Public-Private Partnerships Needed

Apr 26, 2013

Photo: Ryan Anson/Bloomberg

The nation’s infrastructure grade is barely above failing, and its continued deterioration has significant implications for the U.S. economy and its global competitiveness. In a report issued every four years, the American Society of Civil Engineers (ASCE) gave the nation’s overall infrastructure—everything from aviation to wastewater systems—a D+.

This means that the nation’s infrastructure is in poor to fair condition and mostly below standard, with many elements approaching the end of their service life. A large portion of the system exhibits significant deterioration. Condition and capacity are of significant concern, with strong risk of failure. ASCE’s evaluations are based on capacity, condition, funding, future need, operation and maintenance, public safety, and resilience.

Those looking for a silver lining point to a slight improvement over the grade of D in 2009. This improvement can be attributed in part to increased public and private investment at all levels of government. For example, public-private partnerships at PortMiami and the Port of Baltimore have brought billions in private and public sector investment that support local job growth and increase American economic competitiveness.

ASCE says, “The 2013 Report Card demonstrates that we can improve the current condition of our nation’s infrastructure—when investments are made and projects move forward, the grades rise. For example, greater private investment for efficiency and connectivity brought improvements in the rail category; renewed efforts in cities and states helped address some of the nation’s most vulnerable bridges; and, several categories benefited from short-term boosts in federal funding.”

However, there is little cause for celebration, says Janet Kavinoky, vice president of Americans for Transportation Mobility, a U.S. Chamber-led coalition. “Much of the nation’s Interstate Highway System, many of the nation’s bridges, our drinking water and wastewater systems, our public transportation networks, and more need continual renewal and reinvestment—just like your house. At some point you have to fix the boiler, replace the roof, refinish the floors, and trade in the refrigerator freezer that doesn’t hold a consistent temperature.”

The Chamber, in partnership with the National Association of Water Companies, earlier this year launched a new campaign, Water is Your Business, to raise awareness of largely unseen leaky and outdated water pipes. In addition to preserving scarce water resources, repairing and expanding the U.S. water system would boost job creation and growth. According to Water is Your Business, each $1 billion in water infrastructure investment creates 28,500 jobs and contributes to $3.46 billion in economic activity.

ASCE estimates that $3.6 trillion in investment is needed to bring the nation’s entire infrastructure up to par. A recent study from McKinsey & Co argues that the infrastructure price tag could be reduced by more than 35% if projects that meet clearly defined needs and deliver desired benefits were prioritized, land acquisition and permit processes streamlined, and technology that lowers operation and maintenance costs deployed.

 “The Chamber supports all of the above as strategies to raise our grade,” Kavinoky says. “But we continue to be clear that more investment is still needed. All levels of government, in partnership with the private sector, need to marshal the capital to invest sooner, rather than later, and have realistic conversations about how to pay for investment.”


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