The New York City area is home to more than 25 million people — and nearly 1 in 10 Americans traverse its highways, byways and transit systems. As any resident of the area will tell you, the region’s transportation infrastructure is getting older by the day.

That’s why many are relieved to hear that construction has begun on a replacement of New York’s Tappan Zee Bridge. The project will cost an estimated $5 billion to $6 billion, but failure to replace the bridge could cost the local economy much more in the long run and could even pose a danger.#-ad_banner-#

Leading civil engineers consider this to be a rare victory for our nation’s infrastructure, and in a recent report, they suggested that the United States would need to invest $3.6 trillion by 2020 to bring the nation’s infrastructure to an acceptable level. That’s nearly double the current projected budget.

These engineers gave our infrastructure a grade of D+, which remarkably, is better than their last report, which I wrote about here.

In their current report, they slapped a C or D grade on most aspects of our infrastructure, and only our solid waste treatment plants received a grade higher than a C. Schools, roads, transit systems and drinking water systems all received a D grade, and these are among the most expensive areas to fix.

In recent years, funds for the repair and maintenance of aging schools have shrunk. The report suggests that at least $270 billion would be required to bring the nation’s schools up to code.

Let’s be frank: The dysfunction of our government implies that we lack the political will to invest in the infrastructure we need and deserve. At this point, we can only hope that spending rises enough to bring the national grade to at least a C. Still, we are talking about hundreds of billions in annual spending to reach that point.

I wrote a follow-up piece in late 2012 with suggested investment angles. While the picks in that column still look like savvy plays on our nation’s aging infrastructure, I’ve come across a few more ways to profit.

1. Infrastructure-focused mutual funds
These funds have similar portfolios, and their long-term performances are unlikely to diverge.

• Morgan Stanley Global Infrastructure (Nasdaq: UTLAX)
• Cohen & Steers Global Infrastructure (Nasdaq: CSUAX)
  
• Forward Global Infrastructure (Nasdaq: KGIAX)
  
• T. Rowe Price Global Infrastructure (Nasdaq: TRGFX)
  

2. Low-cost exchange-traded fund (ETF) route
Most infrastructure ETFs focus on the global opportunity, including:

• iShares S&P Emerging Markets Infrastructure Index Fund (Nasdaq: EMIF)
  
• iShares S&P Global Infrastructure Index (NYSE: IGF)
  
• SPDR FTSE/Macquarie Global Infra 100 (NYSE: GII)
  

3. Water-focused stocks
Partly due to the poor grade our nation’s drinking water systems received and partly due to increasingly frequent droughts throughout the U.S. Southwest, it’s wise to add water-focused stocks to your portfolio.

American Water Works (NYSE: AWK) generates roughly $3 billion in annual sales through its management of more than 1,000 facilities for water treatment, storage and wastewater management.

• Waters Corp. (NYSE: WAT) makes water-quality monitoring systems and generates more than $300 million in annual free cash flow (on a sales base of less than $42 billion).

• Watts Water (NYSE: WTS) is a global provider of water flow control technology that helps aid conservation and boost water quality.

• Lindsay Corp. (NYSE: LNN) makes highly efficient irrigation equipment. The company’s sales base doubled from fiscal 2007 to fiscal 2012 (to about $560 million), and analysts expect sales to rise 20% this year.

Risks to Consider: Continued neglect of our infrastructure would mean another lean year for these companies.

Action to Take –> The longer the United States waits to address its infrastructure needs, the greater those needs will be over time. Policymakers appear to be making headway on contentious issues such as immigration and Medicare spending as part of a possible “Grand Bargain.” If they succeed, lawmakers can move on to key challenges such as infrastructure, which appears to have bipartisan support. That makes this a good time to brush up on key infrastructure investment opportunities, as they may soon emerge as a key growth niche.