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Report: Needed water supply infrastructure will cost over $1 trillion
Denver, CO, United States (AHN) – A new report has found that the cost of repairing and expanding drinking water infrastructure in the United States will exceed $1 trillion in the next 25 years.
In addition, the groundbreaking study by the American Water Works Association found that expense will likely be met primarily through higher water bills and local fees. The cost of needs will double from around $13 billion a year now to roughly $30 billion (in 2010 dollars) per year by the 2040s.
AWWA is an international nonprofit scientific and educational society that focuses on the improvement of drinking water quality and supply.
The organization analyzed many factors for its new report, titled “Buried No Longer: Confronting America’s Water Infrastructure Challenge.” Those factors included the timing of water main installation and life expectancy, materials used, replacement costs and shifting demographics. AA
AWWA found that needs in the U.S. are nearly evenly divided between replacement and expansion requirements.
“Because pipe assets last a long time, water systems that were built in the latter part of the 19th century and throughout much of the 20th century have, for the most part, never experienced the need for pipe replacement on a large scale,” the report states. “The dawn of an era in which the assets will need to be replaced puts a growing stress on communities that will continue to increase for decades to come.”
“The needs uncovered in ‘Buried No Longer’ are large, but they are not insurmountable,” said AWWA Executive Director David LaFrance. “When you consider everything that tap water delivers-public health protection, fire protection, support for the economy, the quality of life we enjoy-we owe it to future generations to confront the infrastructure challenge today.”
Although the world has as much water now as it did thousands of years ago, only about 1 percent of the world’s water is available for human needs, including personal, agricultural and manufacturing. Almost 97 percent of the world’s water is saltwater or brackish and another 2 percent is locked away in glaciers and ice caps.
Key findings from the report include:
- The needs are large. The cost of replacing pipes at the end of their useful lives will total more than $1 trillion nationwide between 2011 and 2035 and exceed $1.7 trillion by 2050.
- Household water bills will go up. Although water bills will vary by community size and geographic region, for some communities the infrastructure costs alone could triple the size of a typical family’s bill.
- There are important regional differences. The growing national needs affect different regions in different ways, with growth concerns greater in the South and West and replacement concerns greater in the Northeast and Midwest.
- There are important differences based on system size. As with many other costs, small communities with fewer people to share in the costs face the biggest challenge.
- The costs keep coming. Infrastructure renewal investments are likely to be incurred each year over several decades. For that reason, many utilities may choose to finance infrastructure replacement on a “pay-as-you-go” basis rather than through debt financing.
- Postponing investment only makes the problem worse. Postponing infrastructure investment in the near-term would raise the overall cost and increase the likelihood of water main breaks and other infrastructure failures.
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Clock ticking for Egypt’s finances
Cairo, Egypt (The Media Line) – Egypt faces a risk-laden game of Beat the Clock as it tries to get its political house in order before its foreign currency reserves sink much more.
Reserves fell to $16.4 billion in January from about $36 million a year earlier, a drop that economists all agree imperils the economy and requires Egypt to seek support from external sources and make difficult decisions to cut back government spending and subsidies. But that will be difficult given the political situation.
Presidential elections are now scheduled for late May, preceded by a six-week election season. Meanwhile, a parliament dominated by Islamists is tussling over who will control the government with the interim military council. A dispute with the United States over foreign human rights activists detained in Egypt is threatening vital American aid to the country. In the meantime, no U.S. assistance is being transferred to the country.
The timetable looks even more challenging when the role of the International Monetary Fund (IMF) is factored in. Egypt’s Ministry of Finance is reportedly counting on the IMF’s executive board to approve a $3.2 billion facility towards mid-March, which will then go to parliament for approval about the time the presidential campaign is getting under way.
“Time is not on Egypt’s side and politics could be the prime suspect to derail or delay an IMF program or exacerbate dollarization and [foreign currency] outflows,” Bank of America Merrill Lynch analyst Jean-Michel Saliba said in a note to investors last week.
Concerns that Egypt’s political trajectory looks to be on a collision course with its financial needs came in the form a downgrade in its bond rating by Standard & Poor’s (S&P) on Feb. 10. S&P lowered its ratings to B from B+ on Friday, five notches into junk territory, and said further downgrades could be on the way.
“The negative outlook reflects our view that a further downgrade is possible if the government fails to stem the decline in reserves, or an uncertain policy environment and weak institutions emerge from the ongoing political transition,” S&P said. Moody’s and Fitch, two other bond-rating agencies, cut their ratings on Egypt earlier.
Diminishing foreign reserves may be the most immediate threat to Egypt’s economy, but it is not the only one. More than a year after the revolution that brought down Hosni Mubarak, economic growth has stalled, the number of visiting tourists has plummeted and foreign investment has evaporated, all of which is exerting huge economic pressure on the government at a time of political flux.
Bank of America Merrill Lynch estimated that Egypt’s drawdown of its foreign currency would slow to what it called a “more manageable” $500 million a month because the foreign capital that has been responsible for much of the decline has been nearly drained out of the country.
On the other hand, Egypt could also get a boost from a rare instance of foreign investment if France Telecom goes ahead with the purchase of a $2 billion stake in the Egyptian Company for Mobile Service, popularly known as Mobinil, which it agreed to buy from Egyptian entrepreneur Naguib Sawiris last week. If the transaction goes through, that money might be transferred to Egypt in March.
But Merrill also noted that Egypt’s finances look more precarious than the headline foreign reserves figures show. Taking out Egypt’s holdings of gold, reserves fall to $13.6 billion, which are equal to just 2.8 months of imports, Saliba wrote in the Feb. 16 note. Meanwhile, Egypt’s external financing needs could reach some $11 billion through June 2013, Finance Minister Momtaz el-Saieed said Feb. 10.
But accepting aid is politically problematic because the public looks askance at foreign assistance, especially from the U.S. Only 26 percent favor accepting American aid, according to a Gallup poll taken in December. The proportion willing to accept international aid rises to 50 percent (with 42 percent opposing) and those willing to accept it from fellow Arabs reaches 68 percent (28 percent opposing), Gallup found.
Egyptians don’t like aid because it usual comes with strings attached, such as unpopular economic reforms in the case of the IMF and maintaining the 1979 peace treaty with Israel, in the case of American assistance. Political opposition to foreign assistance caused the interim military government to reject the original offer of an IMF credit last spring, a decision many economists say has exacerbated the financial troubles in which Egypt now finds itself.
Parliament must approve an IMF loan, but Essam el-Erian, a leader of the Muslim Brotherhood’s Freedom and Justice Party, which dominates parliament, said his group may vote against it because it might impinge on Egyptian sovereignty. “Look at Greece,” el-Erian said in an interview with Bloomberg News this week. “Everybody is telling it what to do.”
Above and beyond accepting foreign financial assistance, the other remedies for Egypt’s foreign reserves ailment are all painful for politicians and the public alike.
One is bringing down the budget deficit. As the economy has shrunk and the government boosted handouts in the early days of the revolution to try and palliate the population, Egypt’s fiscal deficit has ballooned. Officials recently revised upward their forecast for the budget deficit for the fiscal year ending June 30 to 9.4 percent of gross domestic product.
The solution would be to cut spending, particularly costly and wasteful subsidies on food and energy. Indeed, the military government recently announced plans for $4 billion in spending cuts and the IMF and others providing aid will have their own list of fiscal measures. But political analysts suggest that will inevitably mean cuts to popular energy and food subsidies of the kind that have set off riots in the past.
Another remedy is devaluing the Egyptian pound. In spite of Egypt’s mountain of economic woes, the pound had shed only about 1 percent of its value over the past year as the central bank acted to shore up its value by raising interest rates and drawing down on reserves. But the bank’s options are narrowing as it is forced to devalue the pound, which will almost certainly lead to higher inflation.
Analysts see some positive elements in the Egyptian political scene. Saliba notes that the decision to move up the presidential vote to May reduces the length of the campaign season and the opportunity for grandstanding by candidates. Ahmed Galal, managing director of the Economic Research Forum in Cairo, maintains that the Muslim Brotherhood has taken a pragmatic line on subsidiary reform and supports free markets.
©2012. The Media Line. All Rights Reserved.
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China sees its exports and imports fall
Beijing, China (AHN) – China’s exports fell in January by 0.5 percent compared to a year earlier marking the first decline in two years, data showed Friday
Exports dropped to $149.94 billion while imports dived by 15.3 percent to $122.66 billion.
Despite the declines China’s trade surplus grew to $27.28 billion in January up from $16.52 billion the prior month.
Part of the decline was because many factories cut back production or close their doors for the Chinese Lunar New Year holiday, also known as the Spring Festival, which fell in January this year. Workers generally want to travel home to celebrate the holiday with family.
However, analysts say the slowdown is further evidence that China’s economy is taking a hit from continued weakness of demand from the struggling U.S. and eurozone economies.
 
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Wall Street opens higher Friday fueled by a strong jobs report
New York, NY, United States (AHN) – Stocks opened sharply higher Friday after the Labor Department reported the U.S. economy created jobs at the fastest pace in nine months.
Shortly after the opening bell on Wall Street, the Dow Jones Industrial Average soared 113 points, the Standard & Poor’s 500 Index rose 12 points and the NASDAQ jumped 28 points.
Oil was up 64 cents to $97.13, and gold was lower by $7, last trading at $1,752.50 a troy ounce.
The Labor Department reported that nonfarm payrolls jumped by 243,000 in January, the most since April, and far exceeding economists’ expectations of a gain of just 150,000.
The strong jobs reports put the unemployment rate to a near three-year low of 8.3 percent and buoyed investor sentiment.
Market watchers will also be watching the big game Sunday. For the past 36 of 45 Super Bowls, the stock market has gone up after a win by an original National Football League team, one that traces its roots to before the merger with the American Football League, and gone down when the AFL (or newer team) is victorious.
So, Wall Street wants the Giants to win the Super Bowl.
The measure has an 80 percent accuracy rate based on the Dow Jones Industrial Averages’ annual performance.
There is not any science to it, but it is still as reliable as it gets for stock forecasting.
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U.S. stocks fall as GDP trails forecast
New York, NY, United States (AHN) – Wall Street opened lower Friday after a report showed that the U.S. economy expanded less than forecast..
Just after the opening bell, the Dow Jones Industrial Average was lower by 33 points, the Standard and Poor’s 500 Index was flat and the NASDAQ was up by about 6 points.
Weighing on stocks was a report that showed the U.S. economy expanded at 2.8 percent in the fourth quarter, less than the 3 percent that had been projected.
In Europe the Stoxx Europe 600 Index slipped 0.7 percent as investors await word on developments on the region’s sovereign debt crisis. European Union Economic and Monetary Affairs Commissioner Olli Rehn said authorities are “very close” to reaching an agreement on private-sector involvement in a Greek debt swap.
Despite those words of optimism, the dismal growth of GDP in the U.S. was keeping investors cautious. The health and growth of the U.S. economy is a very important and leading indicator of economic growth worldwide. As analysts like to say, “when the U.S. sneezes, the world catches a cold.”
In corporate news, Ford fell after reporting numbers that missed estimates. Starbucks shares slipped despite reporting better than expected numbers, and Juniper Networks plunged after the second biggest maker of computer networking equipment forecast sales and profits that missed estimates.
In commodities, oil was unchanged at $$99.60 a barrel, gold rose $4.70 to $1,725 a troy ounce and silver was up a few pennies at $33.63.
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People consider fleeing as violence increases
Baghdad, Iraq (IRIN) – Suicide attacks, assassinations and bombings in Iraq have claimed the lives of at least 265 people and injured hundreds of others since 18 December, the date the USA withdrew all but 200 of its troops from the country, according to the health and interior ministries.
The wave of attacks, carried out mainly by Sunni extremists from Al-Qaeda in Iraq against Shia communities, has alarmed many who fear the country could descend into chaos once more, with the government itself acknowledging it is not capable of ensuring security on its own.
The attacks also come as political factions are at loggerheads over how to reach a power-sharing deal. The Sunni community is complaining that it is being marginalized by the Shia-led government, which recently issued arrest warrants against Sunni Vice-President Tariq al-Hashemi and other politicians for allegedly operating death squads.
Many fear the current violence could send the country back to the days of 2006-07 when Shia-Sunni conflict left thousands of people dead and millions of others displaced. A few families have already packed their bags and others are contemplating leaving.
Here is how some Iraqis are feeling:
Sultan Abdul-Latif Ibrahim, a 55-year-old father of six from the Shia Shabak minority in the northern province of Ninevah: “I lost 10 of my relatives since [the US-led invasion in] 2003… We used to live in the provincial capital, Mosul, for years with Sunnis and Christians. But in 2007 we were forced out of our houses by Sunni extremists who blew up our homes. Since then, we have been living in a makeshift camp on the outskirts of Mosul. Last Monday [16 January] our camp was attacked by a parked car bomb, killing eight people, including six of my relatives. I wish to die now rather than later. We can’t bear the hardships we are going through every day. We, the Shia, are facing constant threats by Sunni extremists who want to eliminate us and there is no place to go. I can’t afford to move with my family to another place.”
Hassan Abdul-Mahdi, a 35-year-old Sunni businessman and father of three from Baghdad: “Iraq today is just like Iraq after the toppling of the previous regime. There is one group that wants to dominate and impose its control on the country. Today, the Shia-led government and politicians who control the security forces have started to hunt down Sunni leaders and political figures to bite them one by one using different means… I’m contemplating leaving Iraq as the situation seems to be getting worse.”
Jandak Youssif, a 46-year-old Christian from Baghdad: “The situation is getting worse day by day, and the government doesn’t care about our suffering and needs. Our economy is stagnant; illiteracy and unemployment are prevalent; decent public services are not available; and people are leaving the country due to the security situation and religious discrimination. Christians are being attacked and no-one is campaigning for their rights. We are not seeing any improvement in any aspect of our life… My family is scattered in many parts of the world; my parents and brother are stuck in Syria waiting to be relocated to a third country. I have three sisters in Denmark, one in the Netherlands and two in Ninevah Province. Iraq is one of the richest countries in the world but we are the worst in terms of corruption, unemployment and illiteracy.”
Examples of recent violence
16 January: Two car bombs targeted a camp for displaced Shabak in the northern province of Ninevah and a commercial area in the central province of Babil, killing 11 and wounding 21.
14 January: A bomb attack against Shia pilgrims in the southern province of Basra killed 53 and injured 130. Al-Qaeda in Iraq claimed responsibility for the attack.
10 January: A wave of bombs and assassinations nationwide killed 10 people. The targets were government officials, security forces and Shia pilgrims.
9 January: Three car bombs exploded in Baghdad, killing 17 and wounding dozens.
5 January: A wave of bombings targeted Shia Muslims in Baghdad and other provinces heading on foot to the revered city of Karbala to mark the anniversary of the death of Imam Hussein. Seventy-eight people were killed and more than 100 wounded.
22 December: A string of coordinated bombs tore through mainly Shia neighborhoods in Baghdad, killing 69 and injuring nearly 200. Al-Qaeda in Iraq claimed responsibility for the attacks.
18 December: The USA pulled the last of its combat forces out of Iraq, leaving only 200 for training and diplomatic protection.
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– Provided by Integrated Regional Information Networks.
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Euro recession fears spike on hint of German GDP drop
Berlin, Germany (AHN) – Signs of an economic contraction in Germany’s economy raised fears of a recession in Europe.
The news escalated concern that demand for oil might fall, causing oil futures prices to drop by as much as 1.1 percent. In addition, the euro weakened against the dollar.
Germany has long served as the engine for economic growth for the entire European Union. Therefore, news that the German economy likely shrank by 0.25 percent during the last three months of 2011 caused alarm and has observers worrying the European Union might slide back into a recession.
Official figures from the Federal Statistics Office show that the German economy only grew by 3 percent during 2011 and that was only achieved because of strong growth during the first half of the year.
Moreover, the Statistics Office said that most of the growth during the first six months was driven by domestic demand. The Statistics Office based the annual figure on an estimate of fourth quarter growth. However, the government won’t post the official data for the last quarter until Feb. 15.
In the meantime, Norbert Raeth from the Statistics Office announced at a press conference Wednesday that the economy likely shrank by “around a quarter of a percentage point” in the fourth quarter.
Although the 3 percent growth rate was down from the 3.7 percent in 2010, Germany still had a stronger figure than the United States or the EU.
According to the Organization for Economic Co-operation and Development (OECD), among its member nations Germany showed better growth than the expected growth rate of the following nations:
- U.S. 1.7 percent
- France 1.6 percent
- United Kingdom 0.9 percent
- Italy and Spain 0.7 percent
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Let the returns and exchanges begin
New York, NY, United States (AHN) – The season for giving and receiving gifts is now Christmas Past. Now, it is the season for returning unwanted presents.
Dubbed “Mega Monday,” Dec. 26 is expected to be the third busiest shopping day of 2011, with scores of people heading to stores in droves in search of after-Christmas bargains and to return items.
Stores are forecast to ring up $469.1 billion over this holiday season, which extends from Nov.1 through New Year’s Eve. The final week before Christmas accounts for up to 20 percent of those sales, with the week after the holiday also being very brisk.
Some retailers underestimated the resilience of the American shopper, believing they weren’t ready to spend during the still-weak economy. However, the National Retail Federation reports that the two-month period has been busy, and it upgraded its overall sales growth forecast a full percentage point, to 3.8 percent.
Some shoppers are just getting started, putting off buying big ticket items until after Christmas, looking for blockbuster year-end specials.
Stores are also preparing for the rush to exchange and return gifts. Many stores have changed their return policy, shortening the number of days customers can return an item and requiring a receipt for cash back.
For those that find they can’t return, there is an option. We promise not to tell if you save that unwanted present and re-gift it next year.
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Obama supports payroll tax bill; Keystone pipeline in limbo
Washington, DC, United States (AHN) – The White House has thrown its support behind the end-of-year legislative package that included an extension of the reduction in payroll taxes for Americans for two months, according to a senior administration official.
In a statement issued Friday night, White House Communications Director Dan Pfeiffer said, “The President said that Congress cannot go home without preventing a tax increase on 160 million hardworking Americans, and the deal announced tonight meets that test.”
Pfeiffer quoted the President as urging “Congress now to finish up their business for the American people.”
“This is an important step towards enacting a key provision of the President’s American Jobs Act and a significant victory for the American people and the economy, because as independent analysts have said, failing to extend this tax cut would have had a damaging effect on our recovery and job growth,” Pfeiffer added.
The statement from the White House came after Senate negotiators reached a deal on a two-month extension of the payroll tax holiday, among other benefits, but also imposed a requirement for President Obama to decide within 60 days whether to permit the construction of the Keystone XL pipeline, which would transfer oil from Canada oil sands to Gulf of Mexico refineries.
Earlier, Sen. Dick Lugar announced inclusion of his Lugar-Hoeven-Vitter legislation that would “compel the Obama Administration to act on a construction permit for the Keystone XL pipeline in 60 days,” in the payroll tax reduction bill.
“The President will no longer be able to duck his responsibility to American workers. He must now make a decision,” said Lugar, adding, “It is absolutely incredible that President Obama wants to delay a decision until after the 2012 elections apparently in fear of offending a part of his political base and even risking the ire of construction unions who strongly support the project.”
Energy specialists were not so sure of the outcome. One, speaking on condition of anonymity, commented in Washington, “One can be sure the pipeline project is dead as the president will not move before elections as it concerns his vote base of environmentalists.”
Moreover, the two-month extension of the payroll tax would definitely raise hiccups in both parties, according to political pundits, as this looked like a face-saving measure by lawmakers, who are suffering their worst ratings in recent years.
The tax paid by employees, now 4.2 percent, was scheduled to revert to its 2010 level of 6.2 percent on Jan. 1 if legislators did not renew the cuts, but President Obama had called on Congress not to go on vacation without final action.
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