From roads and bridges to airports and rail lines, US infrastructure has fallen into neglect and disrepair, prompting a search for new methods of funding, such as privatization and franchising schemes. But rather than leasing and selling off public assets, why not tap their latent investment value?
NEW YORK – US President Donald Trump’s plan to boost infrastructure spending through tax credits has received a cool reception from investors. His long-awaited proposal to upgrade and repair America’s crumbling roads, airports, bridges, tunnels, and other infrastructure will come to nothing unless all sides are open to new thinking about how such projects are to be financed.
Currently, infrastructure investments are paid for either with taxes or through user charges such as tolls. But there is an alternative for unlocking public wealth at the local level: professional management of existing public assets.
This does not mean asset recycling or privatization by another name. If privatization is to increase the resources available for funding public infrastructure, assets must be sold for more than the present value of the profits they generate under public ownership.Local politicians and voters have understandably grown skeptical of franchising schemes that separate public funding from the provision of goods and services.
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NEW YORK – US President Donald Trump’s plan to boost infrastructure spending through tax credits has received a cool reception from investors. His long-awaited proposal to upgrade and repair America’s crumbling roads, airports, bridges, tunnels, and other infrastructure will come to nothing unless all sides are open to new thinking about how such projects are to be financed.
Currently, infrastructure investments are paid for either with taxes or through user charges such as tolls. But there is an alternative for unlocking public wealth at the local level: professional management of existing public assets.
This does not mean asset recycling or privatization by another name. If privatization is to increase the resources available for funding public infrastructure, assets must be sold for more than the present value of the profits they generate under public ownership.Local politicians and voters have understandably grown skeptical of franchising schemes that separate public funding from the provision of goods and services.
To continue reading, register now.
Subscribe now for unlimited access to everything PS has to offer.
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As a registered user, you can enjoy more PS content every month – for free.
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