Global infrastructure trend monitor: North American roads edition — Outlook 2009–2013 

Key findings:

Canada

Model outputs:

• Four provinces — Alberta, British Columbia, Ontario and Quebec — are expected to continue to attract nearly 90 percent of Canadian road investment

Insights:

• Growing calls for increased investment in transportation related investment at all levels of government — municipal, provincial, and federal.
• Investment is likely to focus on projects of both local and national importance, with new road construction being limited to the major urban areas.
• A strong appetite for alternative funding and development models such as P3/PPP. Several road and transit-related projects have been developed as PPPs, with more envisioned for the future
• Institutional investors, such as pension funds, are leaders in the secondary infrastructure asset market, both domestically and abroad.

Mexico

Model outputs:

• Road expenditure is predicted to shrink by an average of 8.6 percent per annum between 2009 and 2013, taking the total expenditure in 2013 to US$773 million.
• Six of the 32 states are forecast to constitute 45 percent of Mexican road investment during the same period (2009–2013).

Insights:

• A “National Infrastructure Program” launched in 2007 is expected to result in billions of U.S. dollars in additional investment across the country.
• The economic slowdown has resulted in some delays to the road reprivatization program.

United States

Model outputs:

• California, Florida, and Texas lead the states in terms of combined public and private investment in road infrastructure and are projected to maintain their dominance through the medium run.
• District of Columbia, North Dakota, South Dakota, Wyoming, and Vermont are forecast to invest the least in US$ in road infrastructure.

Insights:

• There is significant need for investment in highway infrastructure in the United States, not only to increase new capacity, but also to bring the 50-year-old interstate highway system up to an appropriate condition for the demands of users.
• Existing funding mechanisms, which primarily consist of user fees and taxes, have been insufficient to cover the infrastructure funding needs.
• With this in mind, the Obama administration has taken the strategic step of placing infrastructure investment in a prominent position in the American Recovery and Reinvestment Act (Recovery Act). The Recovery Act alone will not solve the infrastructure issue, but it may provide the catalyst that helps to redefine the way in which infrastructure is addressed.
• A key emphasis of the infrastructure stimulus is ensuring that there is transparency and accountability in the spending process, with rigorous scrutiny in determining the candidate projects.
• To the extent that the stimulus program creates opportunities for co-investment with the private sector, public capital can be freed up to address additional pressing needs.
• With regard to private investment in infrastructure, over the last few years, there have been two types of players from the government side:
• Virginia, Texas, and Florida have been the dominant players when it comes to utilizing private investment to fund new capacity.
• The City of Chicago and the State of Indiana have led the way in terms of private sector investment in operation and maintenance of existing assets. In the lead up to 2013, states like California, New York, Georgia, Nevada, and Michigan are looking very seriously at joining the list of states using private investment for road infrastructure.

Related publications:

• Global Infrastructure Trend Monitor: Indian Healthcare Edition – Outlook 2009-2013
• Global Infrastructure Trend Monitor: European Transport Edition – Outlook 2008-2012
• Success and failure in urban transport infrastructure projects

Related content:

• Infrastructure Insights