{"id":525,"date":"2012-06-01T12:10:32","date_gmt":"2012-06-01T12:10:32","guid":{"rendered":"http:\/\/www.thebizsense.com\/views\/?p=525"},"modified":"2012-06-01T12:12:09","modified_gmt":"2012-06-01T12:12:09","slug":"resources-for-maintenance-replacement-expansion","status":"publish","type":"post","link":"https:\/\/www.thebizsense.com\/views\/investments\/resources-for-maintenance-replacement-expansion","title":{"rendered":"Resources for maintenance, replacement, expansion"},"content":{"rendered":"

Scarcity of resources for maintenance, replacement, expansion<\/p>\n

\"Investing<\/a>

Investing in Infrastructure<\/p><\/div>\n

There are also lots of goodie-goodie public relations opportunities in being seen as major promoters of social goods such as roads, railways, airports, schools, hospitals, power and water services.<\/p>\n

In 2009 CIBC World Markets forecast that over the next 20 years global investment in infrastructure would reach $35 trillion.<\/p>\n

A handful of countries have over-invested in infrastructure \u2013 Japan, China and Spain come to mind. But in most nations there are huge backlogs.<\/p>\n

Governments skimped on maintenance, replacement and expansion needs so they could divert resources to growing (underfunded) welfare benefits, saving mega-banks and zombie mega-companies from collapse, fashionable trivia of the chattering classes such as renewable energy, and the odd war or two.<\/p>\n

One example is the US, where the network of water pipes, more than a century old, is in such disrepair that in 2006 more than 3\u00bd million people fell ill from escherichia coli poisoning and from toxins released from over 40,000 sewage spills, according to that nation\u2019s Environmental Protection Agency.<\/p>\n

Both political and economic factors support the prospect of increasing focus on developing infrastructure over the next decade or two.<\/p>\n

However, from an investor\u2019s point of view, it is important to bear in mind that infrastructure is a broad church. Many reasons explain why some specialist funds and companies in the sector offer yields as low as 2\u00bd per cent, others as high as 10-plus per cent.<\/p>\n