Forget Indian infrastructure problems – In the US the infrastructure is crumbling, but this presents opportunities close to home for many

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By TESTCustomwebLP TESTCustomwebLP October 19, 2010 14:42

Forget Indian infrastructure problems – In the US the infrastructure is crumbling, but this presents opportunities close to home for many

Yesterday we reported that US President Barack Obama was drumming up support for an additional $50 billion investment in improving the nation’s transportation infrastructure. Obama wants to rebuild thousands of miles of road, maintaining miles of railways, as well as restoring 150 miles of airport runways and implement a new air-traffic control system.

Obama quotes from a recent report from the US Treasury Department and White House Council of Economic Advisers which warns the US is lagging behind China on repairing and improving national infrastructure. According to the report, the Gross Domestic Product the US spends on infrastructure is just 2%, while a separate study estimated the federal government, plus state and local governments, would have to spend $194 billion just to repair its existing, crumbling infrastructure. Obama has asked Congress in September for an initial $50 billion to begin a six-year plan of infrastructure upgrades. Part of this money would be used for a $5 billion overhaul of Philadelphia International Airport, with new runways and gates, and strategies to reduce congestion, among others.

Even though all eyes are on China and India lured by the huge profits to be made through the opportunities presented by the expansion of their airport networks and air cargo markets, US investors would be better placed to look closer to home to help to maximize profits, and as Obama states, investment in infrastructure in the US means more jobs for the aviation sector that has seen a huge amount of lay offs in recent years.

However, commentators in the US are not convinced that Congress will approve the motion, not least because many republicans are against the plan. Some have criticized the failure to improve infrastructure with the $814 billion stimulus program, passed last year, which they say was supposed to improve infrastructure and create jobs – some 60% of which has yet to be spent.

So while the Fed gears up to print money once again and the US economy slides back toward uncertain territory it is clear that there remains a great deal of federal money in the coffers that can be allocated to that one core area of recession busting job creation, infrastructure. The lobbying has started, the bidding will soon – the question is are you in a position to gain? Airlines, especially those with an interest in domestic East Coast travel and those airlines outside of the US looking to get a good deal at a new hub close to both New York and Washington, should investigate further as the first to move in will get a great boost and very good publicity under the wing of the current administration. Southwest, for one, should be in play on this.

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By TESTCustomwebLP TESTCustomwebLP October 19, 2010 14:42
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