President Biden's $1.2 trillion infrastructure legislation delivers huge government funding but will it fix all of the problems that have dogged U.S. infrastructure in recent decades?

“This is the biggest infrastructure spending bill since the Great Depression and will enable historic investments in core infrastructure,” said Mona Dajani, global co-head of Energy and Infrastructure Projects at Pillsbury.

“We in the U.S. are woefully behind Europe and Asian countries such as Japan and South Korea on infrastructure investment, and it has needed to be addressed for a long time,” she added.

The funding this infrastructure bill will provide has been widely welcomed by investors, developers and advisers working in the sector. Yet the federal government has little control over the delivery of major infrastructure projects, and it is not guaranteed that government funding will catalyze the substantial private investment needed to deliver them.    

There is also a risk that Republican-run areas will be less enthusiastic in using the funds, particularly while a Democrat remains in the White House.

Dajani accepts this risk but argues that “you will never get something that 100% of people are happy with. I am confident that this bill with bring the U.S. together more than it creates fissures.”

This bill is just part one of an intended two-part Build Back Better Act, but the second $1.75 billion section is subject to greater political opposition. Its funding would go towards a range of social programs as well as supporting renewable energy projects through tax credits. A House vote has been delayed until the Congressional Budget Office has scored this part of the legislation.

Dajani says this second part is “perhaps even more critical” to the U.S. economy than the infrastructure bill, given how important it is to stimulate investment in renewable energy and the energy transition.

Read the full article here.