We could be about to enter a golden era for infrastructure investment – writes Tom Wadsworth.
Governments in the UK and US are increasingly looking to the private sector to invest in and deliver infrastructure to drive up productivity and growth, bringing with it jobs and prosperity. While the pipeline of committed projects remains a concern, and there are tensions between consumer prices and investment, Trump’s election shows infrastructure can still be popular.
In the UK diggers are being fired up at Hinkley Point and for HS2, Government has backed Heathrow and there are plans for the private sector to deliver new rail lines. Across the Atlantic, Donald Trump’s planning a $1tn spend – with half privately funded – on top of the hundreds of millions of dollars cities and states like New York are already planning to invest.
The pipeline is still a worry. Will projects continue to be signed off on the scale needed? In the UK, public money for investment is running out, and too often Government and regulators just get in the way of significant private involvement. In the US, President-elect Trump needs to convince a reluctant Congress to sign-off the money needed to pump-prime his plans.
Who will pay for all this?
The price consumers pay to use all this infrastructure will remain a challenge. Inflation is likely to rise in both the UK and US, so families getting poorer in real terms will baulk at the burden of extra costs to pay for all this.
Smart companies will increasingly use social media to engage and motivate people, countering the cynical traditional media.
So 2017 could see the start of a real golden age of private sector infrastructure investment and delivery.