Why Prop Six Could Mean More Water Investments
by: Jack Williams and Edel Howlin, November 11, 2013 4:11:00 pm
Companies who play a big part in building water infrastructure could be getting a lot more business now that voters have okayed Proposition Six. It would take around $2 billion dollars from the state's rainy day fund to begin funding water projects across Texas. Claudia Mollerup-Madsen is a vice-president and financial advisor with Morgan Stanley here in Houston.
"We believe that now that the state is willing to spend that much money in infrastructure, it really opens up a whole variety of businesses and opportunity in the whole state. Pipelines, new infrastructure, new desalination, transportation, agriculture, I think really different sectors of the state as a whole will be able to participate in this opportunity."
Mollerup-Madsen says water infrastructure investment has a wide array of risk, from not much to a lot.
"You'll have some sectors which will be based on fundamentals and growth and I would tend to say that they are less risky. Now, when you're looking for more creative ways of making clean water and so forth, now you're looking at a riskier kind of investment. Generally speaking, you want to look at the fundamentals of a company first and then look at the tactical and see what area and what percentage of your portfolio is appropriate."
Texas has a 50-year water infrastructure improvement plan as the state looks for ways to ensure a reliable source of water over the next few decades. Many parts of the state have been stuck in a drought over the past several years.