Blackstone Unveils $100 Billion Ambition for Infrastructure – May 20, 2017, 11:24 AM PDT


Photographer: Patrick T. Fallon/Bloomberg

Blackstone Group LP, the world’s biggest private equity manager, is eyeing more than $100 billion in infrastructure investments with a new strategy anchored by Saudi Arabia’s Public Investment Fund.

PIF agreed to commit $20 billion to the pool, and Blackstone plans to raise the same amount from other investors, the New York-based asset manager said in a statementSaturday. With leverage, Blackstone expects to have more than $100 billion in purchasing power for infrastructure projects, primarily in the U.S.

The agreement between Blackstone and PIF is a non-binding memorandum of understanding, and the organizations are continuing to negotiate terms, they said.

The partnership comes as top executives, including Blackstone Chief Executive Officer Steve Schwarzman and KKR & Co. co-CEO Henry Kravis, descend on Riyadh for the inaugural Saudi-U.S. CEO Forum, a weekend of dealmaking. The meetings, which have already yielded billions of dollars in deals between companies including oil giant Saudi Aramco and General Electric Co., are taking place as U.S. President Donald Trump visitsthe kingdom.

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U.S. Infrastructure Gets ‘D+’ Grade from Civil Engineers – By  Cameron McWhirter The Wall Street Journal Updated March 9, 2017 11:18 a.m. ET


Getting roads, bridges and other structures to a safe, functioning level would cost $4.59 trillion over the next decade, American Society of Civil Engineers says

Part of the over 100-year-old North Broad Street Bridge in Ridgeway, Pa., collapsed in June 2015. A new report says U.S. infrastructure largely fails to maintain a safe, functioning level.

Part of the over 100-year-old North Broad Street Bridge in Ridgeway, Pa., collapsed in June 2015. A new report says U.S. infrastructure largely fails to maintain a safe, functioning level. Photo: Brandon Leithner/Associated Press

American infrastructure has barely maintained a below-standard grade of “D+” over the last four years, according to the American Society of Civil Engineers.

In its “Infrastructure Report Card” issued every four years, the engineering group forecast that it would cost about $4.590 trillion over the next decade to bring the country’s roads, bridges, public schools and ports up to a safe, functioning level, about $2.064 trillion more than what governments and the private sector are ready to spend.

The association, based in Reston, Va., called for infrastructure investment to increase from the current level of about 2.5% of U.S. gross domestic product to 3.5% by 2025.

“When it comes to your infrastructure you should be worried,” said Norma Jean Mattei, 2017 president of ASCE. “President Trump is onto something as he calls for a new program of national rebuilding.”

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How to Fix America’s Infrastructure – By Aaron Klein September/October 2016 Issue


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Just after 6 PM on August 1, 2007, at the peak of rush hour, 111 vehicles were driving across the I-35W bridge over the Mississippi River in downtown Minneapolis when a thin metal plate in the bridge’s central span ripped. The bridge collapsed, plunging vehicles and passengers into the river more than 60 feet below. Thirteen people died, and 145 were injured.

This was not an isolated incident. In May 2013, a bridge on the I-5 north of Seattle collapsed, injuring three people, when a truck carrying an oversize load crashed into it. And in February 2015, a chunk of concrete fell from the bottom of the I-495 overpass in Maryland, crush­ing a car.

These incidents should not have come as a surprise: according to the American Society of Civil Engineers, a quarter of the United States’ bridges are structurally deficient or obsolete. Bridges are carrying more traffic, with heavier vehicles, than they were originally designed to handle, and in 2013, the average bridge was 42 years old.

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China’s High-Speed Rail Diplomacy – By Tom Zoellner June 14, 2016


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A sense of uncertainty hangs over American infrastructure, as the United States muddles through with its aging nuclear plants, careworn bridges, and potholed highways. In past eras, the United States excelled at building major projects; now, it lags behind other countries. That is particularly true in one area: building railroads. Even finding money for maintenance can be a problem. A few hours after a passenger train derailed near Philadelphia on May 12 last year, Congress voted to cut Amtrak funding by $252 million, further starving the nation’s beleaguered carrier.

Today, China dominates the railway market, particularly for high-speed rail systems, which the Chinese are busily exporting to East Asia, Europe, and even the United States. China began to invest heavily in high-speed rail in 2007, seeking to create jobs and to improve the mobility of people and goods in its rapidly growing economy. Between 2008 and 2011, the Chinese government made use of its famed central planning, its easy access to credit, and its willingness to invoke eminent domain to seize land in order to build 6,000 miles of high-speed rail tracks, connecting most major cities in the country to each other.

Then, in 2011, Beijing launched a campaign of what observers—and eventually China itself—termed “high-speed rail diplomacy,” as government-controlled Chinese firms sold technology to Hungary, Romania, Serbia, and Thailand, among other places. Beijing hoped these trains would not just carry passengers but would also deliver Chinese influence. As one Chinese government press release put it, for Beijing, building and exporting a high-speed rail system represented a “strategy rather than just a normal project.” The trade with resource-rich neighbors like Kazakhstan and other central Asian nations could only enhance the stream of raw materials like oil and copper that China needs to meet its growth projections. High-speed networks that are extended into neighboring countries could, conceivably, serve a military purpose as well.

Beijing has also long wanted to add the United States to the list of places where it hopes to use high-speed rail to generate profits and spread China’s technological footprint and market share. After all, if the United States can’t muster the political willpower to build out its own network of bullet trains—and so far it has not—why not offer a helping hand?

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Fixing potholes The hole story – Jun 11th 2016


Researchers are inventing new ways to prevent a motoring curse

Instant duck pond

POTHOLES are a scourge of rich and poor countries alike. The American Automobile Association recently calculated that 16m drivers in the United States suffered pothole damage to their vehicles in the past five years. That damage ranged from punctures, via bent wheels, to broken suspensions. The bill to fix it was about $3 billion a year. In India, meanwhile, the cost of potholes is often paid in a harsher currency than dollars. There, more than 3,000 people a year are killed in accidents involving them. Yet cash-strapped governments often ignore the problem, letting roads deteriorate. In Britain, for example, some £12 billion ($17 billion) would be needed to make all roads pothole-free. Ways of repairing potholes more cheaply and enduringly would thus be welcome. And several groups of researchers are working on it.

The most common cause of potholes is water penetrating cracks in a road’s surface and weakening its foundation. This is a particular problem with asphalt surfaces. These are made from an aggregate of materials bound together by sticky bitumen. The constant pounding of traffic disintegrates the road surface above the weakened area. In cold climates the destruction is aggravated by water in the cracks freezing and thawing. The shattered asphalt then peels away, leaving a pothole.

To make matters worse, any repairs that do happen are usually a lash-up. To save money, the material used for the patch is frequently “worked cold”. This means it is not heated with specialist equipment to make the bitumen in it soft enough to flow into the shape required and meld properly with the edges of the pothole. Instead the stuff is simply shovelled off the back of a lorry and pounded down. That can work as a temporary fix until the road can be resurfaced properly, but often as not this job gets delayed almost indefinitely, which results in more cracks appearing around the fill and yet more potholes.

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We need lots more power lines. Why are we so bad at planning them? – Updated by David Roberts on June 9, 2016, 9:00 a.m. ET


(Shutterstock)

(Shutterstock)

One of the fastest and easiest ways to boost renewable energy is to improve and expand electricity transmission, i.e., power lines. Smart transmission, in addition to its many other benefits, reduces both the engineering challenges and the cost of integrating renewables.

(For a recent example, check out this post on a new power line across the Midwest, which is unlocking Wyoming wind power.)

Unfortunately, the way transmission is planned today threatens to squander many of those potential benefits. Transmission planning badly needs to be reformed if the US wants to hit its ambitious carbon targets for 2030 and beyond.

I realize “electricity transmission planning” isn’t exactly a subject of fascination for most people (I wish Donald Trump would say something stupid about it!), so I’ll be brief. For the longer version, check out this new report from the Brattle Group, which I’m drawing on here.

The way we plan transmission is narrowly focused, missing important factors

Today’s transmission planning is somewhat blinkered and myopic. It:

  • usually takes place within a single region;
  • focuses on a five- to 10-year horizon;
  • focuses almost exclusively on reliability;
  • does not take into account the risks of insufficient flexibility;
  • considers only a small sliver of benefits.

To the extent there’s any interregional planning, it replicates these mistakes and makes them even worse.

This is bad. It guarantees piecemeal, incremental, uncoordinated growth in the transmission system. It misses long-term policy and technology trends and sacrifices the potentially enormous benefits of a more holistic vision.

Such a vision would take into account all the benefits of transmission. Here’s a chart!

transmission benefits(Brattle)

When all benefits are considered, it can make the difference between a project penciling out or not. Here’s an illustrative example, using the Devers-Palo Verde 2 line in California to make the point:

 

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8 Lessons for Fixing the Cities of the Future – ERIC ADAMS 06.07.16 11:35 AM.


Regulate carefully.

One of the opening sessions focused on a report from the International Transport Forum, on how governments should regulate ride-sharing services. Key takeaways: Cities should design simple, uniform, and flexible rules to govern the likes of Uber and Lyft. They can use the data these services generate—on how they impact traffic and serve consumers—to ensure those rules support public policy goals. “When we are able to use data we’re able to transition to lighter regulatory loads,” says ITF analyst Philippe Crist, compared with more complicated rules governing traditional taxi services.

International Transport Forum

Silicon Valley took heat for optimistic timelines on how new tech will transform mobility. Tesla CEO Elon Musk, for example, says fully autonomous vehicles will be ready by 2018. But it won’t make much difference if it’s not reasonably regulated or even allowed. “This is not going to happen in five years,” said Claire Martin, VP of corporate social responsibility at Renault. “You can’t get carried away with your own PR. Silicon Valley is not the rest of the world.” Some places are getting ready—Michigan and the UK, for example—but making this revolutionary tech work in the real world is gonna take a while.

8 Lessons for Fixing the Cities of the Future

 

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The New Arms Race – By Parag Khanna February 15, 2016


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In the twenty-first century, arms races are not over weaponry but over connectivity—and the United States is losing ground. At the heart of the connectivity competition is infrastructure. Between 2005 and 2012, to keep up with urbanization, rising international travel, growing trade, the dispersal of supply chains, and increased dependence on global digital services, spending on infrastructure for transportation, energy, and communications has doubled from approximately $2 trillion per year around 2005 to $4 trillion by 2012. That figure is projected to rise to $9 trillion by 2020.

With the world now crossed by a latticework of connections, the age of territorial conquest is largely over. International conflict has fallen; instead, nations compete to gain leverage in the connected world.

TIES THAT BIND

The China-led Asian Infrastructure and Investment Bank (AIIB) is one of the foremost examples of competitive connectivity. Since the collapse of the Soviet Union in the 1990s, successive waves of Chinese infrastructure investments have washed over the former Soviet States. China quickly settled border disputes (it borders more post-Soviet Central Asia republics than Russia does), put in place customs agreements, and completed multiple oil and gas pipelines from the Caspian Sea through Kazakhstan and Turkmenistan.

China has more neighbors than any country. It has tense and even hostile histories with some, and suspicions about all. But its strategy of choice was not war but roads, railways, pipelines, and other investments. China treats friends and foes alike: as construction projects to build, own, and operate.

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https://www.foreignaffairs.com/articles/2016-02-15/new-arms-race

Hands Off Haiti – By Lauren Carsick – January 18, 2016


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Why International Interference Is Hampering Recovery

Six years after Haiti’s devastating earthquake, much of its infrastructure and institutions still lie in ruins, and its democracy is now in crisis as well. After coming to power in 2011, Haitian President Michel Martelly failed to schedule elections for four years. He filled municipal posts with political appointees and has ruled by decree since parliament dissolved in January 2015, when the terms of two-thirds of the senate and the entire lower house expired. When elections finally happened in August and October, they were riddled with irregularities. Yet Martelly seated the new Parliament on January 11, and despite domestic calls to postpone the January 24 presidential runoff, he plans to move forward. But the election will be a charade: Jude Célestin, the second-place finisher in October’s first-round presidential elections, has indicated that he will not participate in the runoff, which he said “isn’t an election but a selection,” leaving the race uncontested.

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https://www.foreignaffairs.com/articles/haiti/2016-01-18/hands-haiti