Many have long said that America hasn't invested enough in its bridges, roads and other infrastructure. Last week, President Obama took steps to ramp up investments with new initiatives to encourage the private sector to invest in the nation's infrastructure. This includes filling in the 'knowledge gap,' or the expertise that state and local policymakers need to channel such investments in a way that protects taxpayers and still provides sufficient returns to investors. While not a silver bullet, the launch of Obama's new Transportation Investment Center is a big step in the right direction, as it's essentially a one-stop shop at the Department of Transportation that connects state and local officials with tools to support private financing for infrastructure projects.
A generation of U.S. roads, bridges, water and sewer pipes built half a century ago is nearing the end of its useful life, but public budgets are too strained to foot the bills to repair and upgrade them. At the same time, private investors from the United States and around the world are desperate to invest in infrastructure projects that provide stable, long-term returns.
Well-designed and executed infrastructure financing using private capital, such as Public Private Partnerships (PPPs), can benefit both government and investors. Projects in Canada, Europe and Australia have shown that compared with purely publicly-run projects, projects coordinated between the public and private sectors have a better track record in being completed on time and under budget. Politically, support for more private dollars for infrastructure is bipartisan and strong. Catalyzing that private investment to fund U.S. infrastructure ought to be a no-brainer.