Norman Anderson is the President & CEO of CG/LA Infrastructure, a Washington DC-based think tank specializing in infrastructure projects. In an interview with the AJOT that comes shortly after the release of the CG/CL’s 2014 Top 100 North American Infrastructure Projects, Anderson talks about country clusters and the need to provide the economic support for US exports and enterprise.Norman Anderson – President & CEO of CG/LA InfrastructureAJOT: How did you [CG/LA Infrastructure] decide on the Strategic Top 100” projects [the CG/LA annually publishes the Strategic Top 100 infrastructure projects globally and the Strategic Top 100 infrastructure projects in North America]? Norman Anderson: What is really important from our point of view is that people start to think in terms of what their priority projects are. Otherwise there are too many projects out there. It takes an average of 9 1/2 years from concept to shovel in the ground in the US to get a project going. The Top 100 are projects we believe are going to offer business opportunity in the next three to twelve months. That’s the definition of what we are doing. We want to make a contribution on two sides: one is so people that come to the event [the forums held by CG/LA Infrastructure] get to see real projects, and also for us to make a contribution to the quality of the project selection around the US as these contribute to competiveness, job creation and overall economic productivity.
AJOT: In looking over the stats for the 2014 Strategic Top 100, there seems to be a heavier emphasis on rail projects of all type [heavy, light, metro, high speed etc.] than we’ve read in prior reports. Is that so?
Anderson: It could be. We are doing two things this year that are a little different [from previous years]. One of them is that we are really focused on the idea of export corridors, figuring and identifying projects that are going to help the US export more.
We’ve got the whole ACE [Agriculture-Capital Goods-Energy] thing going on. The energy explosion is reversing the trend (by increasing exports). We [USA] spent 25 years importing as much out of China through (the ports of) LA and Long Beach as we possibly could.
Now we’ve gone through a transition where we want to figure out how to export more. But we [USA] are not organized to export more. A good example is the Mississippi River, which no longer is a reliable transportation avenue. One of the things we are trying to look at is how to rebuild and revitalize those linkages so we can do a better job of exporting.
AJOT: What new trends do you see in the global infrastructure project sector?
Anderson: I was in the Middle East last week and certainly you see a tremendous amount of activity throughout the Middle East in infrastructure projects…and in Turkey as well. There is a high incidence of project announcement to project bids, wins and closes. Asia not so much, Latin America not so much. The places we see real activity are the Middle East and US. The US is really a super port in a storm.
We also tend to break the group down by sector if we’re advising people about their opportunities. We see energy as a big part of infrastructure investment. We don’t just look at transportation as part of “infrastructure”. And energy projects are a huge driver everyplace in the world right now.
The [project] market is very significant. And US companies aren’t participating nearly as much as we’d like to have them. I just wrote a paper for the Senate Foreign Relations Committee, which is shortly going to hold hearings with a focus on how do you get US agencies to support US companies when other countries do a pretty good job of supporting their companies in places like Africa, Latin America and Middle East. Just think of the Chinese, the Japanese, Koreans and Brazilians. By that candle, we [the US] don’t measure up to other countries in supporting our own companies’ efforts.AJOT: What about the EXIM Bank?
Anderson: It’s a little bit crazy. It is [the process] just so long and so inefficient and they want to close down EXIM Bank. But EXIM should be providing the equity, even if it’s just conditional. If you win the bid, we’ll [EXIM] finance the project. Every other country does that. Our companies don’t have the balance sheet to take the risk without someone back stopping them.
AJOT: How do you think US companies can compete globally in the project sector?
Anderson: One of the things I’ve been thinking about for awhile is what are the pieces of the US infrastructure business that are globally competitive. Actually we don’t want to build highways in Latin America. There are groups better placed to do that business. What we want to do is logistic. We want to do anything that has to do with energy for sure, water as well. We really can’t do mass transit, because we really don’t build mass transit vehicles anymore. But freight rail and logistic pieces are fantastic.
AJOT: In your Strategic Top 100, you make reference to “country clusters”. What do you mean?
Anderson: What’s really interesting is Porter’s [‘Porterian cluster’ - Michael Porter, Competitive Advantage of Nations, 1990] original idea of shoemakers in Northern Italy. Basically, it [the shoemaking cluster] was founded on familiarity, proximity and trust.
‘I know these people. I can come up with a design. I trust these people and I can work with these people. We can put it [the product] together quickly.’
That’s what happens with the Chinese and Singaporeans and to some extent with the Brazilians and others. The engineering and construction companies are very close to the finance people and very close to the public policy makers. So they [collectively] really understand each other’s moves.
You are big builders and you tend to build these projects quickly… not these one off projects… A good example is when Spain was blowing and going. They [Spanish engineering and construction firms, policy makers and finance people] knew each other, trusted each other were really comfortable doing business with each other and could make quick decisions to get things going.
All of sudden with these relationships, these clusters, that kind of speed [in doing business] becomes normal. That’s what we need to have in the US.
Here’s an example. A couple of years ago I was in Omaha, Nebraska speaking to executives at a company about exporting to Latin America. I assumed they were exporting out of the US factories. Do you use US EXIM? They said ‘no way’ and told me their business was China to Latin America. The executives explained that they tell the Chinese version of EXIM that they want to export to Latin America and have an order. They [Chinese EXIM] show up at the factory the next day. We [the company] fill out some forms and we’re done. Our EXIM makes us go through this tortuous process and we may or may not get a deal done. It takes two or three months and we never know [where we stand].
That’s a nice way to talk about the workings of clusters. Everything here [US] is long distance, slow and full of mistrust. In cluster countries everything is proximity, full of trust and with repetitive successful experiences comes the ability to work incredibly fast.
