New York governor Andrew Cuomo plans to replace the rickety Tappan Zee Bridge and is looking at the possibility of using private union pension money to fund the rebuild, a $5.2 billion undertaking.
The governor expressed these developments on a recent Fred Dicker’s radio programme in Washington D.C.:
“We’re exploring using union – private union pension funds as a financing vehicle. Meaning what? Meaning labour unions finance projects all across this country. And labour unions – especially in the construction trades – could have a self-interest in seeing large-scale construction projects [that are] good for the state, but also employ members of their union. So if they’re investing their pension funds, might they be interested in investing in a project in their state that creates jobs? And the answer is yes,” he said.
The Tappan Zee Bridge spans the Hudson River in New York State and connects Rockland and Westchester counties along Interstate 87, which also links New York to Canada. The bridge is in need of urgent repair and governor Cuomo has made the leap from scheduling major renovations to the bridge – which opened to traffic more than half-a-century ago – to replacing the landmark. The bridge carries some 138,000 vehicles daily.
Pensions are increasingly being called upon globally to increase their exposure to infrastructure financing now that banks – long the market’s go-to source of finance – are deleveraging and under threat from Europe’s sovereign debt crisis.
On Tuesday, the UK government unveiled a £250 billion (€293 billion; $390 billion), decade-plus infrastructure plan and signalled that it had engaged several pension fund associations to establish a framework that will allow these institutional investors to play a larger role in financing UK infrastructure.