Need for Increased Infrastructure

A recent survey of public sector leaders from around the world conducted by the Economist Intelligence Unit on behalf of KPMG has identified the need for continued investment in infrastructure even as economic stimulus funding is slated to end. This is not surprising, especially in North America, as most of our major infrastructure - water & sewage; highways; schools, etc - was built in the 1950s to 1970s and is coming to the end of their useful life. I recall a recent report in a newspaper about the age of the sewer pipes in major Canadian cities - some of these pipes are from the late 1800's and are made of wood. You can just imagine the water leakage that occurs!

The report states that 70 percent of North American respondents said lack of funds remains the largest obstacle to infrastructure development, compared to 56 percent of their global peers.

“While stimulus spending was a first step, many government officials are clearly telling us that they need a long-term infrastructure investment strategy to meet the needs of their country,” said Stephen Beatty, head of infrastructure advisory for KPMG’s Global Infrastructure practice in the Americas and a partner in KPMG in Canada. “Modernizing the world’s infrastructure will require massive investment and cooperation by the public and private sectors for many years to come. But those countries that find ways to make the necessary infrastructure investments now are likely to be the leaders of tomorrow.”

The report also surveys the respondents view as to the effectiveness of governments in delivering infrastructure with the preponderant view that this is one of the barriers to delivery as is lack of financing.

I believe that the solution to "effectiveness" issues requires that governments work closely with their stakeholders in determining the infrastructure requirements and that they then work closely with the private sector to deliver on these requirements. A long-term capital investment strategy is also required to align resources versus the replacement requirements for infrastructure as well as planning for new infrastructure.

In March 2008, IPAC published a special issue of our Canadian Public Administration journal that was devoted to public-private partnerships. If you are an IPAC member, you can log in and go to CPA to see all these fascinating articles.

There is clearly much to do to renew our infrastructure in Canada and governments have a lead responsibility to ensuring that this infrastructure is in place so that our future economic growth is optimized. The KPMG report is quite interesting and I would recommend it.