The role of government: spend, spend, spend
Governments are committed to boosting infrastructure spending, but they must take care on how they do it. Louise Bowman reports.
GIVEN THAT GOVERNMENTS on both sides of the Atlantic have seized upon infrastructure investment as a way out of the economic mire, it is not unreasonable that they should be expected to step up and pay for it. But given the scale of funding required, the pressure is on to find cost-effective ways to finance the projects now planned.
"The government wants to spend money, and infrastructure investment is desperately needed"
Nick Chism, KPMG
"The government wants to spend money, and infrastructure investment is desperately needed," says Nick Chism, global head of infrastructure at KPMG in London. "But it needs to make sure that money is spent wisely and quickly enough." The problem with using infrastructure as a stimulus to jobs and the economy is that the impact can take a very long time to be felt. But the fact that a commitment to substantial state investment in infrastructure has been made can quickly distort the private market for infrastructure finance. For example, the Florida Department of Transportation recently withdrew its support from a longstanding $1 billion PPP project to finance the Port of Miami Tunnel.