Yesterday, I spilled some words on how much of the ongoing work of USA infrastructure is being driven by the private sector. There is not a lot of easily accessible data of how much public sector investment is piggybacking on private construction projects, but anecdotally, it seems to be a lot.
I have notice during recent travels that the build out is, well, everywhere. Credit the robust economy, now a decade away from the Great Financial Crisis and the worst recession in recent memory.
In addition to the Hudson yard projects, there are other massive public works-like initiatives, only they are less actual public works than they are publicly inspired works. In the absence of a big Uncle Sam infrastructure build, we are seeing more privately funded projects, with a big assist from state and municipal governments in the form of tax abatements or upgraded maintenance/renovation/construction schedules.
A few examples: I was in Boston recently for the MIT Sloane conference and an MIB with Matt Kadnar of GMO. Cranes everywhere, buildings going up, roads closed, construction where ever you see. I spoke to some of the locals, who told me that whenever these buildings go up, there is an accompanying municipal work, expanding/repaving/rebuilding roads and metro lines.
In Chicago, the West Loop area is another fairly massive private sector expansion, also conceived in large part by private developers in concert with the city. Ironically, this part of Chicago was neglected and run down until Oprah Winfrey built the (recently demolished) Harpo Studios here almost 20 years ago in 1990. (The Oprah era in Chicago is now officially over).
It is not merely big construction projects, but smarter, more pro-active maintenance as well. When Long Island Power Authority (LIPA) selected PSE&G to replace National Grid as the manager of the Long Island area power grid, most of the locals yawned. But PSEG has experience and a proven track record in responding to storms like Irene and Sandy; they also wrangled a bigger budget from New York State and LIPA. (National Grid had a budget of $290 million in 2013; PSEG was $446 million in 2014). The biggest difference I have witnessed has been a proactive approach in anticipating future Nor-Easters – trimming trees and other potential dangers to power lines, and upgrading computer and communications systems.
And the roads in my area, that I have been whining about incessantly for a decade, are now significantly improved. The Long Island Expressway has been completely repaved; main arteries like 25 A andB and Jericho turnpike were also upgraded; now the secondary roads are being reworked.
I don’t often agree with the US Chamber of Commerce, but their view is correct: nations that invest in a robust and modern infrastructure have a competitive advantage.