Infrastructure Jobs to Explode Under Obama
The voters have chosen. Barack Obama will be the 44th President of the United States. Looking ahead, as President, Obama will be forced to tackle a slew of domestic issues, including the faltering economy, healthcare…and the nation’s crumbling infrastructure. In fact, he will now have to consider as one of his first items Congress’ next transportation funding bill. A large part of the debate over this bill is expected to include public private partnerships (PPPs or P3s). PPPs work by engaging the private sector to design, build, operate and maintain public infrastructure. Although largely met with opposition until now in the U.S., P3’s have been very successful in Europe and Australia in generating needed funding.
A major component of Obama’s economic recovery plan is to create as many as two million new jobs rebuilding and repairing the nation’s bridges and tunnels. Obama also supports the creation of a National Infrastructure Bank, which would be an independent organization that would decide what projects to pursue, and fund it with as much as $60 billion of federal money over 10 years. According to Time, it is likely that Obama would end up spending more than he is right now projecting. As a result, the report argues that infrastructure plays are the best way to invest in an Obama presidency. Moreover, executive search firm, A.E. Feldman, contends that Barack Obama’s Presidency promises to create huge job opportunities in project and infrastructure finance.
Crumbling U.S. Infrastructure
- The American Society of Civil Engineers forecasts that $1.6 trillion needs to be invested in U.S. infrastructure over the next five years.
- The American Society of Civil Engineers (ASCE) also says drinking water faces an annual shortfall of at least $11 billion to replace aging facilities that are near the end of their useful life and to comply with existing and future federal water regulations.
- The Water Infrastructure Network (WIN) contends that over the next 20 years, America’s water and wastewater systems will have to invest $23 billion a year more than current investments to meet the national environmental and public health priorities in the Clean Water Act and Safe Drinking Water Act and to replace aging and failing infrastructure.
- The Environmental Protection Agency (EPA) reports that our nation’s wastewater treatment facilities and systems will require as much as $390 billion in capital investment by 2025 to keep them in service.
- The Federal Transit Administration says $21.8 billion is needed annually over the next 20 years to maintain and improve just the operational capacity of transit systems.
- The Federal Highway Administration says $131.7 billion and $9.4 billion are needed respectively every year over the next 20 years to repair deficient roads and bridges.
The U.S. needs to overhaul its outdated regional infrastructure planning process and create a viable federal framework, or face compromising its ability to compete in a global marketplace, according to a report compiled by the Urban Land Institute and Ernst & Young. The research concludes the U.S. has at least a $170 billion annual funding gap in addition to its outmoded land use and infrastructure models. Making matters worse, the gap is currently widening and it could balloon over the next few years as local and state governments experience “revenue shrink.” The report warns that America is headed for a crisis in the next 10 years if nothing is done.
Obama to Tackle U.S. Infrastructure Funding Gap
Barack Obama’s Presidency promises to create huge job opportunities in project and infrastructure finance. During his campaign, Obama promised up to two million new jobs annually through national infrastructure investment. On his web site, Obama said he “believes that it is critically important for the United States to rebuild its national transportation infrastructure – its highways, bridges, roads, ports, air, and train systems – to strengthen user safety, bolster our long-term competitiveness and ensure our economy continues to grow.”
While in the Senate, Barak Obama also a co-sponsored The National Infrastructure Bank Act, which is now Included in his plans for rebuilding the nation’s infrastructure. Senators Chris Dodd and Chuck Hagel, introduced The National Infrastructure Bank Act, back in August 2007. The legislation would establish the National Infrastructure Bank - an independent entity of the government tasked with evaluating and financing capacity-building infrastructure projects.
The bill would effectively create a public-private partnership agency tasked with expanding the role of the federal government in creating massive public works projects. The bank would encourage local public agencies to “partner” with private for-profit entities to develop projects worth at least $75 million each. The intent is to leverage the investment through bonds and private sector participation.
Senator Dodd explains that, “It [the bill] targets specifically large capacity-building projects that are not adequately served by current financing mechanisms. The proposed Infrastructure Bank Act also will increase the ability of the private sector to play a central role in infrastructure provision.”
“The legislation we are introducing establishes a new system through which the federal government can finance infrastructure projects by leveraging private and public capital to fund large projects that are vital to our country. This legislation provides a new model for prioritizing the building and maintenance of our national infrastructure,” according to Sen. Hagel.
Looking Ahead
The old ways of financing and constructing public facilities through bonds and taxes, simply aren’t equal to the task. Increasingly, investors and politicians alike see privatization as a viable alternative. Amid the trend, A.E. Feldman, says infrastructure finance jobs are opening up for candidates with backgrounds in investment banking as well as experience in analyzing and executing structured financings. A.E. Feldman’s CEO, Carol Schwam, says the most sought after candidates are those with experience in infrastructure transactions and civic engineering. Additionally, legal jobs are opening up for attorneys with expertise in global project development and complex financial transactions.
Are you working in Project & Infrastructure Finance? If you want to grow your career or your company’s bottom line, contact A.E. Feldman’s President, Mitch Feldman, now. Find out more about infrastructure jobs and public private partnerships today!
