With so many of the nation's roads, bridges, and ports in serious need of infrastructure upgrades, the big challenge is going to be how to fund it. A recent CNBC article looked at the issue, and author Lawrence Delevingne reported on the role of big investors and private money.
"Long-term investors who control tens of billions of dollars—private-equity firms, sovereign wealth funds, public pensions and the like—aren't betting on the proverbial jet pack of tomorrow. Instead, they hope to make substantial returns by focusing on more immediate—and boring—needs, like fixing bridges, redesigning airports and tweaking road and car technology," he stated.
Here are three reasons why private money might be part of your agency's future.
1. Recent deals are setting the tone. As Delevingne noted, several high profile deals have already happened. These include IMF Investors' 2013 purchase of a strategic stake in Manchester Airports Group, Fortress Investment Group's investment in Florida East Coast Industries, and Global Infrastructure Partners' acquisition of 35% of port operator Terminal Investment Limited.
2. Government funding can't meet the overwhelming need. A report from the International Transportation Forum notes that with the global population expected to hit 9 billion by 2050, there will likely be as much as 4 times the passenger travel and 3.5 times the freight movement as in 2000. And even if lawmakers agree on a long term solution to the Highway Trust Fund crisis, it won't be enough to meet the demand. According to a report from McKinsey & Company, "just keeping pace with projected global GDP growth will require an estimated $57 trillion in infrastructure investment between now and 2030."
3. There's big opportunity. As Delevingne noted, there's a growing number of investors looking to tap into funding transportation projects. Large banks including Citi and JP Morgan are also jumping in.
Read More of the CNBC analysis.