Julio Herrera Velutini on Private Banks' Role in U.S. Infrastructure

• The U.K. Model: Public-Private Partnerships (PPPs)

The United Kingdom has successfully used PPP agreements to fund infrastructure projects such as Crossrail and high-speed rail networks. The involvement of the private sector in planning and implementation has resulted in more efficient completion of these projects.

• Australia's Infrastructure Funding Approach

Australia relies largely on private funding to fund infrastructure projects. The Sydney Metro project, one of the greatest train infrastructure projects in the Southern Hemisphere, received partial funding from private banking firms.

• Singapore's Asset Recycling Strategy

Singapore has pioneered an effective model where the government sells or leases existing infrastructure assets to private investors, then reinvests those proceeds into new priority infrastructure projects. This approach has enabled Singapore to fund its extensive public transportation network and world-class airport facilities while maintaining high service standards through carefully structured contracts with private operators.

• Chile's Concession System

Chile has developed a sophisticated concession model where private companies compete to build, operate, and maintain infrastructure through long-term contracts with guaranteed minimum revenue arrangements. This approach has transformed Chile's transportation network, with over 4,000 km of highways and numerous airports developed through private investment while protecting investors from demand risk.

• South Korea's Special Purpose Vehicle (SPV) Framework

South Korea has successfully implemented SPVs that bring together public institutions, private investors, and pension funds to finance major infrastructure developments. This model was instrumental in developing Songdo International Business District, a smart city built on reclaimed land. The SPV structure enables risk sharing while providing stable long-term returns for institutional investors like the National Pension Service.

"Countries that integrate private capital into infrastructure funding complete projects faster and more cost-effectively," notes Julio Herrera Velutini.

Julio Herrera Velutini proposes three critical reforms to strengthen private banking's role in US infrastructure development:

• Expand Public-Private Partnerships (PPPs) – To distribute financial risk and increase project efficiency.
• Create Incentives for Private Infrastructure Investment – Through tax credits and reduced regulatory barriers.
• Establish a National Infrastructure Investment Bank – To facilitate collaboration between government agencies and private financial institutions.

"A structured approach to private banking in infrastructure can help the U.S. modernize its roads, transit systems, and energy networks at a faster pace," says Julio Herrera Velutini.

This graph compares publicly funded and privately funded infrastructure projects based on efficiency scores (out of 100) and average completion times (in years).

Private infrastructure funding can significantly improve efficiency and reduce delays, ensuring faster modernization of roads, bridges, and transit systems while easing the burden on public funds.

Julio Herrera Velutini believes that private banking may transform infrastructure development in the United States by providing alternative funding choices that decrease public burdens while guaranteeing that vital projects proceed without unnecessary delays. By strengthening public-private partnerships, stimulating private capital investment, and building a national infrastructure investment framework, the United States can position itself for long-term economic growth and stability.