US Infrastructure Isn’t Waiting for a Spending Bill
The US infrastructure system is the backbone of our economy, transporting goods and labor within cities, across state lines, and to export markets around the world. Just consider the infrastructure required to access this article: utilities to provide power, fiber optic lines to transmit data, and seaports to import the computer or smartphone you are reading this on.
Unlike many issues in Washington, infrastructure investment is a rare topic that has widespread, bipartisan, support from lawmakers – largely due to the economic benefits this type of investment can provide.
While President Trump campaigned on an aggressive infrastructure spending platform and has kept infrastructure on his agenda while in the White House, there are several high-profile projects which are already underway and in the pipeline across the country. These projects have been the result of government programs and private investments that seek to address the dire state of the nation’s infrastructure.
Here are four major projects to watch from around the country:
California High-Speed Rail: $68 billion
This project will provide high-speed rail service between San Francisco and Los Angeles, California. With trains capable of traveling 200 mph, the rail system will cut travel time between the cities from ten to just three hours. Ground was broken in 2015, and current expectations are for initial services to begin in 2025.1 This project is financed through a mix of federal, state, local, and private sources.2
NYC Second Avenue Subway: $10.5 billion
Originally proposed in 1910, the first phase of this project was completed in early 2017. The second phase of this project, costing $6 billion, will run from 96th street to 125th street in Manhattan and reduce pressure on the Lexington line which serves 1.3 million commuters each day.3 The federal government – in addition to state and local agencies – will be paying for the project.4
Charlotte Light Rail Expansion: $1.2 billion
This light rail expansion project will double the size of Charlotte’s current rail network, adding 9.3 miles of track and 11 stations. The light rail expansion also includes the development of 3,100 parking spaces and a 45-minute connection to the University of North Carolina.5 The federal government is paying for roughly half of the project, with city and state funds making up the remainder.6
Replacing the Tappan Zee Bridge: $3.98 billion
This bridge, serving commuters between Rockland and Westchester counties, will provide a much-needed upgrade to the existing bridge built in 1955. As the existing structure has aged, hundreds of millions of dollars have been put toward maintenance – without any enhancements to traffic flow or safety. The bridge will provide eight traffic lanes, emergency lanes, and space for future bus and light rail commuter lines.7 The project is financed primarily through state funding and toll-fees.8
Additional Projects in the Pipeline
In the United States alone, the ten largest infrastructure projects proposed come with a combined cost of $132.6 billion.9 Here are just five examples of projects currently in the pipeline:
- A high-speed rail line between Dallas and Houston costing $10 billion
- Enhancements to the New York City bus terminal costing $8 billion
- The I-70 Mountain Corridor in central Colorado costing $3.5 billion
- A two-tunnel water system to transport water from Northern to Southern California costing $25 billion
- Deepening of the Port of New Orleans to accommodate Panamax ships costing $1.2 billion
Given the robust list of projects underway and planned, we believe that local, state, and federal politicians, as well as private sector investors, understand the country’s significant infrastructure needs and are already seeking to address these issues. While a major infrastructure spending package from Washington could be a welcome accelerant to building and repairing the nation’s infrastructure, it is not the end-all-be-all for infrastructure, as the onus may increasingly be pushed to local governments and the private sector instead.
PAVE: The Global X U.S. Infrastructure Development ETF seeks to invest in companies that stand to benefit from a potential increase in infrastructure activity in the United States, including those involved in the production of raw materials, heavy equipment, engineering, and construction.