Asset Management on the campaign trail

“Something is very, very wrong when at the dawn of the 21st century in the richest country on earth, people are actually nervous about driving over bridges for fear they’ll collapse” declared Hillary Clinton in a conference call after disclosing her plan to deal with what she has recognised as “an infrastructure crisis”.

And crisis it is. The high profile collapse of the bridge in Minnesota has drawn attention to the approximately 70,000 bridges across the country in dire need of funds, this shortly after the steam pipe burst in Manhattan. And the list goes on; tunnels, roads, water infrastructure, and rail infrastructure are all suffering from decades of neglect.

With a potential repair and refurbish bill of $1 trillion the US is facing one of the direst threats to economic stability and public safety in a generation.

Clinton acknowledged this in her plan, stating that it was only “a down payment on beginning to address” the emerging problems.

The Clinton Asset Management Plan

• $10 billion in infrastructure spending over 10 years

• $250 million emergency assistance grants for safety reviews of high risk assets

• A new commission to assess engineering standards to “better prioritize repairs on bridges and roads”

• And she called for an additional $15 billion per year for public transportation; linking federal mass transit funds to local land use policies that encourage residential development

• $1 billion over 5 years for intercity rail systems

• Increases in Department of Transport congestion reduction budget and an additional $50 million a year for teleconferencing.

At least Senator Clinton has thought about the issue.

But anybody even remotely involved in asset management for infrastructure will realise that this is not nearly enough, in fact it is not even a band-aid measure. The program, although the best to be announced, is still typically short sighted, under funded, and not anywhere near as sophisticated as it needs to be to deal with such a critical issue.

In a 2007 report Booz, Allen Hamilton consultancy estimated a global $40trillion spending requirement globally for infrastructure modernization and maintenance over the next twenty five years. Of this the vast majority would be required within the United States, due to population and age of existing infrastructure assets.

They also noted that the abundance of water, power and mass transit systems will define the centers of growth in the future. History has shown us that where the population is not able to live to a reasonable quality of life, they leave. So this is a threat not only to the existing economic well-being of the nation but also to its future growth prospects.

The situation is grave, boring but grave, perhaps more serious than the candidates in this election actually realise.

So what is needed? Above all else there is a need for inventiveness and a sense of emergency.

• There is a need for a report similar to the Stern Report from the UK. One focused on the economic impacts of aging and decaying infrastructure rather than the effects of global warming.

• With this report to draw attention to the size and urgency of the crisis then there is a need to start to engage with the nation’s infrastructure in innovative ways.

• Using the bond markets and private enterprise to fund infrastructure spending, freeing the nations capital for other more high profile causes

• Upgrading of standards, assessment techniques, review processes and tying in financial incentives for cities and private industry related to infrastructure management and serviceability

• Financial penalties for not achieving targets, levels of service or agreed levels of risk.

While the government is looking to global issues and is hesitant to interfere in local and domestic issues, the fact that the country is decaying from under them can no longer be ignored.