Funding ‘High Visibility’ Infrastructure

 Funding ‘High Visibility’ Infrastructure

 

It is well known that China has brought a lot of high investments in projects initiated in developing countries where they have  financed and built roadways, transit lines, airports and any other major form of transport infrastructure you can think of. And it is not only restricted to that; Chinese yuan has also been spent on hospitals, schools and community development centres. As a result, it has helped them to consolidate their Belt and Road Initiative (BRI), while demonstrating themselves as a soft power.

Other Asian economies though aren’t just sitting and watching. In recent developments, India has decided to fund the Greater Male Connectivity Project (GMCP); which is said to be the “’largest civilian infrastructure project in the Maldives’. The financial package will have a grant component of $100 million and a new Line of Credit of $400 million” (The Wire). This project is said to give better connectivity to the four islands, boosting economic activity by generating employment and promoting more tourism in the region.

It would be interesting to see how this race between these countries to fund ‘high visibility’ infrastructure would turn out for the host countries themselves.

S. Jaishankar addressing a press conference with regards to the Maldives announcement (Image Credits: Indian Express)

State of Indian Infrastructure- Part 1

 State of Indian Infrastructure- Part 1

 

India celebrated its 74^th Independence Day celebration yesterday. Prime Minister Modi, in his annual address to the nation, had announced several new measures. One of them is the declaration that India will spend more than ₹100 lakh crore (approx. $1.3 trillion in USD) on the National Infrastructure Pipeline Project. “There is a need to give a new direction to the overall infrastructural development of the country to move India towards modernity at a fast pace. This need will be met through the National Infrastructure Pipeline Project," he said” (Livemint), identifying 7000 projects which would be developed in this direction.

The country has been experiencing a downturn in its economy even before the pandemic hit. It is expected that these projects would focus more on aspects such as climate resiliency and sustainable energy access infrastructure into the recovery response to the COVID-19 crisis.

A picture of the dashboard for the NIP released recently (Image Credits: YouTube)

 

Hudson Yards Project

Hudson Yards Project

The Hudson Yards project is one of the most exciting real estate development project not only in the country; but I would say in the world. Spanning over 28 acres around Chelsea and Hudson Yards, the project would consist of 16 sites. The first phase actually opened last year and I am happy to report that I did visit the site. There was a huge green space there which is very pedestrian friendly. Also some buildings have already opened up.

“When Hudson Yards is completed, an estimated 125,000 people daily are expected to live, work, dine, shop, study, stroll or sightsee at this 28-acre neighborhood, which will include 14 acres of public open space, a public school and the Western Hemisphere’s highest outdoor observation deck, among its many commercial and residential buildings” (Hudson Yards New York). The second phase is expected to be completed by sometime in 2024. Hopefully, I can review this exciting on-going project even then.  

A picture of the project (Image Credits: NY.Curbed)

Impact of COVID-19 Pandemic on US Infrastructure- Part 4

Impact of COVID-19 Pandemic on US Infrastructure- Part 4

In this series of blog articles, I continue my coverage of the impact of the COVID pandemic on US infrastructure. We can say in complete certainty that the economic impact of the pandemic, when measured, would be unprecedented. Though most states have reopened (and some of them have scaled back as well), its impact on infrastructure can’t be gauged quickly. Rather, a more systematic and comprehensive review of existing conditions and a plan to upgrade it must be sough out through experts. 

“One can expect that infrastructure financing will take a downward plunge in the short to medium term. However, once the pandemic is successfully contained, the focus will need to shift from crisis management to assisting to adequately invest in infrastructure for development, as well as preventing and mitigating the impact of future outbreaks contractually” (Deloitte).

A picture of the ASCE Logo; the ASCE is expected to play a big role in infrastructure financing in the near future (Image Credits: McKinley Advisors)

Impact of COVID-19 Pandemic on US Infrastructure- Part 3

Impact of COVID-19 Pandemic on US Infrastructure- Part 3

As mentioned in Part 2 of this series, the lack of infrastructural capital to not only operate current projects but also fund future, long-term projects is an extremely negative fallout resulting from the COVID-19 pandemic. One way to address this is by public-private partnerships which the US has taken little light of.

But, I definitely believe the country is seeing the benefits of having such agreements. Take the example of the healthcare sector: “As the CDC stumbled around in its early testing, Mayo and Cleveland Clinic rapidly developed their own tests, only to be forced to stand down by government agencies.  Now they are unleashed, as is Roche, ThermoFisher, Integrated DNA Technologies, LabCorp and Quest” (Healthevolution). Even the big technology companies like Google and Apple are regularly publishing mobility reports to support decision makers. This is also a great opportunities for governmental agencies to partner with companies and start-ups in the technology Sector for the latest digital tools. It is also an opportunity for the former to ensure that critical government services can be run digitally as well.

The CDC Building in Washington, D.C. (Image Credits: CNBC)

Impact of COVID-19 Pandemic on US Infrastructure- Part 2

Impact of COVID-19 Pandemic on US Infrastructure- Part 2

As the COVID-19 pandemic continues to wreck havoc causing economies to be disrupted and major declines in employment rates, federal, state and local government agencies are looking at prospects of huge revenue shortfalls, lack of support system for service and maintenance, furloughing their employees and the prospect of multiple waves. In the transportation sector, most agencies are depended on various tax streams (e.g. the farebox tax, sales taxes, gas tax). With all these sources depleted, they have to depend on federal agencies to bail them out. This also puts a risk not only to their current projects but also the ones they have planned for the future.

At the same time, this is also a great opportunity for these agencies to fix their long-standing problems of projects still stuck in the gestation period. This is the time for them  address these critical issues and modernize the infrastructure, without compromising on the safety.

The MTA ridership has plummeted over the last three months (Image Credits: ABC7 New York)

Bangladesh Dialysis Centres

Bangladesh Dialysis Centres

This blog is now expanding to focusing on infrastructure of a type which hasn’t been explored at all: healthcare infrastructure. The first project which I am going to focus on is in a country of the Indian subcontinent: Bangladesh. According to KPMG, “Bangladesh is launching its first healthcare PPP: two dialysis centres in the cities of Dhaka and Chittagong at a cost of US$1.8 million” (KPMG). The role of the private sector in this project would be that of creating the existing infrastructure while the government would provide financial and logistic support.  There would be a leasing contract between the Directorate General of the Health Services, the Infrastructure Development Company (which acts as the capital provider) and Sandor Medicaid (which is the project developer).

This initiative is said to increase the number of dialysis machines and broaden the level of dialysis services by adding new capacity into existing public hospitals. This project will be developed through the design, build, finance and operation (DBFO) method. It is said that, based on the success of this project, other healthcare infrastructure-related projects like diagnostic services, imaging facilities, laboratories, pharmacies and ambulance services might be completed through public-private partnerships.

The Chittagong Medical Center, shown here, would have one of the two dialysis centers in this project (Image Credits: National University Archive)