Infrastructure

Trump budget is schizophrenic on infrastructure

24 May 2017

This week's White House plan adds $200 bln of federal money over a decade. On the flipside, though, it slashes several existing infrastructure-related programs. There are some practical suggestions but, as in the overall budget, smoke and mirrors hamper any real analysis.

Saudis place $20 bln bet against U.S. dysfunction

21 May 2017

The Kingdom's pledge to Blackstone may turn into $100 bln of firepower aimed at upgrading American infrastructure. The problem is finding states and cities that want private cash. Riyadh will need a lot more patience than with its equally huge SoftBank-led tech venture.

Viewsroom: CEO presidency needs boardroom pushback

17 May 2017

Donald Trump’s promise to run the government like a business is proving difficult but Congress could act like strong independent directors to rein in his wayward management.  China’s ambitious Silk Road project could leave its people holding the bag. Plus: job cuts at Ford.

Chinese taxpayers have most to fear on Silk Road

16 May 2017

President Xi pledged $124 bln at an international summit to build a modern version of the ancient trading route. Huge global infrastructure spending will burnish Beijing's standing. But the hype could backfire if citizens of the People's Republic fail to reap tangible benefits.

Benettons bulldoze way into toll-road mega-league

15 May 2017

Atlantia, controlled by the Italian family, wants to buy Spanish infrastructure peer Abertis. The target’s main shareholder, Criteria, hasn’t yet backed the deal. Even so, the premium looks more than fair, a counterbid is unlikely, and holding out would leave Criteria stranded.

Australia hands U.S. timely infrastructure example

11 May 2017

An investor group is paying A$7.6 bln for 50.4 pct of Endeavour Energy, a New South Wales electricity distributor. It's an "asset recycling" model that raises private capital against established operations to fund new government investment. Trump's team should take note.

U.S. air-traffic revamp is overdue for boarding

2 May 2017

The White House wants to privatize flight control and overhaul ancient systems at an estimated cost of $35 bln. Canada pioneered a self-funding, stakeholder-governed model. A similar approach could work for America if carriers, politicians and others can dump their baggage.

Buy American crackdown may hurt Build America push

18 April 2017

The White House wants to curb the use of foreign goods in U.S. construction projects and procurement. Disregarding global supply chains and relying on arcane definitions of what qualifies as domestic add risk of rising prices. The same is true of Trump's infrastructure plans.

Review: China’s New Silk Road mined with distrust

7 April 2017

The People's Republic wants to use its ambitious "One Belt One Road" infrastructure project to build soft power. "China's Asian Dream" by Tom Miller points out the potholes. The country’s search for regional allies is sabotaged by its sense of superiority.

Investors too blasé about grim reaper’s scythe

23 March 2017

An activist bet the farm on 72-year-old Hunter Harrison turning around $43 bln railroad CSX in four years. Actuarial tables suggest a real danger he might not. CEOs are becoming grayer, meaning shareholders have become more willing to bear the risk of impromptu corporate changes.

BT split will please all people some of the time

10 March 2017

The UK telco has agreed to legally separate its infrastructure business. Rivals said the status quo made them and customers worse off. There is still scope for BT to be too influential in how Openreach runs, but its huge pension scheme would have made a clean break impractical.

Aramco’s IPO merits social engineering discount

10 March 2017

The kingdom’s state oil group is about to launch the world’s biggest share offer. It has also just announced plans to invest $4.4 bln in a new industrial city, to create jobs for Saudis. The danger for potential investors is that white elephant subsidies trump a focus on returns.

Suez’s $3.4 bln GE deal just holds water

8 March 2017

The French company is paying a higher multiple for General Electric’s H2O unit than recent takeovers even though its target has lower margins. And promised revenue synergies look meager. Cost cuts and a global need for water infrastructure, though, should help this deal flow.

Infrastructure builds Gary Cohn’s White House role

2 February 2017

The former Goldman president is drafting a plan to build roads and smart grids, which may be more doable than tax reform. His strong presence and chutzpah make him a Trump favorite. Fixing bridges and airports would solidify his leadership in economic policy over other aides.

Guest view: Fixing finance to repair U.S. roads

19 January 2017

Plenty of federal programs exist to help leverage private funds eager to invest in infrastructure and make President-elect Donald Trump's $1 trln plan work, argues lobbyist James Courtovich. What's missing is cooperation in Washington to hold municipal bond issuers accountable.

Viewsroom: Trump’s trickle-down ethics failure

12 January 2017

The president-elect's attempt to avoid conflicts of interest while in the White House is window dressing that sets a bad example for his administration. Meanwhile, Trump's shadow hangs over the Detroit Auto Show. And his infrastructure plan is not as straightforward as it seems.

Beware cracks in Trump’s infrastructure plan

11 January 2017

Two of the president-elect's advisers have drafted a superficially appealing outline, but tax credits involved are giveaways to businesses and investors. The assumptions are fanciful, too. While new ideas are welcome, spurring $1 trln of funding demands a bigger government role.

NYC infrastructure plan years late, billions short

9 January 2017

The New York-New Jersey transport quango has set out a $32 bln plan to upgrade airports, railroads and tunnels. These and ongoing projects like new subways are overdue – and influenced too much by politics rather than real needs. Like trains, officials need to move faster.

Race to build will add impetus to old-world stocks

23 December 2016

Infrastructure is one of the few areas where Donald Trump, Angela Merkel and Theresa May will agree in 2017. Not all the numbers bandied about are as big as they sound. But it should create jobs in developed economies – and gee up long-underperforming infrastructure stocks.

Infrastructure dream grounded by Heathrow reality

25 October 2016

Britain has finally agreed to add a runway to London’s main airport. Even now, the plan may yet founder. Western democracies face challenges when launching big projects. The benefits of a renewed splurge of infrastructure spending will take decades to materialise.