$53 Trillion In Infrastructure Needed By 2030 – OECD/Oliver Wyman
$5 trillion can be saved through better risk management
NEW YORK--()
A new report released by the Organisation for Economic Cooperation and Development (OECD), written with support from Oliver Wyman, finds that countries need to invest $53 trillion in infrastructure over the next 20 years – the equivalent of three times the European Union’s $18 trillion GDP. Over $11 trillion alone will be required for ports, airports, and key rail routes.
Strategic Transport Infrastructure Needs to 2030 says that air passenger traffic could double, air freight could triple, and port handling of maritime containers worldwide could quadruple by 2030. But the report notes that most of the current gateway and corridor infrastructure could not handle even a 50% increase in demand. Other highlights from the OECD report supported by Oliver Wyman include:
- The greatest amount of investment, $17.7 trillion, needs to be made in water infrastructure, followed by $10.9 trillion in telecom.
- By 2030, roads will require $7.5 trillion in investment, while electricity will need $6 trillion.
- Asia has the most airport investment planned, at $135 billion, followed by North America at $128 billion.
- North America has the most gas supply infrastructure investment planned, at $1.7 trillion, followed by Eastern Europe at $1.2 trillion.
Alex Wittenberg, head of the Oliver Wyman Global Risk Center, comments: “Better risk management of large investment projects could free-up $5 trillion, or about 10% of total required infrastructure investments, for other purposes by minimizing cost overruns and delays."
"The potential impact of these savings could be significant for the public finances of the European Union and the United States, which are $13 trillion and $15 trillion in debt, respectively. However, with government deficits in OECD countries running at $3 trillion, innovative structures and public-private partnerships will need to be constructed to make these much-needed infrastructure investments,” Wittenberg adds.
Another OECD report developed with support from Oliver Wyman, Pension Funds Investment in Infrastructure, recommends that institutional investors in OECD countries, with $65 trillion in assets, could help finance long-term, productive activities that support sustainable growth, such as transportation infrastructure projects. The report estimates that less than 1% of pension funds worldwide are invested in infrastructure projects.
Complete details about Oliver Wyman’s approach to risk identification and mitigation, along with other Oliver Wyman infrastructure-related reports and events, are available at http://www.oliverwyman.com/pension-funds-infrastructure-investments.htm.
About Oliver Wyman
Oliver Wyman is a global leader in management consulting. With offices in 50+ cities across 25 countries, Oliver Wyman combines deep industry knowledge with specialized expertise in strategy, operations, risk management, organizational transformation and leadership development. Oliver Wyman is a wholly owned subsidiary of Marsh & McLennan Companies [NYSE: MMC]. Follow Oliver Wyman on Twitter @OliverWyman.