- Panelists discuss infrastructure projects at Bloomberg event
- McKinsey sees $57 trillion needed for infrastructure by 2030
Governments can cut red tape around infrastructure projects by engaging the private sector as partners and sources of capital, said panelists speaking at the Bloomberg LIVE Canadian Fixed Income conference in New York.
New York’s Tappan Zee bridge replacement, whose permitting process was expected to take five years but was completed in 18 months, is an example of how governments can streamline approvals, said Zak Cutler, a Toronto-based associate principal at consultants McKinsey & Co. Committing to completing approvals within six months will help get infrastructure built, he said.
"Treat the private sector like an ally," Cutler said. "Actually talk to the private sector to say what is actually a financiable project."
Governments need to decide when they want private capital to help build an infrastructure project, said Thierry Vandal, President of Axium Infrastructure U.S.
"It’s not a question of red tape as much as governments deciding this is what they want to do," Vandal said.
The McKinsey Global Institute estimates $57 trillion will be needed for infrastructure around the globe to 2030, according to its latest research. The figure includes the infrastructure investment required for roads, rail, ports, airports, as well as power, water and telecommunication needs, according to McKinsey.
That amounts to almost 60 percent more than the $36 trillion spent in the 18 years prior to the 2013 study, McKinsey said.
In the U.S. alone, the American Society of Civil Engineers is projecting a $1.6 billion shortfall in funding for the estimated $3.6-billion infrastructure spending needed between 2013 and 2020, leaving huge opportunity for private-sector investment.