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Study Sees $2T US Infrastructure IOU

Friday, May 20, 2011

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$2 trillion.

That’s the tab that the United States is facing just to rebuild and repair its crumbling infrastructure, according to a new study.

Worse, while the U.S. dawdles, defers and deadlocks over it infrastructure needs, other countries are aggressively tackling maintenance and construction on their highways, bridge, rails, ports, sewage plants, water lines and other systems, further outdistancing the U.S. with each layer of coating applied, each ton of concrete poured, each bolt driven into place.

So concludes the Urban Land Institute and Ernst & Young, in Infrastructure 2011: A Strategic Priority, which examines infrastructure investments on six continents.

‘Lurching Along, Losing Ground’

“In contrast with its global competition, the United States is lurching along a problematic course—potentially losing additional ground,” the authors report.

After more than three decades of “conspicuously underfunding” infrastructure, the U.S. has awakened to the need to catch up but lacks the money and political will  to tackle the job, the report argues.

Although President Obama has declared infrastructure a key priority for his administration, “the chances for setting and executing national priorities appear to be foundering in partisan debate over tax burdens and how to cut exploding government debt.”

 Tappan Zee Bridge

 Infrastructure 2011

Replacing New York’s Tappan Zee Bridge will cost $16 billion.

Thus, plans for next-generation networks “will probably get delayed, pared back, or shelved,” the report says.

Global Competition

While the U.S. remains paralyzed by debt and partisanship, equally strapped countries worldwide are on the move, the authors report:

• Despite a severe austerity budget, the U.K. has committed $326 billion over the next five years to national infrastructure projects focused on rail, energy production and broadband access, with an emphasis on investments in renewable energy.

• France, Germany, Spain and Italy continue to build out high-speed rail and freight networks and extend cross-border transport links, while attempting to lower carbon footprints.

• Australia is working to shore up existing infrastructure, while setting future investment priorities, including expansion of ports, refashioning of rail lines, and relief of urban traffic congestion.

• Canada is expanding its public-private initiatives to revamp aging facilities.

• Flush with export cash, China is pursuing a wide menu of infrastructure programs, including completion of an unprecedented 10,000-mile high-speed rail network by 2020. Major Chinese centers boast new airports, ports and subway systems.

• India is working to attract more private financing for its infrastructure, while the United Arab Emirates and Kuwait use oil wealth to build out transport hubs and tackle future power and water needs.

• Brazil is accelerating road, transit, and water projects to accommodate its burgeoning economy and buttress its global standing as it prepares for the 2014 World Cup and 2016 Summer Olympics.

“Outside the United States, in most of the developed world and in many emerging markets, countries have committed to fulfilling infrastructure agendas as essential for sustaining or enhancing living standards in an increasingly competitive global marketplace,” says the report.

The ABCs of PPPs

The solution, ULI says: cooperation. Cooperation among governments at multiple levels, cooperation between cities and regions and, above all, cooperation between the public and private sectors. Pool resources, and gain consensus, the authors advise.

The report calls public-private partnerships “the most promising solution” for infrastructure investment, noting Virginia’s, Florida’s and Texas’ experiences with managed toll roads as PPP success stories.

“The interest in gaining access to private capital and expertise through PPPs should accelerate as public funding sources diminish,” the report says.

Other recommendations in Infrastructure 2011:

• Focus attention first on critical repairs and upgrades;

• Develop a national infrastructure strategy, funding merit-based projects that support national economic priorities;

• Concentrate spending on metropolitan areas and global gateways;

• Provide more secure federal funding to support planning for capital projects;

• Institute federal and state infrastructure banks to support project financing; and

• Phase in user fees to help fund infrastructure initiatives on a continuing basis.

"For those who have read our infrastructure reports over recent years, one consistent finding is that the U.S. seriously lags behind the rest of the world in addressing its infrastructure issues," said Howard Roth, Ernst & Young's Global Real Estate Leader.

“We need to refocus our priorities: streamline the procurement process, attract private capital more efficiently, strategically invest in projects with national merit, and regain our stature as a global competitor. We need to take a page out of the playbooks of several nations around the world highlighted in our report, or we face the risk of serious deterioration of our country's economic and social well-being."

D.C. Rallies to Urge Funding

Infrastructure advocates will descend upon Washington, D.C., later this month in two events designed to push Congress to pass what organizers call “a well-funded, multi-year highway reauthorization bill.”

On May 25, the National Stone, Sand & Gravel Association and its allied trade associations will sponsor a “Rally for Roads” on the National Mall.

The rally will be held in conjunction with the Transportation Construction Coalition Fly-In on May 24 and 25, which will bring together industry allies to meet with members of the 112th Congress to press for transportation infrastructure investment.


Tagged categories: Bridges; Infrastructure; Maintenance coating work; Maintenance programs; Roads/Highways

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