Over the long term, however, the Authority is projecting cargogrowth at the port, and is making investments in express rail andother infrastructure to support this growth. "Despite thechallenging economic environment, the Port Authority's facilitiescontinue to outperform other major ports in North America, withcontainer volume at the top 10 ports in North America declining byan average of 5% in 2008," says Scott K. Perkins, managing directorof corporate services at NAI Hanson.

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In addition, the Port Authority reports that its $246-millioninvestment last year is helping to support more than 230,000jobs.One of the biggest challenges the port faces in the comingyears is its inability to accommodate larger container ships,particularly those that will enter through the Panama Canal in 2014when its expansion is complete.

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The Bayonne Bridge, which stands 151 feet over the Kill Van Kulltidal straight at its highest point, is too low to accommodatethese ships. "In addition to dredging the waters to a 50-footdepth, the Port of New York and New Jersey announced last year thatthe raising or replacing of the Bayonne Bridge could be upwards of$2 billion," Perkins tells GlobeSt.com. "The bridge is the largestobstacle facing growth in the port," says Richard Larrabee, thePort Authority's port commerce director.

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The Authority expects to complete a study by next summer on howto deal with the issue. Perkins tells GlobeSt.com that some of thepreliminary discussions have involved replacing the bridge with atunnel under the Kill Van Kull.

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The ports here have also taken a hit from auto industry turmoil.According to Kenneth D. Lundberg, senior vice president, NAIHanson, the downturn in the economy has slowed the import offoreign cars through the port. "In addition to affecting the portsdirectly, it has impacted some of the specialists who import andprep cars for third parties," he says. "These third party groupsare some of the largest lessors of ground space from the PortAuthority, and due to the downturn their needs for land havedecreased." The end result is a decrease in revenues for the PortAuthority.

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On a more positive note, Lundberg predicts that the ports willsee an increase in both imports and exports in the long term."While the current recession has caused a decline in activity, thepopulation will continue to grow, consumer demand will rebound andoverseas manufacturing will increase," he says. "As the largestconsumer market in the world, we can expect product to continue toflow to the US. On the export side, the economies of manydeveloping countries are maturing, thus creating demand forUS-based products, which will flow outbound through the ports."

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But just how equipped are we to handle this increased capacity?According to the Urban Land Institute's 2009 Infrastructure Report,done in conjunction with Ernst & Young, and authored byJonathan Miller, partner and co-owner of Miller Ryan LLC in NewYork City, the country's major ports and international airportsneed upgrading to meet standards set by facilities in other worldmarkets. In short, he adds, "the nation must refashion its freightnetworks serving ports and airports and finally enter the age ofhigh-speed rail, which could help reduce road and airportcongestion."

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But creating wider freight corridors through ports in urbancenters could take decades without convincing leadership andadequate compensation for property owners. "Incentives will benecessary to forge regional and local consensus for where to locatemass transit lines and stations," Miller tells GlobeSt.com.

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However, there will likely be pushback from residents affectedby infrastructure improvements. A case in point, the Britishgovernment recently approved a multi-billion dollar proposal tobuild a third runway at Heathrow, which would allow 125,000 moreflights to take off and land each year. "Heathrow, one of theworld's busiest airports, approaches 100% capacity," Miller says,"and small delays can disrupt airport schedules throughout the dayand back up flights at other airports."

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But the Heathrow project points to problems with expanding keyairports, freight corridors, and port facilities in majormetropolitan areas. "An entire village, including 700 homes, willbe razed in constructing the new runway and area residents aredetermined to fight the project," Miller relates.

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Dissension aside, decongesting America's gateway ports andairport hubs could create opportunities for new inland distributioncenters. "Through railroad and truck corridors, imported goodscould be transported from the primary east and west coast ports tomajor transfer points in less densely populated areas at keyinterstate and railroad crossings," Miller says. "These strategiescould reduce the need for expansive industrial space in crowdedresidential metro areas that surround key ports and create new jobsand industry for strategically located interior cities, which mayhave lagging prospects because of declines in manufacturing oragribusiness employment." Centrally situated cities--likeHarrisburg, PA; Columbus, OH; St. Louis, MO; Chicago; Kansas City,MO, and Salt Lake City--may be well-positioned to fill the need forfacilitating increasingly complex cross-country shippinglogistics.

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Not coincidentally, Miller says, federal spending oninfrastructure has been reduced over the past three decades againsta backdrop of rhetoric to shrink government and reduce taxes sothat individuals have more to spend for themselves. "Investmentsuccess, meanwhile, has been predicated on short-termprofit--trading and flipping assets--rather than on long-term gainsfrom patient outlays." He adds that when the economy eventuallyrecovers and the government is left with yawning deficits,officials must stand firm and avoid back-burning infrastructurespending.

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Like the US, Canada has lagged in infrastructure investmentsince a 1950s/'60s spending surge. "But while the US has dithered,Canadians have come to recognize liabilities to continuedunder-funding and in recent years have jump-started nationalinitiatives to revamp road, transit and water systems, working inconcert with provincial and municipal governments and the privatesector," Miller explains.

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Not only do substantial federal government gas taxes--just under40 cents per gallon--support the Building Canada Plan enacted in2007, but Ottawa has also embraced initiatives to transform thecountry into a leader for public/ private partnerships.

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Fortifying about $26.5 billion in direct federal fundinginitiatives for infrastructure, Canada looks to jump-startpublic/private financing ventures, including establishing apublic/private partnership fund and a federal office, PPP CanadaInc., to help local governments engage private partners. Accordingto Miller, the Canadian approach offers guidance for marshallingfederal programs to work with state and local governments in a moreunified effort to tackle infrastructure planning and funding on anational basis.

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No doubt, appropriately structured public/private partnershipscan provide significant funding and management expertise forgovernments grappling with maintaining deteriorating infrastructuresystems and desperately needing sources of capital. But fundmanagers readily agree that "we are not the panacea" and realizegovernment needs to supply overall direction for infrastructurepolicy, planning, and strategy. "In reality," Miller says, "theycan only be positioned to operate parts of overall systems. Even inthe UK, where PPPs were initiated more than 20 years ago, onlyabout 15% of public infrastructure is privately managed."

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