SOURCE: CG/LA Infrastructure

March 27, 2008 07:00 ET

Global Infrastructure Demand through 2030 Study Released by CG/LA Infrastructure, in Association With Sterne Agee

"Estimated Global Demand of $24 Trillion to $30.5 Trillion Through 2030"

WASHINGTON, DC--(Marketwire - March 27, 2008) - CG/LA Infrastructure, in association with Sterne Agee, today released estimates for global infrastructure demand, 2008-2030. "Overall we see a very strong Long Boom in infrastructure demand," according to Norman F. Anderson, President & CEO of CG/LA Infrastructure, "with between $24 trillion and $30.5 trillion invested in new plant and equipment worldwide during the period." The study -- "Effective Demand in the Global Infrastructure Marketplace; Building the Next Generation's World" is anchored analytically on a global projects database, and will be available on April 30th.

Key findings include:

--  Weakness in the US infrastructure market, because of significant
    issues with the policy and financing model -- such that overall
    competitiveness is significantly threatened unless investment levels can be
    dramatically increased from a current level in the range of $150
    billion/year to over $300 billion;
--  A general recognition that China is the #1 country in the world for
    infrastructure investment, at nearly $200 billion per year -- but with
    looming problems in electricity generation and clean water provision that
    raise questions about the country's ability to maintain these investment
    levels;
--  Uncertainty in the emerging markets of Latin America, Asia and
    especially Africa because of significant problems in project origination
    capacity -- projects tend to take a long time to develop, and they tend to
    be short-lived public works initiatives rather than long-term, strategic
    projects.
    

Global Macro-Regions for Infrastructure Project Creation:

Effective Demand in the Global Infrastructure Marketplace structures the global marketplace in terms of eight distinct regions, each with its own project creation and investment dynamic:

1. North America ($180 billion/year) - The region, including Canada and
   Mexico, averages only $180 billion in investment throughout this
   period.  This is a significant investment, because this is only about
   50% of the $300 billion annual investment required for the region to
   increase competitiveness.
2. The Expanded EU ($305 billion/year) - The EU, with Accession Countries,
   has a well-developed infrastructure vision, and an investment structure
   in place that is manufacturing the right projects -- the region is
   becoming an infrastructure power.
3. Africa ($10 billion/year) - The infrastructure crisis in Africa is
   severe, and there is no evidence of anything on the horizon to change
   this fact.  The region needs to invest, in the right projects, at more
   than five times its current rate.
4. Middle East ($56 billion/year) - The region is famously on the
   infrastructure move, and although activity is poorly distributed across
   this wide swath of land, from Morocco to Iran, a number of projects --
   and country visions -- are world pace setters.
5. Latin America ($45 billion/year) - Latin America shows very uneven
   infrastructure investments, tilting toward ports & logistics and away
   from quality of life infrastructure like highways and water/wastewater.
   The region's investment in good projects should be three times the
   current level.
6. Russia/FSU ($56 billion/year) - Russia and the region of the former
   Soviet Union are beginning to use oil and gas revenues to invest
   heavily in infrastructure. Currently focused around St. Petersburg,
   Moscow, and Sochi -- site of the 2012 Winter Olympics -- the region
   will yield strong opportunities in the coming years.
7. China ($200 billion/year) - The #1 country for infrastructure
   investment globally, outstripping the US -- as well as Japan, the UK and
   Germany combined. China, however, will have trouble sustaining these
   levels, given looming problems in water, power generation and the
   requirements of hinterland growth.
8. Non-China Asia ($200 billion/year) - A region of enormous contrasts,
   extending from Australia to India, perhaps the outstanding feature is
   the out-performing Australian market, that is driving new financing
   models around the world, coupled with chronically under-performing
   India, mired in bureaucratic friction.

The study not only looks at countries and regions, but also breaks out spending by sectors. Globally in 2008 sector spending will be the following: Water/Wastewater investment will be $2.4 trillion, although overall demand is two to three times that level; power investment will be in the range of $7.2 trillion, with significant plant and fuels inflation; the world's transport investment this year, from ports and rail to urban mass transit, will be just over $9 trillion; and new telecoms investment will be $5.4 trillion.

"The North American findings are particularly troubling," according to Anderson, "lacking a modern and dynamic financing model competitiveness in this region will continue to decline, immigration problems with Mexico will multiply, and the ability of the US to create and support firms capable of participating in global infrastructure's Long Boom will be weakened."

About CG/LA Infrastructure LLC: CG/LA is a twenty-one year old firm that focuses on infrastructure project strategy and development, globally. The firm also operates the Latin American Leadership Forum, now in its sixth year (featuring the Top 50 projects in Latin America, April 1-3 in Miami); and the Global Infrastructure Leadership Forum, now in its second year, (featuring the Top 100 global projects, December 11-12 in Washington). For more information see: www.cg-la.com

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