Countries across the globe are struggling with sagging infrastructure (roads, bridges, railways, wastewater systems, etc.) that are in dire need of upgrades and replacement.
But as global and regional economies attempt to regain their financial footing and governments are strained by rising deficits, many countries, provinces, and municipalities are having a difficult time pulling together the capital needed to fund these projects.
In light of these challenges, government and other officials in both developed and developing countries can use a variety of data sources and analytics tools to tackle infrastructure requirements in a number of different ways.
For instance, decision-makers for emerging economies can analyze government data regarding transportation bottlenecks as well as the current capacities and restrictions of water, power, and other utilities that may be limiting opportunities for business investment and growth.
Providing these types of insights to organizers in the public and private sectors can help decision-makers better understand and prioritize the types of investments that will generate the greatest economic returns (e.g., upgrading electricity infrastructure in cities to attract business expansion).
Governments are increasingly relying on public/private partnerships and public concession models to help finance and build infrastructure projects, according to a report by the Urban Land Institute and Ernst & Young.
Large sovereign wealth funds and institutional investors are “tentatively warming” to the potential for reliable returns on infrastructure investments, according to the report. Still, investors continue to worry about the reliability of government partners, deal structures, and the viability of certain investments.
One way to address these types of concerns is by using data and analytics to devise new financing models.
For example, Texas has opened a toll road that utilizes a unique approach to financing. The toll road, SH 130, was designed and built by a private consortium that also agreed to operate and maintain it for 50 years in exchange for a portion of the toll revenues.
Big data analytics can be used by decision-makers to develop models that can project what the anticipated toll revenues will be and to assess the risks and rewards of utilizing this type of funding model.
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