By Roland Murphy for Arizona Builder’s Exchange
The economy is strong on paper with excellent stats on stocks and employment, even if the benefits the average American usually enjoys in those circumstances, such as wage growth and competitive options, are still lagging.
While investment abounds, the ongoing and increasingly rancorous battles between the President, Congress and the American people leave one of the most important components of national prosperity and potential for future successes – infrastructure investment – hanging in the balance.
A recent report from Forbes Insights, developed in association with Commonwealth Bank of Australia, points out the various challenges and opportunities in the current state of U.S. infrastructure.
The report details the results of a survey of more than 200 senior-level respondents, a series of one-on-one interviews and a senior executive roundtable to determine a governmental and private-sector overview of America’s deteriorating infrastructure and how everyone – in government, business and the population at large – can best benefit by addressing it.
Both during and after his campaign, President Trump pledged directing $1T toward infrastructure repair and improvement. In broadly general terms – made necessary because no detailed proposal has been made public – the idea is for $200B in public funds to seed $800B in private investment.
This has been met with both enthusiasm and ridicule, depending largely on one’s political affiliation. No matter where one’s colors shade on the political spectrum, however, nearly everyone agrees something needs to be done, extensively and soon. Unfortunately, half of the report’s respondents (49 percent) don’t believe the currently discussed “targeted investment” approach will be successful in fixing shortfalls.
In its introduction, the Insights report says, “Across the U.S., examples of citizens, government officials and the press criticizing the condition of their roads and bridges, airports, schools or other infrastructure are easy to find. This should come as no surprise, says Scott Pattison, CEO of the U.S. National Governors Association, ‘because as a nation, we are critically underinvesting in our infrastructure.’”
Nearly two-thirds (64 percent) of infrastructure executives and government respondents agree the U.S. is underinvesting in infrastructure, and more than one-third (36 percent) believe that could result in a crisis. Of those, 57 percent foresee that crisis happening within 6-10 years.
The majority (69 percent) of respondents say the public sector needs to do more to promote and empower the sale or lease of infrastructural components to the private sector, and half (49 percent) say officials need to cut barriers to “the sale or lease of government assets.” If enacted, respondents claim, public-private partnerships would be easier to enact and become more common.
The appetite for investment, regardless of the currently perceived dire state, is strong. The report states, “Crisis or not, the U.S. remains a very attractive market for infrastructure investors and providers. Two-thirds of survey respondents (65 percent) say the U.S. infrastructure arena is their first, second or third choice when it comes to the most attractive marketplaces.”
The challenges are numerous, of course. Perhaps the first is, simply put, where do we begin? When it appears absolutely everything needs to be done, listing exactly what needs to done – along with when and how – is a monumental task unto itself.
Factor in partisan bickering, political gridlock, an ever-deepening shortage in skilled labor to do whatever work is ultimately assigned and how to generate an ROI, and it’s no wonder people and leadership are intimidated to the point of near paralysis.
All that said, there is both hope and potential for success. The roundtable discussion listed several points to keep in mind, all of which bear consideration.
- Both government and the private sector need to do more to promote the benefits of infrastructure investment. Simply put, roads and bridges aren’t sexy. Glass and steel vertical development yields “Oohs and ahs.” Pavement and concrete don’t. If we want to invest in the essential horizontal, first we need to invest in perception and awareness.
- Agencies need to be creative and innovative when it comes to revenues. For example, treat rights of way and access points as potential money-makers. Commercial leasing, advertising and franchising are just a few examples.
- Admit we’ve screwed up. No one person, party, outlook, philosophy or institution is responsible for the nation’s multi-generational lack of foresight and investment in infrastructure. As a result, there’s no need to be defensive. This is one of the few areas of American politics where universal cooperation is actually possible. Who knows, perhaps if leaders and citizens work to actually productively collaborate here, they might find a means to do the same in other critical areas.
- Accept and admit that if we need it (We do.) and if we want it (We should.) we need to pay for it. That probably means more taxes, less direct governmental control and heavy-handedness, more private say and even foreign investment.
- Approval processes need to become more transparent and simple. When a necessary project can sit for 20 years or more while administrative fiefdoms bicker and issue contradictory rulings, one doesn’t have to be a libertarian or an anarchist to see room for improvement.
- Form closer public-private partnerships. “The advantages of private provision of services need greater promotion. Legislatures, for example, need to be shown the many successes in P3, design/build and similar structures and encouraged to provide enabling legislation”
- Regardless of private innovation and local efforts, more help is needed from the Federal government. Individual arrangements are essential; local innovation is vital, but the central authority – the Federal government – needs to appropriate funds and, even more importantly, compile and share data as to which efforts and programs have worked, which haven’t and which can be implemented in multiple areas and scenarios.
The full report is available for download here.