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What We’re Reading in Infrastructure, August 10

Tuesday, August 11, 2015

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We hope that you don’t get stuck in traffic or delays as you use the nation’s infrastructure to reach your vacation destination. In case you do, here are some recent publications, speeches, and testimony relevant to infrastructure policy and finance. The views expressed in these articles do not necessarily represent the views of the council, its co-chairs, members, advisors or the Bipartisan Policy Center.

Compiled by Nikki Rudnick, Aaron Klein and Jake Varn

Put Infrastructure Back on Track
By Jason Gold, U.S. News & World Report

“Before we celebrate pending congressional action over funding for the Highway Trust Fund – be it a short-term deal now or long-term deal later – consider that the United States needs about nine times that amount annually to get U.S. infrastructure back on track.

“The Department of Transportation estimates that we need to spend between $124 and $150 billion a year just to maintain our current, decrepit, system. In 2013, the American Society of Civil Engineers estimated that to actually improve the quality of current infrastructure, the price tag rises to about $450 billion annually, or over $3.6 trillion, by 2020. The Highway Trust Fund supports about $50 billion in infrastructure projects annually. This is known as the infrastructure funding gap – the country needs to spend a lot more on infrastructure than current policy funding allows for. No matter how you calculate the need, the heralded Highway Trust Fund starts to look more like legislative symbolism than pragmatic policy solution.” Read the article.

Streamlined Bidding Works—So Expand It: New York’s Legislature should Approve Broad Use of Design-Build
By Bill Rudin and Chris Hamel, Crain’s New York

“New York’s infrastructure is in dire need of investment. The massive backlog of needs—more than $47 billion of them in New York City alone—¬requires funding soon, and taxpayers have to foot the bill.

“Fortunately, there is a way to reduce the cost significantly. Traditional government procurement for construction projects is “design-bid-build,” meaning the design firm is selected first and then its design is used to solicit bids from construction contractors. We can compress this process so a single bidder handles design and construction. New York should expand its use of what is called design-build.” Read the op-ed.

U.S. Container Port Congestion and Related International Supply Chain Issues: Causes, Consequences, and Challenges
Federal Maritime Commission Bureau of Trade Analysis

“At its June meeting, the Federal Maritime Commission voted to release a staff report entitled U.S. Container Port Congestion & Related International Supply Chain Issues: Causes, Consequences & Challenges.

“The report organizes and further develops stakeholder discussion around six major themes that emerged at the 2014 FMC Port Forums held at major gateway ports – investment and planning; chassis availability and related issues; vessel and terminal operations; port drayage and truck turn-time; extended gate hours, PierPASS and congestion pricing; and collaboration and communication.” Read the press release. Read the report.

Interview with U.S. Transportation Secretary Anthony Foxx
By Darren Samuelsohn, POLITICO

“Federal highway funding dries up in less than 10 days and the House and Senate are still arguing over what to do about it. The House wants a short-term patch that postpones the real crisis until mid-December; the Senate is making an unlikely push to pass a multi-year transportation bill.

“Transportation Secretary Anthony Foxx doesn’t get a vote, but he arguably has more at stake than anyone else. The Obama administration’s highway point man sat down with POLITICO senior policy reporter Darren Samuelsohn to talk about the near-term consequences should Congress fail to reach an agreement.” Read the interview.

Maximizing the Value of New York’s Investment in Public Construction: The Role of Design Build Procurement
By Mitchell L. Moss and Hugh O’Neill, NYU Wagner Rudin Center for Transportation

“Revitalizing. Rebuilding. Rethinking. New York infrastructure needs improvement and expansion. Greater investment is likely required and current tax dollars must be used more effectively. One solution: Design-Build.

“This report is meant to shed light on the history, implementation, and outcome of Design-Build construction, and to make recommendations on where this process might provide a more efficient and effective method for investing public resources in infrastructure projects throughout the state.” Read the press release. Read the full report.

The Gas Tax is Over Survey
By Danny Vinik, POLITICO

“As the House and Senate squabble over a way to pay for road projects and avoid the looming “highway cliff” this week, America’s transportation experts think it’s high time for Washington to take up a much bigger challenge: Rebuilding our national transportation strategy from the ground up, and finding a smart new source of money to pay for it.

“With transportation-funding crises now a regular event on the Washington calendar, and Congress seemingly unable to come up with a long-term solution, The Agenda turned to a carefully selected list of more nearly three dozen leaders and experts across the public and private spheres to ask whether there was a better way for the nation to handle its crucial roads, rail, and other infrastructure.” Read the article.

Caution Ahead: Overdue Investments for New York’s Aging Infrastructure
By Adam Forman, Center for an Urban Future

“While Superstorm Sandy focused much-needed attention on key pieces of New York City’s infrastructure, the city faces a number of other infrastructure vulnerabilities that have little to do with storm-preparedness—from aging water mains and deteriorating roads to crumbling public schools. If left unchecked, they could wreak havoc on the city’s economy and quality of life.” Read the press release. Read the report.

Bumpy Roads Ahead: America’s Roughest Rides Strategies to Make our Roads Smoother

“Keeping the wheel steady on America’s roads and highways has become increasingly challenging as drivers encounter potholes and pavement deterioration. More than a quarter of the nation’s major urban roadways –highways and major streets that are the main routes for commuters and commerce –are in poor condition. These critical links in the nation’s transportation system carry 53percent of the approximately 3 trillion miles driven annually in America. With the rate of vehicle travel returning to pre-recession levels and local and state governments unable to adequately fund road repairs while the current federal surface transportation program is set to expire on July 31, 2015, road conditions could get even worse in the future.” Read the report.

Ontario P3s – Cost Does Not Equal Value
By TD Economics

“Ontario’s Auditor General (AG) released its audit on Infrastructure Ontario’s Alternative Financing and Procurement (AFP) program late last year. AFP is the public-private partnership (P3) model that has been used in Ontario since 2005. Focus centered on the AG’s assertion that AFP arrangements cost Ontario taxpayers $8 billion more than if the projects were completed successfully using traditional government procurement. Opponents to P3s have seized upon this finding as evidence that P3s are inefficient and an affront to taxpayers.

“While the AG makes many valid points about how Infrastructure Ontario (IO) could improve some of its processes, the focus on the $8 billion in “excess costs” oversimplified the AG’s analysis, and ignored many of the valuable benefits that AFP projects have brought. It is a case of knowing the price of everything, and the value of nothing. On the surface, P3s appear to have a higher price tag on the tangible aspects of the project than in a traditional procurement project. However, that ignores the fact that the tangible costs in an AFP are a more complete pricing of all of the risks of the project.” Read the report.