Infrastructure 2

Infrastructure – The Next Big Deal? #1

Reuters carries a report on an infrastrucutre concern:

The worst Midwest flooding since 1993 has generated images of swamped towns, cracked roads, washed-out bridges, overwhelmed dams, failed levees, broken sewage systems, stunted crops and water-logged refugees. The losses are in the billions of dollars and still mounting, as the costs of crop losses alone send shocks through the inflation-wracked world food system and threaten insurers.

The disaster has reminded policymakers of the decrepit state of U.S. infrastructure, stirring concerns similar to those following the deadly Minneapolis bridge collapse in 2007 and the flooding of New Orleans after Hurricane Katrina in 2005.

Even before the latest flooding, a group representing engineers said the United States needed to spend about $1 trillion more than it does now to bring infrastructure up to par with modern needs and standards.

“The patch-and-pray approach simply won’t succeed,” said David Mongan, head of the American Society of Civil Engineers.

But the group also said its five-year cost estimate was outdated and does not count the price of new roads, rails, and sewers required by a growing population, nor the cost to repair damage inflicted by the recent Midwest floods.

President George W. Bush has asked Congress for $1.8 billion to boost funds for flood recovery but it is unclear how much of that money will end up in infrastructure repair.

Presidential candidates vying to succeed him have each promised quick action in Congress and offered some ideas for the larger task of repairing infrastructure.

Democratic presidential candidate Barack Obama has proposed creating a $60 billion fund for infrastructure projects, funded by money saved by a promised withdrawal from the war in Iraq.

“This can be the moment when we make a generational commitment to rebuild our infrastructure,” Obama told business executives in Pittsburgh last week.

Everywhere You Look

Each need sounds dire: new wastewater treatment so sewage does not taint the same waterways that supply drinking water; repairs or replacements for thousands of corroded bridges; new and repaired dams and levees that will not fail; and upgrades to airports and air traffic control.

“We need profound changes,” said engineer Kumares Sinha of Purdue University. “We can’t live in a fool’s paradise.”

While rising economic powers China and India build highways and other large projects, U.S. infrastructure – once the envy of the world – has fallen into decline, Sinha said.

Two federal commissions since Katrina have tackled the issue and Congress is mulling proposals for a full-scale assessment of the nation’s infrastructure needs and an infrastructure “bank” to loan money for projects.

But Sinha and other experts said the analysis should go deeper to reflect an economy likely to face higher fuel prices for the foreseeable future. Policymakers need to consider new methods of reducing road congestion, for example, whether by charging more to use them or exacting fees for entering city centers, which will generate revenue for mass transit.

The nation also may have to reconsider its lukewarm commitment to passenger rail service, experts said.

Government funding for some infrastructure needs has declined, such as for wastewater plants. Municipalities hike taxes or fees to repair ancient pipes prone to bursting.

“Everybody is drinking somebody’s waste water,” said Susan Bruninga of the National Association of Clean Water Agencies.

The state of Illinois is weighing its first capital improvement project in a decade, hoping to back $31 billion in bonds by leasing the lottery and building a casino in Chicago.

Illinois will fund infrastructure through gambling monies?

(Another thought is how the floods have hit the corn and soybean market?)