The United States of Disrepair

March 23, 2017

4 minute read

by ProjectM Online Team, ProjectM Online

If there is one thing most Americans agree on right now it is that the country’s infrastructure has fallen into disrepair. Emblematic of the underlying problem is Washington D.C.’s Metro system.

“It is a poster child for what happens to a world-class capital asset when you ignore maintenance for 40 years,” says Casey Dinges, Senior Managing Director at the American Society of Civil Engineers (ASCE). “Last year they had to shut down entire sections for 2-3 weeks.”

Maintenance ignored or deferred is a major reason why the ASCE, in its 2017 Report Card for America’s Infrastructure, scored the nation’s infrastructure a lowly D+. The study lamented maintenance backlogs and under-investment, highlighting roads, river levees, public transit and drinking water systems as especially vulnerable.

The ASCE defines D-grade infrastructure as “mostly below standard…exhibits significant deterioration…with strong risk of failure.” For example, more than 15,000 dams – average age 56 – were classified as “high hazard” in 2016.

American infrastructure has been scoring Ds since 1998. The 2017 Report Card says the country needs to invest $4.59 trillion to improve from D+ to a B grade, upping expenditure from 2.5% to 3.5% of GDP by 2025.

Neglected maintenance costs dear

Maintenance is an issue everywhere, says Casey Dinges, from levees in Louisiana to dams in California, transport systems in cities to water systems in rural areas. Recent high-profile failures such as the Oroville Dam emergency and water contamination in Flint, Michigan underline his point.

“There needs to be a national commitment to bringing existing infrastructure into a state of good repair,” he says. Unless that happens, infrastructure bottlenecks and failures over the next decade will cost $7 trillion in lost business, put 2.5 million jobs at risk and slash US GDP by nearly $4 trillion – equivalent to every American family losing $3,400 every year.

Those are staggering numbers and some might say civil engineers have a vested interest in hyping the need for spending. “It is fair to be sceptical,” Dinges says, “but I would remind people that we warned of the dangers that New Orleans faced on the cover of Civil Engineering magazine three years before Hurricane Katrina.”

Good things are happening. Increased maintenance spending on highways has improved road conditions by 17% in six years. Road conditions are a factor in about 10,000 road deaths every year and so better maintenance helps save lives. Another sector where Dinges sees significant progress is the railways, where private companies invested during the post-2008 downturn as the cost of borrowing and materials fell. Rail was the highest scoring sector in the 2017 report, earning a B.

Passing the buck

A significant challenge, however, is that responsibility for America’s infrastructure is parcelled out between federal, state, municipal and private actors. Recently, more public-private partnerships have emerged. So where does the buck stop?

“It adds to the complexity,” Dinges acknowledges. “In the last four years real movement has been from the states, with gasoline taxes and bond initiatives financing infrastructure.” He is encouraged by private sector investments in toll roads and railroads. “Now the federal government needs to step up and be a firm partner,” he says.

Another issue is political short-termism: elected officials (and voters) are happy to cut the ribbon on new projects but less keen to fund ongoing maintenance.

Trump bounce?

However, Dinges is hopeful Washington is paying attention. “We now have a new President who is talking about infrastructure. And Hillary did too. Never in my lifetime have we had an election where both presidential candidates talked about this issue. Something will happen.”

What that something will be, and how it will be paid for, remain open questions. Just how will the Trump administration spend the $1 trillion for infrastructure that the President promised in his first speech to Congress?

“The funding gap is close to $150 billion a year,” Dinges explains. “That sounds a lot but we are talking about an $18 trillion economy. Half of that gap is in the transport space and I wouldn’t be surprised to see transport get half the final settlement.

“However, it is hard to see how this will come together and how it will be paid for. The new administration floated a white paper in December suggesting giving private investors 82% tax credit on loaning money to state and local governments for infrastructure plus a 10% rate of return. It didn’t get a whole lot of support then. Alternatively, a gas tax could fund these investments (and gas would still be a bargain) but that is a tough political hill to climb.”

So what would be his dream executive order?

“We have to modernize in a targeted and strategic manner to accommodate a growing population. And we need a change of thinking to focus more on sustainability and resilience, especially in coastal communities exposed to climate change and seas level rises. Perhaps spend a little more upfront so as to save on maintenance in the long term.”

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