Credit Suisse recommended US policymakers increase funding for national programmes that attract private-sector investment in infrastructure as a means of closing the nation's financing gap.
In a report detailing ways for Congress and the executive branch to encourage investment in the US's ageing infrastructure, the investment bank said it would take $3.6 trillion of investments to bring infrastructure development “up to adequate levels” by 2020.
The report comes as US president Donald Trump and other politicians debate how to finance the growing infrastructure finance gap. Trump has pledged to invest $1 trillion in infrastructure, with $200 billion coming from government funding and the rest from the private sector.
Credit Suisse recommended the creation of a national programme that increases knowledge sharing and best practices on infrastructure financing, as well as a pipeline of investable projects. It also called for President Donald Trump's administration to expedite approval process for projects, especially those considered 'shovel ready'.
Unofficial project pipelines have been created since Trump took office like a list of 26 pending priority infrastructure developments a group of trade unions sent Trump in March. Projects on the list include gas pipelines, bridge replacements and wind and solar farms totalling close to $90 billion in investment.
Credit Suisse also called for federal action to encourage state and local governments to consider privatisation or use of P3s. The bank said that privatising existing infrastructure could be a way to recycle capital into new projects, allowing for investment in new greenfield projects.
Noting several infrastructure projects financed without government support that eventually filed for bankruptcy, such as Denver's E470 and the Texas's SH130 toll roads, Credit Suisse called for expanded loan and guarantee programmes to “underpin private sector involvement”.
And finally, Credit Suisse said infrastructure investments can be bolstered by providing more support to federal initiatives already in operation. The report said Congress should increase the cap on Private Activity Bonds and expand the Transportation Infrastructure Finance and Innovation Act.
“There is clearly a need to rebuild America's infrastructure,” said Credit Suisse's head of public policy global markets Joseph Seidel. “While increased government investment would help, given the constraints on public spending private sector investment is needed to fill the funding gap.”