Five Infrastructure Projections for 2009

(Continued)

1. National Infrastructure Bank. In the US, the Obama government will create a National Infrastructure Bank—this will be a sustained game changer for the US infrastructure industry, doubling market size to $300 billion and, more importantly, creating new markets, and new ways of thinking about mobility, inter-modality and productivity.

2. Global Infrastructure Spend.  Globally, In 2008 the world spent 2.2% of GDP on infrastructure—as a result of already announced fiscal stimulus plans this figure will rise to roughly 2.9% in 2009 (an additional $280+ billion); developed countries will fare better than developing countries, achieving a nearly 1% bump in infrastructure investment as a percentage of GDP, while developing country infrastructure investment remains flat.

3. Advent of New Infrastructure Model. A new infrastructure finance model will rapidly emerge, replacing the privatization model that died a decade ago, with robust public sector participation, lead by catalytic private firms that put much more of their balance sheets at risk (and, indeed, develop balance sheets that can leverage private financing).

4. New Model in the US. In the US, this model will increasingly take cues from the Spanish model—including a series of roll-ups, the marriage of E&C firms with financial players, and the creation of an infrastructure bond market pegged to project rates of return (replacing the old model will increase the investment capacity of the public sector by as much as 300%).

5. E&C Leadership/Strategic Infrastructure. After a decade of anemic finance-led infrastructure performance we look forward to a re-balancing in 2009, whereby engineers and the engineering mindset (productivity IRR's rather than financial IRR's—thinking in 20-30 year strategic terms) play their proper role in project concept and design creation.