U.S. could copy Canada's infrastructure model: Caisse

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[December 06, 2016] By Matt Scuffham

NEW YORK (Reuters) - Incoming U.S. President Donald Trump could set up an entity similar to Canada's infrastructure bank to help fund his plans to spend $1 trillion on roads and bridges, one of the world's biggest infrastructure investors said.



Michael Sabia, chief executive officer of the Caisse [CDPDA.UL], Canada's second-biggest public pension fund, was on the advisory panel that recommended Canada set up an infrastructure bank with an aspiration to attract C$4 to C$5 for every C$1 of public funding for infrastructure projects.

He said a similar entity could be set up in the United States to address issues around how it approaches public-private partnerships, a lack of project management experience, the absence of a pipeline of major projects and the need for predictable decision making at a political level.

"Attention has got to be paid to that dimension of it or you're not going to see institutional investors like us having a significant appetite to be able to do things," Sabia said in an interview on Monday.

Trump has said he plans to spend $1 trillion over 10 years on building infrastructure, financing the rebuilding of the country's roads, bridges and transport systems by attracting investment from private institutions.

However, the United States is seen by infrastructure investors as lagging behind countries such as Canada, Australia and the United Kingdom in the way it structures infrastructure projects to attract private capital.

Canada's Liberal government is in the process of setting up the new infrastructure bank, which it wants to have up and running next year. It is courting foreign investors as well as the major Canadian funds and Prime Minister Justin Trudeau has said he is happy to go head-to-head with the United States to compete for investment.

Sabia said the Caisse would wait and see what the new U.S. administration will do before making investment decisions.

"We need to see, once the administration is in place, what policies it pursues and what is actually done because it's actions that count much more than words," he said.

Sabia, who has been chief executive of the Caisse since 2009, said the Caisse had substantially increased its exposure to the United States over the past five or six years.

"The United States is the largest economy in the world and I think we're always going to be able to find opportunities to do things there which meet our and our risk criteria," he said.

(Reporting by Matt Scuffham; Editing by Lisa Shumaker)

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