x-it-rst rnt, essentia highway mainte-

nance prcees, ut in ca areas signs appear cutackspaving repairs may e eaye; pthes

nt get e as ast. The privatize rai inustry

perates satisactriy, ut maintenance csts munt,

raising ares an causing rier cnsternatin.

Continental EuropeVarius gvernments an EU entities put a rave

ace n prspects r cntinuing inrastructure

initiatives ike the cnnectivity TENs (Trans

Eurpean Netwrks) prjects, ut the reaity

aiing ecnmies, wiesprea anking ins-

vency, an munting svereign et suggests

picy wi e a asket case unti sca aairs get

The planned HSR station on Curzon Street in Birmingham, England, will be one o the many stops on

HS2, a high-capacity railway linking London to Birmingham, and eventually to Leeds and Manchester.

(Image courtesy of HS2)

Te Eurpe UisIrstructure

Fudig Prgrs

Program

Euros

(billions)

CONNECTING EU ROPE FACILITY

(20142020)

Energy 9.1

Transprt 21.7

Teecmmunicatins/igita 9.2

Subtotal 40.0

COhESION FUNd FORTRANSPORT (20072013)

10.0

Total 50.0

Surce: Eurpean Cmmissin, 2011.


19/70


srte ut. An that is unikey t happen in

2012. Everything swsspening ess an

smthing cash fws int the uture just as

the recast investment nees r inrastructure

imprvements tta upwar 2 triin eurs

acrss the cntinent ver the next ecae.

Sme servers questin the inrastructure pu-ack as cunterpructive, suggesting puic

wrks investments cu hep stimuate mriun

ecnmies an create js when high unempy-

ment saps eman r gs an services. Un-

utey gvernments wi attempt t make up

puic sectr shrtas y seing mre cncessins

an trying t engage puic pensin uns, insur-

ers, an ther private sectr capita surces t

invest in capita imprvements. EU memers as

appear cmmitte t maintaining their green

agenas, reucing carn emissins an temper-

ing vehice use y rerienting transprtatin sys-

tems an rethinking an use patterns.

A prmising initiative wu have the Eurpean

Cmmissin an Eurpean Investment bank attract

investrs thrugh guarantees n prpse prject

ns r investments that meet cnnectivity jec-

tives incuing transprtatin, energy, raan,

an teecmmunicatins. but these EU-acke

ns wu nt e avaiae unti 2014, i pans

mve ahea. Given the enrmus uning nees,

ptentia private sectr participatin, incuing rm

pensin uns, wi e insucient t pick up a the

sack. Cmprmise aance sheets an pening

nancia rerms rcing eners t increase reserves

pinch traitina eners r inrastructure, particu-ary the arge Eur-pean anks, wh signicanty

reuce their capita utays.

Essentiay, the empty cers an uncertain

recvery scenaris mean mre prjects get sheve

in 2012 waiting r signs staiity. Wrst cases

w Ireans ea, where the Ministry

Transprt suspene cse t 90 ra imprve-

ments ecause uget cutacks. Any new ra

cnstructin in Irean wi epen n ning pri-

vate cmpanies t ui t ras, an the cun-

trys vera 2012 capita uget has een sashe

y 755 miin eurs t 3.9 iin eurs.

Spain has cut gvernment inrastructure aca-

tins y 40 percent ater a ecae-ng ra an

rai spening spree ut cntinues t ui ut its

state--the-art HSR netwrk. Neighring

Prtuga uniateray stppe wrk n the uet-

train ine inking lisn t Mari, hwever, eav-

ing Spain in the urch. The Prtuguese gvern-

The Olympic Park in east London has been transormed by major investments in utilities, roads, bridges,

and transit inrastructure. (Photo courtesy of London 2012)


20/70


ment caime EU-manate austerity et n ther

chice. In Greece, austerity measures rce se-

inrastructure assets.

other gvernments ike Itay psitin t stimu-

ate their ecnmies y preserving inrastructure

prjectsprviing js whie investing in sys-

tems r the uture. but the pressure meeting

eeveraging targets set y EU partners maycmprmise its pans. Mst ther cuntries reuc-

tanty atten wn the hatches.

ChinaChinas recent accmpishments have een stag-

gering46,000 mies expressways, the wrs

mst extensive HSR system, uturistic airprt ter-

minas, ming new prt aciities, extensive

uran suway systems, an massive hyreectric

amsan a uit within the past 20 years.

Estimates suggest a majr stimuus kick rm gv-ernment cers since 2009 amunte t spen-

ing an eye-ppping 15 percent grss mestic

pruct (GdP) n puic wrksreate prjects

(cmpare t ess than 2.5 percent in tta U.S.

expenitures), which hepe cushin eects rm

the ga recessin.

Unquestinay, China has taken ramatic

stries t cataput itse int the psitin

wrs secn-argest ecnmy, creating exten-

sive transprt netwrks t supprt uture grwth

arun uran-ase inustry an inking cities

acrss vast expanses. Intercnnecte systems

mass transit eeing int intercity rai, an wes

uturistic highwayskeep pepe an gs

mving in mushrming metrpitan areas

thrughut the cuntry. The prjects have puttens miins pepe t wrk as the natin

strategicay reinvests an everages its recent

exprt manuacturing gains t ue ever mre

expansin an mve ppuatins ut the

cuntrysie.

but ater much attentin r its mernizing

prwess an seemingy impressive uiing spree,

China an the rest the wr egin t assess

the achievements an eects this unprece-

ente cnstructin in the cntext nging

ga ecnmic turmi. The eary accaim hasgiven way t mre mixe reviews, an the cun-

try shws signs neeing t rein in its vracius

appetite t transrm in the ace pssie sca

atigue.

r starters, China cannt escape the eects

the wr ecnmic swwn, as its key Eur-

pean an Nrth American exprt markets e in

cnsumer et-tightening. White-ht ue-igit

Q1

Q2

Q3

Q4Q1

Q2

Q3

Q42012

(forecast)

2010

201112.1

11.2

10.7

10.4

9.7

9.6

9.4

9.2

8.4

Grss Destic Prduct Grwt i Ci Is SlwigQurterl percetge cge r previus er

Surce: China Natina bureau Statistics.


21/70


grwth in GdP tempers in the ace a maturing

ecnmy, internatina ecnmic rums, an

new erts t put the rakes n puic spen-

ing. China wi have t ea with its wn massive

etestimate etween $1.5 triin an $2.2

triinaccumuate rm prigius interna

rrwing t inance the inrastructure anuiing rush.

Chinas new rai an ra systems have

hepe cnnect vast expanses an it miins

ut pverty, ut the pace an extent cn-

structin have rught chaenges. Water an

energy remain pressing issues n the cuntrys

inrastructure pririty ist.

RaiUnti a Juy 2011 uet-train cisin kie 40

passengers, mst the new HSR prjects ha

earne high marks r state--the-art eciency

an spees rutiney reaching 200 mies per

hur. The accient e t questins aut cn-

structin quaity an raiway saety, then wrk

was suspene n 6,000 mies rai prjects

acrss the cuntry ecause wiey puicize

un shrtages. Severa high-eve raiway execu-

tives were sacke r crruptin an manage-

ment missteps ater $30 miin in misapprpria-

tins was uncvere n the beijing t Shanghai

HSR ine ane. Many trains run ha empty, nt

ny ecause ears uture accients, ut as

ecause mst Chinese cannt ar the expen-

sive ares. Aing t unease aut rai trave, athir signa aiure in three mnths n a new

Shanghai suway ine precipitate a train crash

that injure amst 300 passengers. Ater a reas-

sessment an new picies t restrain spening,

the 2012 rai uget has een sashe 42 percent.

Rasbuget cnstraints as reprtey cause wrk

stppages n ra cnstructin acrss the cun-

try in the a 2011. Eary ast year, the Ministry

Transprt annunce that wrk n 12 majr

natina highways, neary the ength the U.S.

interstate system, ha een nishe 13 years

ahea scheue. The remaining 6,000 mies

ras are panne r cmpetin y 2020, a sti

manageae target.

despite a the expressway cnstructin, trac

cngestin munts in an arun the argest cit-

iesast summer, beijing gricke r ays in

an epic 60-mie jaman a the new ras pr-

mte mre riving, heping rive smg t an-

gerus eves in sme uran centers. With

apprximatey 5 miin icense cars n its ras,beijing cias wi imit new icense pates t

240,000 cars annuay. The Transprt Ministry

has as temprariy eiminate r reuce ts

n sme highways ater a trrent citizen cm-

paints aut the cst.

WaterTw-thirs Chinas cities ack sucient water,

an tap water in mst parts the cuntry

remains nnptae. With 20 percent the

wrs ppuatin, China has ny aut 7 per-cent the wrs reshwater resurces, cncen-

trate in its suthern prvinces, an mst its

rivers, akes, an aquiers are pute. The push

t rev up the natins ecnmy thrugh hyr-

pwer an ca-re eectricity cnsumes aut

40 percent the cuntrys water, an recent

extene rughts have exacerate shrtages

in sme regins.

Ci Is nw te WrldsBiggest User Eerg,

but U.S. Per CpitCsupti Dwrs Cis

Eerg csupti i Ci

d te Uited Sttes

N

ationalenergyuse(millionsoftoe)

1990 20092000

0

500

1,000

1,500

2,000

2,500

Percapitaenergyuse(toe)

9

8

7

6

5

4

3

2

1

0

n UnITED STaTES n ChIna

Per cpit Per cpit

Surces: Internatina Energy Agency; The Guardian,August 2010.

Ntes: te = tns i equivaent. Preiminary ata r 2009.


22/70


The cuntrys mst high-pre inrastructure

prject, the $23 iin Three Grges dam, cn-

tinues t e mire in cntrversy, which nwcuses n its inaiity t cntr fs as we as

gegica an ecgica premsestructive

agae ms an cracks in surruning cuntry-

sie. Pepe in scres cities an twns were

recate t make way r the am prject, which

has therwise met its hyreectric gas.

ity years in the panning, an amitius Suth

Nrth Water diversin Prject t shit precius

water suppies rm the suth t high-ppuatin

inustria areas in the nrtheast suering rm

encraching eserticatin is prceeing. Themin-gging $62 iin prject wi rechanne

water rm majr rivers in three articia ines,

ispacing hunres thusans pepe in its

wake. Envirnmenta cnsequences may nt

materiaize unti ater the wrk is we unerway

r cmpete, an reucing an iverting triins

gans water rm natura river asins raises

serius cncerns. oservers wner whether

emphasizing cnservatin an iscuraging ur-ther ppuatin an inustria grwth in mre

ari znes is a etter strategy.

Indiarm new prts an airprts t suways, reight

rai, pwer generatin, an te highways,

Inia attempts t mernize, accessing private

capita t urther amitius an necessary gas.

Amng heaine prjects unerway are a $2.5

iin expansin the Mumai suways, cn-

structin a $3.6 iin Hyeraa Metr Raisystem, a $500 miin highway upgrae

etween Jammu an Uhampur, an a $173

miin t-ra expansin rm Ahmeaa t

Ghra. Six new eicate reight-rai crrirs

are as uner cnstructin with a phase 1 cst

$10 iin.

Chinas massive Three Gorges Dam has met energy goals, but environmental concerns remain.


23/70


despite evting 8 percent GdP t these an

many ther esperatey neee inrastructure

imprvements, Inia suers rm a massive an

wiening suppy/eman gap with a t catch-

ing up t , an its amitins t riva neighr-

ing China shw signs stuming in a maestrm

et, sturn infatin, an the ga ankingcrisis. during 2011, grwth in manuacturing, cn-

structin, an agricuture rppe ramaticay

rm eves in the heay w teens t mi singe

igits, sti respectae eves that nnetheess signa

increasing ecnmic stress that cu impinge n

near-term inrastructure investment.

Even s, the gvernment prmtes a $1 triin

natina inrastructure pan cvering 2012 t

2017, ue the $500 iin ga the past ve

years, which misse its spening target y aut

$100 iin. The prpse ve-year pan cas r

majr utays acrss the inrastructure spectrum

with cncentratins in pwer, ras, rais, an

teecmmunicatins.

Ppuatin PressuresPpuatin grwth, meanwhie, avances

unchecke: Inia wi vaut ahea China y

2025 t rank as the wrs mst ppuus

natin. An the cuntrys uranizatin hurtes

rwar. Areay vercrwe citiesincuing

New dehi, Mumai, an bangarehave ae90 miin pepe since 2001, with an anther

200 miin uran weers expecte y 2030.

Spees average just 20 mies per hur n pt-

he highways as the numer cars has muti-

pie nine times since 1990; 50 percent the

natins 4 miin mies ras remain unpave.

New airprt terminas cannt keep up with jet

trac, which has quarupe in the past ur

years, an pepe pack int suway ines n

pening, verwheming systems. Pwer utages

remain aiy ccurrences in mst the cuntry,

hampering manuacturing an service inustries,

which must rey n ackup generatrs, whie

water suppies remain untreate an unrinkae

Indias large population creates pressures or inrastructure.


24/70


in mst paces. Recent annua reight trac grws

at a 10 percent annua cip, precipitating the

urgent nee r the new rai ines. Estimates sug-

gest that upwar 40 percent the cuntrys

ruit an vegetae pructin never reaches

markets ecause inrastructure-cmprmise

suppy chains.

Private Capita an lar Chaengesocias k t the private sectr, ut prspects

appear im in the shrt term, given a chaenge

mestic anking system an near paraysis inEurpean nancia centers. Sti, Inia eas the

emerging bRIC (brazi, Russia, Inia, China) cun-

tries in attempts t attract private investment t

its inrastructure sectrs. In 2010 ane, the cun-

try entere int $75 iin inrastructure-

reate PPPs. Athugh reign investrs an

peratrs have mae mney, the market can e

icut t navigate; even mestic payers cm-

pain aut aie picy ramewrks an ureau-

cratic racks. Recent kickack scanas in

seing raan icenses reinrce investrperceptins aut crruptin an icuty in

navigating cnvute state ureaucracies.

lack skie ar presents anther sustan-

tia hure. Inia nees mre civi engineers, pan-

ners, an architects t manage a its necessary

cnstructin prjects an aces the aunting task

training miins unskie cnstructin

arers t wrk ecienty n prjects.

A Race against TimeEssentiay, Inia ns itse in a race against time,

cping with the exigencies its exping an

msty impverishe ppuatin whie trying t

rermuate as a 21st-century ecnmic pwer. by

sme estimates the cuntrys grwth rate cu

e 2 percent higher with imprve inrastructure.

BrazilSuth Americas emerging market superstar,

brazi strugges t make ng-negecte inrastruc-

ture imprvements, many sate r wecminghunres thusans shre visitrs t the

2014 Wr Cup an 2016 oympics. Reative t

ten years ag, the cuntry has a t ging n an

its ecnmy wi cntinue t grw aster than

mst, ut recent stck market rps an a weak-

ene currency wi sw activity. In aitin, cr-

ruptin an avritism create an uneven paying

e, an re tape cmpicates the prcurement

prcess r majr prjects.

High-Spee-Rai SetackPray the mst iscncerting setack invvesthe cuntrys highest-pre transprtatin ven-

ture, a prpse $19 iin high-spee raiway

inking brazis tw mst imprtant citiesRi

e Janeir an S Pau. The Natina lan

Transprt Agency has strugge t attract experi-

ence reign investrs an peratrs int puic/

private cnsrtiums with braziian cntractrs t

Ci d Idi are Rpidl Urbizig

n ChIna n InDIa n UnITED STaTES n BRaZIL n CanaDa

0

100

200

300

400

500

600

700

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Number of urban dwellers, 19802010

Millionsofpeople

0

20

40

60

80

100

Percentoftotalpopulation

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

Urban population (% of total), 19802010

Surce: Wr bank.


25/70


ui the technicay chaenging 300-mie high-

spee ine etween its tw gateways as we as

cnnecting t Campinas. Tp-tier internatina

cncessinaires, experience in uiing uet-

train systems in Eurpe an Asia, ake at taking

n sustantia prject risks r cst verruns

r what they viewe as insucient revenue

guarantees rm the gvernment. deays in set-

ting n the cntractr grup have imperie

hpes uiing HSR service etween the cities

in time r the Summer Games in Ri.

Getting Reay r the WrTens iins ars, meanwhie, pur int

eveping sprts aciities an regina transpr-

tatin inks t hst the Wr Cup, taking pace

in 12 braziian cities, as we as the w-n

oympics. The ugete price tag r a the

imprvements ttas mre than $50 iin.

Prjects incue suway extensins, us rapi-

transit (bRT) rutes, new highways, prt

upgraes, an airprt expansins. A wi eneee t mve athetes an thrngs sprts-

ma turists.

The gvernment has egun cearing avea

shantytwns in the path new rutes t sprts

venues an upgrae hte istricts. Cnstructin

a $450 miin six-ane bRT rute wi require

recating 3,000 amiies rm Ris nrthern su-

urs ane, an sme estimates inicate hunres

thusans pepe may e uprte t make

way r ther prjects.

Athugh the oympics prvies a wecme spur

t aress brazis ngstaning inrastructure e-cits, r panners the verriing cncerns cus n

whether the gvernment can muster enugh

mney, expertise, an skie manpwer t cm-

pete a the wrk n scheue withut cmprmis-

ing quaity, a aunting task at the est times.

Canadalike the Unite States, the Canaian gvernment

une an uit mst its transprtatin an

water inrastructure in the pstWr War II

years, taiing expenitures an uneruning

prjects uring the 1980s an 1990s. Hwever,

ver the past ecae, Canaa has mae inra-

structure investment a natina pririty. As a

resut, the natins current inrastructure ecit

estimate ranges etween C$50 iin an C$125

iin, a mest amunt cmpare t its suth-

-the-rer neighr.

The gvernments stae sca cnitin; rich

stres energy, cmmity, an water resurces;

an a heathy an heaviy reguate nance sectr

Buildig Cd Fudig,20072014

Program

Canaian

ollars

(billions)

Municipa gs an servicestax reate

5.8

Gas Tax un 11.8

buiing Canaa un 8.8

Puic Private Partnerships(P3 Canaa) un

1.25

Gateways an brer Crssings un 2.1

Asia-Pacic Gateway anCrrir Initiative

1.0

Prvincia-territria ase uning 2.275

Total 33

Surce: organisatin r Ecnmic C-peratin andevepment, 2011.

A wide road cuts down the center o So Paulo, Brazil. The city suers rom chronic congestion caused by

the convergence o several main state and ederal highways. (Superstudio/Getty Images)


26/70


have cmine t uer the natins ecnmy

against the wrst eects the ga creit crisis,

which has enae the cuntry t make steay

inras in upgraing aciities an inrastructure

netwrks. In aitin, prvincia an municipa

gvernments have een successu at using PPP

prcurement t ui an perate a wie range ecnmic an scia inrastructure prjects.

Majr PrjectsNevertheess, ga ecnmic turmi prmises

t unsette utks r sme gvernment initia-

tives uring 2012. The spening emphasis shits

away rm uiing scia inrastructure t cn-

centrating n ra an transit prjects t stem

increasing cngestin arun majr cities such as

Trnt, Mntrea, an Vancuver. Amng the

iggest prjects unerway r n the rawing

ars are the wing:

nChamPLaIn BRIDGE, monTREaL: The C$5

iin repacement the Champain brige in

Mntrea is sate as a PPP prject une y

t revenues. one the natins usiest crss-

ings, haning an estimate 60 miin vehice

trips annuay, the rige is rapiy eterirat-

ing rm sat crrsin t its stee eams.

nPoRT mann BRIDGE, VanCoUVER: The

C$3.3 iin Prt Mann brige Prject acrss

the raser River in Vancuver is scheue r

cmpetin y year en, uit y a private

peratr an utimatey une thrugh ts.

Ten anes acrss, the rige wi e the wiest

in Nrth America, carrying an estimate130,000 cars aiy.

n TRanSIT, VanCoUVER: The nging expan-

sin Vancuvers C$2 iin transit system

nw inks wntwn t the airprt an cn-

tinuay excees riership prjectins. Wrk wi

egin in 2012 n an eight-mie extensin, the

Evergreen line, estimate t cst C$1.2 iin

an une party y higher ca gasine

taxes. The existing 12-mie netwrk, pene

r the 2010 oympics, was cnstructe with

C$720 miin in capita rm a private cnsr-

tium that perates the service thrugh a

35-year ranchise.

n hIGhWay 407, ToRonTo: A panne exten-

sin Highway 407 east Trnt wi e

une using an aternative nancing an pr-

curement meth where the prvince wns the

ra an a private cnsrtium nances an car-

ries ut cnstructin. At 65 mies, the existing

Replacing the old arch bridge, scheduled or demolition, the new Port Mann Bridge in Vancouver, Canada, un-

der construction, eatures a cable-stayed span. When completed, the new bridge will carry ten lanes o trafc.


27/70


Highway 407 is tute as the wrs rst

arrier-ree t ra, manage y a private

peratr an wne y pensin un partners

n a 99-year ease entere int in 1999.

nTRanSIT, ToRonTo: Trnt, meanwhie,

grappes with hw t expan its mass transit

netwrk an invve private partnersthemayr supprts a singe C$8.2 iin crss-

twn suway ine, ptentiay the cuntrys

argest inrastructure prject, whereas ther

cias have avre a mre extensive an ess

expensive ave-grun ight-rai aternative.

The Keystne pipeine prject wu expan

reight rai an pipeine cnnectins rm western

Canaas Aerta i sans es t Pacic prts

in british Cumia, aciitating grwing cmm-

ity exprts t China an ther Asian natins an

iversiying away rm U.S. markets. The prject,

estine t crss the U.S. rer, has een

cke at east temprariy y the oama

Aministratin.

A PPP leaerSpurre y the eera gvernments C$1.25

iin P3 Canaa un, municipaities an prt

agencies engage PPPs r mre mest, ca

imprvement prjects ranging rm new sewers

an water mains t renewae energy an turism-

reate puic wrks.The eera PPP ert uis a C$33 i-

in, seven-year buiing Canaa initiative,

enacte in 2006, which suppements prvincia

uning r majr prjects an encurages mre

PPP engagements. but icias wner i ec-

nmic restraints cause y the ga wnturn

might shrt-circuit a secn run buiing

Canaa uning.

Even with reuce eera inusins, e y

ontari an british Cumia, prvinces have

estaishe an empwere inrastructure agen-cies t take the ea n ientiying an securing

nancing r imprtant prjects an engaging in

PPP prcurement. Its the prvinces that rive

the prcess.

Reativey strng ank aance sheets an aun-

ant puic pensin un capita prvie sun

mestic uning capacity t hep unerwrite inra-

structure investments ver the shrt an ng terms.

Given expecte scenaris, the inrastructure uning

prcess an grwth in PPP initiatives shu keep

umping ang at a cnsistent pace.

Middle Eastr inrastructure cntractrs an ea makers,

the Mie East remains a right ight espitethe uncertainty Ara Spring turmi, cha-

enges in Iran, an the aways simmering Israei-

Paestinian cnict. Attentin cntinues t cus

n the reativey stae cuntries at ga crss-

ras ang the Araian Sea an Persian Gu,

incuing the Unite Ara Emirates (UAE),

Qatar, an Saui Araia. Mst these gvern-

ments have mney ecause the rest the

wr, thugh eiitate, sti uys penty i

an natura gas rm the regin.

Neary a the Gu States nee mre trans-

prtatin inrastructure, ut even these cuntries

scae ack sme pans given the mre ser

wr ecnmic utk. Attentin cncentrates

n prts, airprts, an rai netwrks, as we as

uran mass transit.

n Six Gu cuntriesthe UAE, bahrain, oman,

Qatar, Saui Araia, an Kuwaitegin t

impement pans r a jint raiway prject t

ster crss-rer reight an passenger

mvement, incuing HSR inks. Each state in

the Gu Cperatin Cunci wu cntriute

part the prjects massive $100 iin cst

in its territry. The rst ines are scheue t

egin in 2012 an 2013 in Saui Araia an

the UAE, respectivey.

n Ater a near metwn in creit hammere its

uing nancia market an e t a aiut

rm Au dhai, duai stakes its uture as a

istriutin an traing center, cncentrating

n urther expaning its prt an airprts, an

everaging reatinships with Inia an China.

As sme uster ims rm its veruit skyine,

the city-state shwcases a tw-year- metrtransit prject, which nw carries mre than

100,000 passengers aiy, ut cias have

suspene pans r a 30-mie $2.7 iin rai

ine t cnnect its tw airprts.

n Qatar gears up r the 2022 IA Wr Cup,

panning tens iins ars in prjects

expaning an upgraing its primary prt an


28/70


internatina airprt, uiing a new metr tran-

sit system in dha t ink t the airprt, as we

as cnstructing new expressways an causeways

in aitin t erecting 12 air-cnitine t-

a staiums.

n Saui Araia cntinues the uiut a ng-

panne metr in Mecca an HSR ines

etween Mecca an hy sites in Meina an

Jeah. designe t hep take mre than

30,000 cars regina ras uring reigius

pigrimages, the $1.8 iin rst phase the

metr pene in 2010 ang an 11-mie rutewith severa extensins in panning. Ater a

series hups, wrk is expecte t egin in

2012 n the $10 iin uet -train system,

which wi eventuay cver 280 mies, aware

in a esign-ui-perate partnership t a

Spanish-e cnsrtium. The train netwrk, part

the Sauis cntriutin t the regina rai

system, wi hep transprt the mre than 2.5

miin visitrs wh cnverge n the cuntry

uring annua reigius hiays.

AfricaSeeking t vercme inrastructure ecits an

set the stage r uture grwth, cuntries in

Arica are investing aggressivey in inrastructure.

buye y turism, recent grwth, an invest-

ment rm China, su-Saharan cuntries are

spening neary 8 percent their GdP n ras,

pwer, aviatin, teecmmunicatins, an ther

sectrs. Sti, even thugh $45 iin is ging t

Arican inrastructure, prjecte nees are ue

that r the next ten years. Key inrastructure

issues wrth watching are the wing:

n Suth Aricas new $127 iin (1 triin

ran) inrastructure investment pan, annunce

in eruary 2012, attempts t mernize the

cuntrys ras, raiways, prts, pwer pants,

airprts, an husing. Hw t pay r an

manage such an amitius set prjects wi

e the chaenge.

n In liya, pans t upgrae rairas an uti-

ities may have a chance t get ack n track,

epening n the viaiity any pst-Qaa

gvernment.

n Megri, the trans-Meiterranean pwer prj-

ect, hit the pause me uring the Ara

Spring turmi. The amitius $7 iin prject

wu harness sar-win energy in Nrth

Arican eserts t meet 15 percent Eurpes

eectricity eman y 2050. but sar panes

an transmissin ines wu e cate in

liya, Egypt, Tunisia, an Syriacuntries in

varius stages pitica unrest.

The West Bay central fnancial distr icts skyline marks the development o a new neighborhood in Doha,

Qatar. (Gavin Hellier/Getty Images)


29/70

22


30/70

CHAPTER 3 / NATioNAl ouTlook 23

is t grace nder pressre, smpy havng n ther chce, r maybe acmbnatn the tw?

Dre sca cndtns shw ew sgns ameratng qcy, bt atttdes n the

unted Statesat east at the state and ca evesbegn t sht tward strateges r

deang wth the natns nrastrctre needs. Federa rectance rces gvernrs,

mayrs, state egsatrs, and thers t be creatve n addressng metrptan cnges-

tn, speedng reght mvement, and preparng r ppatn grwth.

A sharpy dvded Cngress mpers any hpe creatng a natna cnsenss at the

edera eve abt hw t reverse chrnc nderndng, address deayed mante-nance, r mve rward wth prrtes. Athgh nrastrctre cgnscent and pract-

tners mght wsh r a natna pcy r cnstrctvey prrtzng nrastrctre prj-

ects, acatng ndng, and ntegratng systems, they are grng t hw t mae

thngs wr wtht t. The pbc begns t reaze that t mst ether pny p mre n

ca taxes and ees r rg the nd tre-csed nrastrctre nvestments that

w hep secre a hgher qaty e.

N ne reay expects the gap between nds and needs t d anythng bt grw

arger; hwever, a new pcy drectn, nrtred by necessty, s emergng. Sbered

ca cas and panners recs, baggng we-s-me sentment r cncretey gr-

ng t what we can d nder the crcmstances. These mre reste ca eaders

strve r ncrementa prgress and t stretch mted resrces and seze pprt-

ntes t mae mre t ess.

National

Outlook3

This street-level rendering shows the 800,000-square-oot World Trade Center Transportation Hub,

which, when complete, will accommodate 250,000 pedestrians per day. (Santiago Calatrava/Silverstein

Properties)


31/70

iNF RASTRuCTuR E 201224

That strategy transates nt reyng n se-

hep regmens, whch attempt t get mre e

t exstng nrastrctre, t ee the mst t

every dar spent, and t thn carey abt

where avaabe dars g. Ppar spprt grws

r regna stns that prmte vera ec-

nmc prdctvty rather than destrctve tax-

base warare aganst neghbrng cntes and

ctes. Breang dwn agency was and seeng

mre ecent ntermda stns are as part

the prcess. i we d thngs betternvest n

the rght prjects whch can bst ecnmc pr-dctvtyt cd eectvey ncrease the byng

pwer every dar we have.

Of Trains and Portslng-awated edera srace transprtatn re-

athrzatn mves n ts and starts n Cngress,

where prgress s hampered by sharp partsan

dvdesat east n the Hseand the ptcay

trcy qestn hw t pay r crrent spendng

eves, mch ess rase them. The Hghway Trst

Fnd sdes tward nsvency, bt any ng-term

stns may need t wat nt the 2012 eectns

are n the cntrys rear-vew mrrr. Fwng s a

at the twstng stry Amercan HSR and

ramped-p erts t get a share new trade

rm an expanded Panama Cana.

Hgh-Speed Ras TrbedAmercan JrneyWhen the tran appeared ready t eave the sta-

tn n 2009, a grand vsn r u.S. HSR, pre-

sented by the obama Admnstratn, depcted an

tra-mdern netwr r passenger transprta-

tn, eventay stretchng thrgh every regn

HSR Corridor Investment ComparisonCrrr Leth Precte cst Precte cst per mle

Carna HSR Netwr(SacramentSan Francscls AngeesSan Deg)

800 mes $43 bn (prevs estmate);

$98 bn (crrent estmate,adjsted dars)

$54 mn (prevs estmate);

$123 mn (crrent estmate,adjsted r nfatn)

Nrtheast Crrdr (BstnNew YrWashngtn, D.C.)

457 mes $117 bn (2010 dars) $256 mn (2010 dars)

Srces: Carna Hgh-Speed Ra Athrty; Amtra.

The planned Anaheim Regional Transportation Intermodal Center would serve as a hub or several transit

modes, including HSR. (Rendering courtesy o the Caliornia High-Speed Rail Authority)


32/70


FEDERAL UPDATE

As this report went into production, ederal action on inrastruc-

ture started picking up speed.A $63.6 billion unding bill or the Federal Aviation Adminis-

tration nally crossed the nish line into law February 14, 2012,

ater a marathon 23 short-term extensions dating back to 2007

and a two-week partial shutdown over the summer that cost

the ederal government $30 million a day in lost revenue. With

the stability o spending authorization that runs through 2015,

the Federal Aviation Administration can now ocus its attention

on long-term projects such as upgrading to the Next Genera-

tion Air Transportation System. The new law also boosts public/

private partnerships by doubling the number o participant slots

rom ve to ten in the Airport Privatization Pilot Program.

New surace-transportation legislation also got o the starting

blocks. At rst the House bill, known as HR 7, had all the momen-

tum, but the Senate used the strength o bipartisanship to surge

ahead. On March 14, 22 Republicans joined the Democrats to pass

the Moving Ahead or Progress in the 21st Century Act, or MAP-

21, on a 7422 vote. With the current law about to expire, sena-

tors pressured the House to pass the Senate bill, but instead all

agreed to another short-term extensionthe ninth since 2009

until the end o June.

With no stomach or raising taxes on motor uels, both the

House and Senate proposed bills that do little to address grow-

ing inrastructure backlogs, but gained attentionand outcriesand applauseor their divergent approaches to policy. The

Senates MAP-21 proposes a two-year, $109 billion spending

authorization; the short time rame refects the painul act that

even existing spending levels are quickly draining the Highway

Trust Fund. MAP-21 also consolidates programs, streamlines proj-

ect delivery, and adopts national transportation objectives and

perormance measures or investment in highways, transit, and

reight. As part o its emphasis on improved accessibility, MAP-

21 includes measures targeting resources to transit-oriented

development and pedestrian and bicycle inrastructure.

Although House Republican leaders attempted to respect thetradition o a longer spending authorization with their ve-year,

$260 billion bill, as o this writing, they are still struggling with

how to pay or it. House leaders stumbled badly with their rst

proposalgiving to highways the 2.86 cents o the ederal gas

tax dedicated to public transportationwhich caused Repub-

licans rom transit-rich metropolitan areas to balk.

Undermining transit proved politically risky, ollowing on the

heels o a year when transit ridership rose 2.2 percent, nearly

recouping its 2008 record ridership levels, while vehicle-miles

traveled ell 1.2 percent, and the public was increasingly ner-vous about rising gas prices.

The Senate and the House are sending mixed messages on

private investment and public/private partnerships. MAP-21 and

HR 7 dramatically expand the Transportation Inrastructure Finance

and Innovation Act (TIFIA) loan and loan guarantee program. The

Senate bill, however, also includes measures that provide disincen-

tives or some types o PPPs, and some House leaders object to

expanding tolling except in the case o new capacity.

In the midst o the congressional debate, the White House

released its own proposal or a six-year, $476 billion surace-

transportation authorization. In a move widely seen as an

election-year statement, the administrations scal year 2013

budget also calls or improving perormance through competi-

tive grants and continues to promote high-speed rail. President

Obama proposes to pay or this signicant increase in invest-

ment through a peace dividend rom drawing down overseas

military operations.

The Obama Administration did not shower the same love on

ederal programs or water and wastewater inrastructure: the

budget calls or a 15 percent cut in the two main loan unds.

Recent House and Senate hearings echoed the need to spur

private investment and learn rom TIFIA, even including pro-

posals or a new Water Inrastructure Finance InnovationAuthority, or WIFIA, program.

Cngress and theWhte Hse Psh Ahead Srh Jo Peterson

$195.7

Billion

$258.5

Billion

RECEIPTSA

ND

INTEREST

OBLIGATION

LIMITS

Transportation Spending IsOutstripping Revenues

Projected Highway Trust Fund receipts and interest

compared with obligation limits, 20132017

Srce: Cngressna Bdget oce, 2012.


33/70


the cntry. HSRthat s, see ntercty trans

traveng at pward 200 mes an hrwd

be the marqee prject r brngng Amercan

transprtatn nrastrctre nt the 21st centry,

an t cnstrctng the pstWrd War ii nter-

state system. These bet trans cd hep aev-

ate cngestn ang the natns ar crrdrsand metrptan hghways whe creatng hn-

dreds thsands cnstrctn jbs at a tme

stbbrny hgh nempyment.

Bt the vsn qcy trned nt mre a

mrage. Ater a sprt stms ndng, HSR

nw detrs nt a sde ra, apparenty headed

nwhere ast. Even prpnents swaw hard n

assessng the expensebth capta and perat-

ngr the tw mst avred rtes n Carna

and n the nrtheast, where maret demand s

mst ey t trans and cmpete aganst ar-

panes and cars r speed and cnvenence.

in Carna, the pan r hgh-speed ra s

revsed ater prtests and wanng pbc spprt

prmpted rethnng ts $98 bn prce tag

(neary dbe earer estmates) and ts cncen-

tratn eary nvestment n the reatveynderppated Centra Vaey. The new pan

trms csts t $68 bn and cmbnes hgh-

speed ra mprvements wth pgrades t cm-

mter ra n the ls Angees and San Francsc

metr regns, strvng r greater cst ecency

whe prvdng earer benets t Carnas

cngested ppatn centers. The new pan st

depends n ndng rm edera, state, and pr-

vate srces, bt nw prmses greater attrac-

tveness t prvate nvestrs. Each segment s

What Des Hgh Speed Mean?The U.S. Department o Transportation deneshigh-speed rail as a passenger-rail service that operates anywhere

rom 90 to 150 miles per hour (mph).HSR is categorized in three ways:

1. Epress HSRis a requent service between population centers

that are 200600 miles apart, reaching top speeds o 150 mph

on dedicated track.

2. Rel HSRserves centers 100500 miles apart with top

speeds o 110150 mph and some shared track.

3. Emer HSRserves developing corridors that are 100500

miles apart with trains that reach 90110 mph on primarily

shared track.Since President Obama announced his vision to provide 80 per-

cent o Americans access to HSR within the next 25 years, the U.S.

Department o Transportation has solicited applications or more

than $10 billion in grant unding through the 2009 American

Recovery and Reinvestment Act and annual appropriations or s-

cal years 2009 and 2010.

High-speed Intercity Express (ICE) trains link cities in Germany and neighboring countries.


34/70


prjected t generate revene that exceeds

peratng csts.

The prject wdey tted r the Bstn t

Washngtn, D.C., crrdr cd speed p ppar

and ten paced Acea Express trans nw perat-

ng at an average abt 80 mes per hr. Bt

the crrent prce tag r nrtheast HSR s estmated

at $120 bn. in addtn, ntangng jrsdctna

dsptes and cearng a dedcated rte r hgh-

speed tracs seems dantng n the natns mst

densey ppated megaps. Expandng reghttran reqrements aready cmpete r precs

crrdr space wth passenger trans.

Game on: G and East Cast PrtsVe r TradeThe cntrys prmary prts ang the West

Castls Angeeslng Beach, San Francsc

oaand, and Seatte-Tacmaaready stran wth

cngestn rm armadas cntaner shps

fadng Asan mprts, and sme recasts pre-

dct trans-Pacc trac cd trpe by 2025. Atthe same tme, trans-Atantc reght cd dbe

ver the next 15 years, and deep-hed, sper-

pst-Panamax cntaner shps w be abe t pass

thrgh a wdened Panama Cana channe nt

the Atantc by year-end 2014.

The stars a seem t agn r the natns G

and East Cast prts t tae advantage a srge

n new bsness as we as r a reagnment

nand dstrbtn hbs t speed reght dever-

es t end sers acrss mch the cntry.

Wnners n ths cntest cd transrm ther ca

ecnmes wth nsns new jbs and trb-

charge tax bases.

Theres jst ne prbemny ne these

harbrs s wde and deep engh t accmm-

date the megatn shps sated t cme thrgh

the cana. That prt s Nr, Vrgna. Nw,

ther ctes and states ang the Eastern Seabardand G are dredgng channes, bdng term-

nas, and nng fadng actes t rarads,

nterstates, r rver systems t mve gds

qcy t nand cnvergence hbs.

Fr 2012, the expensve cmpettn r a share

the new prt trac prceeds:

n Charestn, Sth Carna, and Savannah,

Gerga, prpse arge-scae dredgng and term-

na prjects, each bdgeted at mre than $1.3

bn. Ether prt can cnnect nt Atantas rea-

tvey cse ar, ra, and nterstate cnvergence

hb, whch w benet rm agmented reght

dstrbtn crsng thrgh ts cnnectns.

n Mam, Frda, nears cmpetn a new prt

tnne, bt thrgh a $1 bn PPP avaabty

cntract, and the state and edera gvernments

cmmt $150 mn r harbr dredgng.

Annualtons(millions)

600

500

400

300

200

100

0

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

PROJECTED START OF EXPANDED OPERATIONS

MAXIMUM SUSTAINABLE CAPACITY

ACTUAL OR PROJECTED DEMAND

Srce: Panama Cana Athrty, 2006.

Expansion Project Will Double the Panama Canals CapacityMaximum sustainable capacity o the Panama Canal with the third set

o locks and actual or projected demand


35/70


n The Prt Athrty New Yr and New Jersey

acated $1.6 bn t dredge a harbr

entrance t ts termna, aready the bggest n

the East Cast, ater reazng that the heght

the Baynne Brdge wd need t be rased r

an addtna $1 bn t aw bg shps t

pass nder t.

n Ang the G, Hstn, Texas, prpses anew seven-berth cntaner-shp termna n

Pecan isand (near Gavestn) and bdgets

$1.7 bn r vars expansns and

pgrades. T the east, Mbe, Aabama, as

bds a $500 mn termna as we as

mprves raway and nterstate cnnectns.

n lsana gets n the hnt t, even thgh

shaw sectns the Msssspp Rver prevent

arge cntaner shps rm navgatng the 100

mes prver t the vast New oreans prt that

cnnects t a seven the natns raradreght carrers. The state cntempates bdng

a transer statn near the mth the

Msssspp where sper-pst-Panamax shps

cd fad carg nt rver vesses that trave

n t New oreans and pnts rther nrth.

The changng shppng andscape ers myrad

ther gstcs stns and cmpettve aterna-

tves. The sectr certany w be rpe r PPPs

between prt agences, rarads, and trcers t

create mprved nand dstrbtn centers t

spprt estabshed West Cast prts as we as

the mst cmpettve Atantc and G Cast

marets. The tre w be nng everythng

tgether and mxng n PPP strctres t hep

nance and perate actes.Prpery pstned nand rarad prtssch

as thse n Harrsbrg, Pennsyvana; Atanta,

Gerga; Memphs, Tennessee; and kansas Cty,

Mssrwd hep mnmze trcng csts.

They can prvde a cheaper way t hande

greater vmes enterng cngested casta prts,

where hgh and prces and devepment cn-

strants n n areas present expansn bstaces.

At the same tme, mpementng avaabe jst-n-

tme devery systems can extend casta prt

capactes wtht bdng any new actes. Thesegstcs systems redce dwe tme s mre cn-

taners can be mved n and t prts aster t

nand centers, mang rm r mre shps.

Ctes and states that cperate n strateges

cd cme t ahead, bstered by apprprate

edera tax and ndng ncentves t encrage a

regnay rented prcess ted nt natna

netwrs.

PanamaCanal routes

SuezCanal

Cape of Good Hope

Cape Horn

Intermodal routes

The Panama Canal Plays an Important Role in U.S. TradeMajor world shipping routes


36/70


Infrastructure VanguardsPressed t eep ecnmc engnes chggng and

mantan pstn n an ever mre cmpettve

gba and natna maretpace, state and cty

gvernments wegh prrtes, cnsder hw best

t pay r the nvestments needed, and wr t

brea dwn ss and fnd creatve ways t bestpan and bd nrastrctre. Ang the way,

mdest shts n nrastrctre appraches cd

agr a sgnfcant ng-term transrmatn n

and se patterns. The wng sectns revew

what s happenng n sme the cntrys nra-

strctre vangard regns.

New Yr Cant Ard t StpNew Yr, ne the cntrys mst pps

and mprtant ecnmc gateways, emerges as an

nrastrctre nnvatr, mang space r pedes-

trans n Tmes Sqare, bdy nvestng n bcyce

and pedestran actes, and spendng $152 m-

n creatng the eevated Hgh lne par.

St, the areas brdges and tnnes are the bg

tcets, reqrng tens bns dars n

pgrades t eep nctnng, and expensve new

mass transt rtes are needed t prvde mb-

ty and address cngestn n mdtwn and dwn-

twn. The cty, tw states, the Metrptan

Transt Athrty (MTA), and the Prt Athrty

New Yr and New Jersey psh tward the fnsh

ne a ng st transt, ra, and brdge prjects.Transt and ra prjects ncde the wng:

n The $4 bn Wrd Trade Center transt hb,

scheded t pen n 2015, w n 13 sbway

nes t New Jersey PATH cmmter trans and

eventay the lng isand Rarad. Desgned

by Spansh archtect Santag Caatrava, the

prject w sgnfcanty enhance mass transt

cnnectns t and rm the fnanca dstrct.

n undergrnd bastng r the ng-awated

Secnd Avene sbway, whch s sated t

pen n 2017, cntnes. The frst segment cv-

ers ny 33 bcs, and the MTA acs the

ndng reqred t fnsh the $4 bn frst

eg, wth at east anther $13 bn needed t

cmpete the entre ne.

n Meanwhe, an extensn the N. 7 ne t

the ar West Sde and pssby t New Jersey

(va a prpsed tnne) has been fnanced

thrgh the sae devepment rghts abve

MTA ra yards.

n A lng isand Rarad tnne nder the East

Rver nt Grand Centra Statn prceeds

tward a 2016 cmpetn target bt needs an

addtna $2 bn t get the jb dne. The

$7 bn ra ne cd ct cmmtng tmesr 160,000 rders by 30 t 40 mntes n

average.

Brdge prjects ncde the wng:

n The Prt Athrty sees ts frst PPP partner t

hep repace the crrded and sersy def-

cent 83-year-d Gethas Brdge nng New

Jersey t Staten isand. in retrn r avaab ty

payments nded by hgher ts, the Prt

Athrty wants t engage a partner wh can

dever and manage a prject, estmated t cstabt $1 bn.

n The athrty as pans t rase the nearby

Baynne Brdge t accmmdate arger pst-

Panamax shps sng the wdened Panama

Cana. ofcas ntend t pay r the $1 bn

prject rm ncreased prt ees pad by reght

carrers. other crtca prjects ncde repac-

ng a 592 sspensn grders n the 80-year-

d Gerge Washngtn Brdge ($1 bn),

cnstrctng a new lncn Tnne entry hex

($1.5 bn), and mang secrty pgrades t

the regns arprts ($360 mn). Mst

these mprvements w be fnanced thrgh

hgher ts.

n New Yr state fcas are anxs abt

repacng the deterratng Tappan Zee Brdge

cnnectng sbrbs and ey nterstates nrth

the cty. An expensve bt desrabe mass

transt cmpnent was recenty sctched, sca-

ng the prject dwn t a basc tw-me-ng

vehce crssng t whch transt can be added

n the tre. Bt the new brdge st w cst

mre than $5 bn, and even wth ts, pr-

vate fnancng s ncertan.

Athgh sme these prjects w be pst-

pned r even mthbaed, and schedes r

thers stretched t, engh mmentm and

rgency cd prpe sgnfcant and ntabe

nrastrctre mprvements.


37/70


Chcag Gets Creatvelng a PPP eader, Chcag s expermentng

wth new ways apprachng nrastrctre.

Necessty s dentey becmng the mther

nventn, sprrng mre creatvty nstead

ang bac n d stnswere thnng

abt hw t nvest nstead jst spend.Determned nt t et dysnctn at the edera

and state eves dera Chcags tre, Mayr

Rahm Emane annnces a three-year, $7.2

bn pan caed Bdng a New Chcag.

Ttng a cmprehensve apprach, the pan

prmses t rebd transt, sewer, and water sys-

tems, pgrade pars, and revamp schs. The

mayr rejects rasng taxes and sets hs sghts n

ndng thrgh cst savngs, drect ser ees, and

prvate nvestment. Dstancng Chcag rm the

cntrverses srrndng prevs PPP prjects,

ncdng PPPs r cty parng meters and the

Chcag Syway, the cty s ng t new ts

e the Chcag inrastrctre Trstan nnvatve

prpsa r a mncpa nrastrctre bant

attract prvate dars t nrastrctre.

in the sbrbs, transprtatn cas dd what

they have been nwng t d r 20 years

rase ts n the 52-year-d ins Tway t

rerbsh the ncreasngy jammed hghway and

accmmdate a tre mass transt ne. The $12

bn capta pan mars a grndbreang rst

where ts w be dedcated t spprt transt.The pan as ncrprates a new managed

t ane.

The cty as s at hw t better manage

exstng nrastrctre and redce the need r

csty new prjects. Prgrams ncde everythng

rm bcyce sharng and be anes t varaby

prced parng and strmwater captre (t redce

the need r new sewers). its a abt nven-

tvey ndng ess csty nterventns.

Texas Rethns PrrtesDaas/Frt Wrth and Hstn are renwned r

ther rng rad, spaghett-jnctn expressway sys-

tems, and expansve sbrbs, bt mre recenty

the state has been a eader at sng PPPs, nded

by t cncessns, t bd new rads.

Nw even ths energy-rch state reaches pract-

ca mts n what w be pssbe. Texas s

rethnng whether t sbsdze rads and sewers

r exrban devepment and ng at bster-

ng exstng nrastrctre n n areas. Ths

refects the ngng maret sht by pepe want-

ng t ve cser t wr, ctra amentes, and

cmmerca dstrcts.

in Daas, cmpanes start t recate bac rm

the rnges becase ther base empyees pre-

ers a ess car-dependent estye and wants prx-

mty. The Daas Area Rapd Transt ght-ra sys-

tem s settng the stage r cmmerca and mt-

amy devepment arnd ts 55 statns and 15

transer hbs jst as mve-bac-n maret rces

and demgraphc trends p r greater rbanactvty. The Daas/Frt Wrth metrpex nw

has the ngest ght-ra netwr n the unted

Chicago, long a PPP leader, is orging ahead with bus rapid transit and other new inrastructure investments.


38/70


States, cverng 72 mes and bt ver the ast

20 years.

Even n Texas, rads are nt ree anymre. in

act, the pbc becmes cndtned t expect

that any hghway expansns n Texas metrptan

areas w nvve addng managed t anes t

exstng rads. once nstaed n hgh-ccpancy-

vehce anes, cense patereadng techngy

cd be cst-eectvey expanded t a wder

nmber adjacent ree anes. ocas, mean-

whe, revse PPP (cmprehensve devepment

agreement) pcy t encrage partnershps by

caryng and streamnng the bddng prcess.

Carna: Bg Needs, Bg DarsCarna aces mnmenta bdget dects and

wrestes wth state aws that straghtjacet erts t

rase new taxes and eave eaders wth dct

chces. Vters have apprved neary $100 bn

n vars nrastrctre bnd sses t tace sme

prjects, bt the states debt servce rat s ey

t rse rm 4 percent n 2000 t 7 percent by

2015, hepng dg bdget dects deeper and hrt-

ng the states credt ratng, whch n trn ncreases

brrwng csts. Any new nrastrctre prjectsey w reqre PPP nancng as we as mre

ts, ncreased managed anes, and hgher ees.

The states agng rad netwrs50,000 hghway-

ane mes and 12,000 brdgespresent ncreasngy

csty chaenges r pgrades and repacements, and

earthqae-prne rver evees and water devery

systems, ncdng 700 mes canas and ppenes,

crca r mantanng sppes t Carnas rban

ppatn centers, as need verhas.

The states HSR ambtns hnge n edera r

prvate mney, nether whch seems e a

gd bet. A separate, prvatey nanced HSR pr-

psa, the DesertXpress cnnectng eastern ls

Angees sbrbs t las Vegas casns, hnges n

recevng a edera an as mch as $6.5 b-

n, whch wd eave the edera gvernment

tang a gambe n rdershp prjectns.

in San Francsc, Bay Area Rapd Transt agency

panners begn stdyng hw t remde and expandthe ctys 40-year-d sbway system. An estmated

$7.5 bn n ng-term mantenance and rng

stc repacements w be needed n the next 25

years and have n crrent srce ndng.

in ls Angees, the cty has ct bdgets n the

mdde the crrent sca year and recasts

mre sashng r 20122013. Bt the regn s

prsng the bdt an extensve ght-ra sys-

tem desgned t temper the areas wrd-ams

and ncreasngy brdensme reeway cngestn.

The rst phase the ng-awated Exp ght-rane, an 8.6-me stretch between dwntwn and

Cver Cty, s set t pen n 2012 ater cstng

neary $1 bn. A secnd phase extendng t

Santa Mnca, bdgeted at $1.5 bn, s sched-

ed r a 2015 anch.

Burbank Station opened in December 2010 as part o the Dallas Area Rapid Transit systems Green Line

extension. The stations design mimics the adjacent Dallas Love Field airport. (Photo courtesy o Dallas Area

Rapid Transit)


39/70


Infrastructure is a long-term proposition, onethat has always required an understanding o uture demand

and trends, balanced with a realistic appraisal o available

resources. Despite a very challenging economy, many leaders

are orging ahead, applying innovations and trying out new

ideas and approaches in an eort to bring Americas inrastruc-

ture into the 21st century.

This chapter provides concrete, recent examples o how poli-ticians, agency directors, and members o the business commu-

nity are working to meet inrastructure needs in the new eco-

nomic era. The six case studies in this section examine

approaches that have been successully applied in a variety o

metropolitan areas across the country. Three ocus on how

regions are using ballot measures to und critical inrastructure,

and three showcase other examples o inrastructure leadership.

Global economic competitiveness demands new kinds o

regional entrepreneurship, and each o these place-based sto-

ries provides insights and inspiration or leaders seeking inra-

structure solutions:n North Carolinas Research Triangle illustrates some o the

challenges o unding and planning a regional transit sys-

tem that spans three counties. In late 2011, one o the areas

three counties passed a ballot reerendum to und its piece

o the system. Now the regions other two counties must

ollow suit.

n Oklahoma City has developed an innovative way o unding

civic projectsbundle them into short-term, ocused packages,

and subject them to a vote. The citys third in its Metropolitan

Area Projects series, MAPs3, passed in late 2009 and is gener-

ating $777 million or transormative downtown parks and

other civic inrastructure over seven years.

n In Los Angeles, the campaign or Measure Rwhich will gen-

erate $40 billion in local unding or critical transportationinvestmentsrelied on strong leadership rom public ocials

and ample grass-roots support.

n In northeastern Illinois, a broad regional eort has produced

a new water plan that works within existing institutional

rameworks to ensure uture water supplies or the region.

Will the plan translate into action on the ground?

n In San Francisco, a cutting-edge parking program that uses

new technology and pricing is better managing the citys

parking resources.

n In New England, the Knowledge Corridor brand is provid-

ing a regional hook that leaders in two states are leveragingto build a more sustainable, transit-oriented uture.

Despite a sustained economic recession, voters in many parts o

the country are approving local and state ballots that support

inrastructure. Leaders recognize the potential or ballot mea-

inrastrctre leadershpn the New Ecnmy

The Bricktown Canal near downtown Oklahoma City, Oklahoma, was completed under the citys MAPs program.

Deborh Myerson nd

Rchel McCleery

Vtng r inrastrctre


40/70

S P E C I A L S E C T I O N

SPECiAl SECTioN 33

sures to rally popular support or inrastructure investments

that might otherwise languish ununded. When given the

opportunity, voters are saying yes to increased sales taxes,

property taxes, and vehicle ees or investments that provide a

clear benet or their communities.

The Center or Transportation Excellence, which tracks trans-

portation ballots, reports high approval rates even at the heighto the economic recession. From 2008 to 2011, ballots that allo-

cated unds to transit capital or operations had a 73 percent

success rate, while those that included a combination o road

and transit capital and operations had a 64 percent success

rate. The Midwest is a popular place or ballot measures, and

transportation ballots are successul across the country.

Whether states encourage voting or inrastructure depends on

their political culture, oten embedded in state laws and even

constitutional requirements. Many states, especially in the

Midwest, require reerendums to approve local bond issues.

Other states allow local governments to collect local-option taxes

and ees, such as sales taxes or vehicle registration ees, only i

approved by voters. These local-option revenue sources have

become potent vehicles or increased inrastructure investment.

Voters are also supporting open-space and land conservationmeasures, according to data gathered by the Trust or Public

Land. In 2011, voters approved 14 o 24 measures, or 58 percent,

yielding more than $312 million in approved conservation unds;

2010 saw voters avoring such measures by an even greater mar-

gin83 percentor 41 o 49 ballot measures around the country.

Open-space initiatives generated more than $2 billion in 2010.

From 2001 to 2011, 73 percent o 1,387 total measures were

passed, resulting in upward o $87 billion total unds approved.

Big Votes in 2011; Votes to Watch in 2012

W r

rstrctre? Mesre

Tpe

bllt

Tpe

rstrctre Smmr

Big voTES in 2011

Yes Grand Rapds, Mch-gan, BRT system

Prperty tax Transprtatn Vters apprved 0.35 mage ncrease t prperty tax tspprt ther ca bs system and bd the states rst BRTne. The tax w rase $15.6 mn per year.

Yes Cncnnat, oh, street car system

Amendment Transprtatn Cncnnat vters vted dwn an amendment t prhbt thecty rm spendng r brrwng mney n a dwntwnstreetcar prject. Ths s the secnd tme n tw years thatctzens have vted t spprt the prject.

Yes State Washngtnhghway ts

legsatn Transprtatn Vters rejected an ntatve amed at restrctng the se hghway ts and bcng ght ra rm interstate 90 nearSeatte.

N Cty Seatte car-tabee Car-tab ee Transprtatn Seatte ctzens vted aganst a $60 car-tab ee that wdhave rased $204 mn ver a decade r rad and transtrepars.

Yes State Texas Water Prpstn 2

Bnds Water Vters apprved Prpstn 2, whch w aw the state tcreate a revvng $6 bn bnd pacage t nance watercnservatn and sewage and fd-cntr prjects.

Yes Travs Cnty, Texas,Bnd Prpstn 2

Bnds Pars andpen space

Vters sad yes t the cnty t spendng $82.1 mn nbnds that w spprt eght par prjects r and prchases.

voTES To WaTCH in 2012

T bedetermned

State CarnaWater Bnd 2012

Bnds Water The Carna Water Bnd, n the bat r 2012, wd a-w the state gvernment t brrw $11.1 bn t verhathe states water system.

T bedetermned

Atanta Regna Trans-prtatn Bat 2012

Saes tax Transprtatn The Atanta regn w vte n Jy 2012 n a ne-cent saestax ncrease t nd a st transprtatn prjects, ncdng

transt and radway mprvements, cstng $6.14 bn.T bedetermned

State MaryandTransprtatn TrstFnd Amendment2012

Gas taxncrease;vehceregstratnees

Transprtatn Maryand state gvernment has nder dscssn r theNvember 2012 bat a measre estabshng a transprta-tn trst nd and ncreasng gas taxes and vehce regstra-tn ees.

T bedetermned

State oregnRenewabe Energy andFe Devepment andSecrty intatve 2012

legsatn Energy oregn ctzens are cectng sgnatres r a Nvember2012 bat measre that wd athrze a cmmssn tdevep and dstrbte eectrcty and renewabe energy.

Srce: uli anayss vars srces.


41/70


0

10

20

30

40

50

60

70

Transportation

BallotMeasures

Overwhelmingl

yWinwithVote

rs

00 01 02

0304 0

5 06 07

08 09 10

11

Numberofballotmeasures

TheMidwestan

dWestDomina

te

Transportation

BallotMeasures

Midwest West

Southeast So

uthwest No

rtheast

0

10

20

30

40

50

60

70

Numberofballotmeasures(2008

2011)

BallotMeasure

sOftenFund

Transit

CapitalandO

perations

Transit Transit Comb

inationOther/

Road

capital ope

rationsoftransit unkn

own capitalo

r

androads

operations

0

10

20

30

40

50

60

70


2011

)

Propertyand

SalesTaxesA

re

OftenInclude

dinBallotMe

asures

Propertytax

Salestax

OtherBonds

0

10

20

30

40

50

60

70

Measuresa

pproved

Measuresn

otapproved


2011)

Voting orTransportation at

the Ballot Box

rce: uli anayss Center r Transprtatnxceence data.

Nte: Anayss data byear, regn, prject type,nd revene srce.


42/70

S P E C I A L S E C T I O N

SPECiAl SECTioN 35

What are the traits o successul reerendums? Best practices

that have emerged rom campaigns include the ollowing:

n Wrap a specic list o projects into one vote. Voters want to

know exactly what projects they are putting into motion and

are wary o creating a slush und or politicians. Aggregating

projects broadens the ballots appeal.

n

Find the right unding mechanism. Increases in sales taxesand property taxes have been popular, but these are not

viable in every state. Other prospective revenue sources may

include vehicle ees, hotel taxes, or income taxes.

n Know your voter. Use polls and research to identiy voters val-

ues and priorities; hone the message to resonate with voters.

n Learn local politics. Consider how to take advantage o timing.

n Lead with champions. Position persuasive people and organi-

zations to be the ace o the message.

n Build a solid coalition. Reach out broadly to coordinate

among stakeholders.n Prepare to persist. Some ballots may need a second try to

win; the rst time may be a trial run that amiliarizes voters

with the issue.

O course, leadership in inrastructure extends beyond the bal-

lot box. Across the countryeven without major new local

unding rom a ballot measurecities and metropolitan areas

are nding ways to move orward with inrastructure in the neweconomy in creative and innovative ways.

Promising approaches include those that advance the ollowing:

n Using existing inrastructure to its maximum potential, ully

leveraging every resource, and including conservation as part

o the puzzle. Shiny new projects are not always necessary.

n Tapping available ederal unding to maximize investment

opportunities. For now, at least, ederal unding can provide

a critical springboard or new programs and projects.

n Linking, explicitly, inrastructure investment and development.

In an era o scarce resources, building a new inrastructure

project without considering land use is oolishor on the fip

side, planning a new development project without rst think-ing about water, transportation, and other inrastructure.

n Exploiting the potential o collaboration and partnership. In

major urban areas, regional cooperation is key to getting

anything done, said Jack Basso, director o program nance

and management at the American Association or State

Highway Ocials.

Beynd the Bat Bx: leadershp, innvatn,and Partnershps r inrastrctre

Voting or Inrastructure Has Supported the Expansion oTransit across the United States

METRoPoLiTan aREaS BuiLding MajoR nEW TRanSiT SySTEMS

Metr re Trst mpremets

Reerems t

crese tes? appre frst te? Srce s

Chartte lght ra, cmmter ra, streetcars, and BRT Yes Yes 0.5 saes tax

Daas lght ra Yes Yes (athgh sme ctesvted nt t jn) 1 saes tax

Denver lght ra and cmmter ra Yes N 0.4 saes tax

Hn lght ra N Nt appcabe Nt appcabe

Hstn lght ra N Nt appcabe Nt appcabe

las Vegas BRT Yes Yes 0.125 saes tax

ls Angees lght ra, cmmter ra, and bs prjects Yes Yes 0.5 saes tax

Phenx lght ra and BRT Yes Yes 0.5 saes tax

Prtand lght ra and streetcars N Nt appcabe Nt appcabe

Sacrament lgh

Documents

Infrastructure 2012