Infrastructure Finance

NEIL S. GRIGG is professor of civil and environmental engineering at Colorado State University. He has worked as professor, administrator, and consultant in the fields of infrastructure engineering and management, water resources engineering, urban water systems, and public administration of infrastructure facilities and environmental regulatory programs. Grigg is a registered professional engineer in Colorado, Alabama, and North Carolina. He has served as a consultant for many government organizations, including the United Nations agencies FAO, UNDP, and UNESCO.

• Preface xiiiAcknowledgments xviiCHAPTER 1 An Introduction to Infrastructure Finance 1What Is Infrastructure Business? 1Infrastructure Then and Now 3A System of Systems 7Sector Structure and Size 9Estimating the Per Capita Cost 11Need for New Approaches 11Summary 13PART ONE Infrastructure Sectors and InvestmentsCHAPTER 2 Models of the Infrastructure Sectors 19Classification System 19Infrastructure and Service Organizations 22Business Models of Infrastructure Subsectors 24How Infrastructure Systems Serve the Built Environment 26Matrix of Owners and Users of Infrastructure Systems 27Infrastructure and Services: Structures and Equipment 28Infrastructure Support Sector 30Summary 33CHAPTER 3 Infrastructure and the Constructed Environment 37Land Uses in the Built Environment 37Growth and Change in Urban Areas 39Financial Assets in the Built Environment 45Housing Finance as an Engine of Development 47Commercial and Central City Development 55Impact Fees and the Growth-Pays-Its-Own-Way Philosophy 58Future Cities and Infrastructure 60Summary of Issues and Outlook 62CHAPTER 4 Transportation Sector 65Sector Structure and Size 65Road and Highway Systems 69Mass Transit Systems 79Air Travel and Airports 84Intercity Rail Systems 87Intercity Bus Transportation 90Water-based Transportation 91Pipelines 92Sector Issues and Outlook 92CHAPTER 5 Telecommunications Sector 97Why Telecommunications Is an Infrastructure Sector 97Then and Now 99Sector Structure and Size 100Internet 102Telecommunication Companies 102Sector Issues and Outlook 104CHAPTER 6 Energy Sector 109Sector Structure and Size 109Energy Trends 114Electric Power Industry 116Natural Gas Industry 119Petroleum Industry 121Coal Industry 122Nuclear Power Industry 124Renewables 126Energy Storage 127Hydrogen Energy 129Sector Issues and Outlook 129CHAPTER 7 Water and Wastewater Sector 135Then and Now 135Sector Structure and Size 137Financial Framework of the Sector 141Financial Issues 144Business Profiles 145Water Industry Support Businesses 149Privatization in the Water Sector 152Investing in Water as a Commodity 154Industry Policy and Regulation 154Coordination in the Water Sector 155Sector Issues and Outlook 156CHAPTER 8 Waste Management Sector 161Sector Structure and Size 161Categories of Solid Wastes 162Recycling and the Materials Industry 169Sector Issues and Outlook 170CHAPTER 9 Infrastructure and the Construction Industry 173Then and Now 173The Construction Industry Today 175Organization of the Industry by Function and Sector 179Organization by Business Lines 180Project Delivery and Finance 182Construction Companies 185Sector Issues and Outlook 191CHAPTER 10 Investor and Business Opportunities in Infrastructure 193Then and Now 193Bond Market 195Stocks of Infrastructure Companies 198Infrastructure Funds 206Infrastructure Indices 210Commodity Markets 212Mortgage-backed Securities 213Private Equity and Infrastructure 213The Infrastructure Support Sector 214Infrastructure Investment Media 214Corruption in the Infrastructure Business 215International Spending Plans 216Investment Issues and Outlook 216PART TWO Financing InfrastructureCHAPTER 11 A Scorecard for Infrastructure Performance 223Tracking Infrastructure Performance 223What Systems to Measure? 225What Are the Performance Standards? 226How Much Do They Cost? 230How Ready Are They to Perform? 230Financial and Economic Data on Infrastructure 234Infrastructure Scorecard 239Summary 243CHAPTER 12 Financial Models for Infrastructure Organizations 245General Management Model 246General Financing Model 248Sector Financing Models 251How Governments Can Improve Infrastructure Performance 255Public-Private Partnerships 260Regulation 262Summary 262CHAPTER 13 Capital Markets for Infrastructure 265Capital Requirements of Sectors 265Capital Flows of Infrastructure 267Capital Structure of Infrastructure Sectors 268Sources of Capital 271Investment Banking 283Summary 284CHAPTER 14 Revenues for the Infrastructure Sectors 287Flow of Revenues 287Rate-Setting for Infrastructure-Based Services 289Rate Regulation 293Revenue and Cost of Service Analysis 296Tax Revenues and Subsidies 297Infrastructure Revenue by Sector 299Summary 299PART THREE Toward the FutureCHAPTER 15 Opportunities and Risks for Infrastructure 303Infrastructure as a Policy Sector 303Infrastructure Policy Elements 304Sector Issues 306Transformational Issues 307APPENDIX A Data Sources 315APPENDIX B Infrastructure Companies 317APPENDIX C Acronyms 321References 327About the Author 341Index 343