At the beginning of 2009 I wrote, more than once, about the value of being involved in infrastructure projects. Adherents to the Keynesian idea that you can buy your way out of a recession through government investment will know why.
It seems the same may be true of 2010, as announcements of infrastructure projects are once again being heralded. Just last week CW reported the Dubai’s 2010 budget will have an infrastructure focus.
The estimated spend on the economic sector, infrastructure and transportation is US$4.75 billion. The estimated allocation of expenditure for the development of infrastructure project is US $2.91 billion.
Saudi too has announced a 16% increase in total project spending, laying out a plan to plough US $70 billion into construction projects during 2010, in an effort to attain a 4.5% economic growth rate within the year.
Contractors who get a slice of this action may be able to keep the wolf from the door for a year or two more, assuming they successfully collect payment.
While the numbers are hefty, it’s important the money goes to the right places if it is to support real and sustainable growth. Growing cities need roads, transport infrastructure and solid municipal services if citizens are going to be attracted and retained.
Emerging cities don’t need vanity projects, or fanciful images of ‘future plans’. Leaving those to the private sector will let market forces determine their viability. It will also leave real money for real work.