Tragic symbol of need to build US infrastructure

[FRED]

This tragic event will for many years be portrayed by politicians as justification for massive expenditures on infrastructure. The fact is that tax revenues required for normal infrastructure maintenance that gets done in other first world countries, and even many third world countries, has been diverted in the US to other purposes, such as war spending, based on the ideological principle of "free markets." How does fighting a war that causes the deaths of thousands in other lands support "free markets" but not spending taxes or borrowing to maintain bridges so they don't collapse and kill our own citizens "free markets"?

No one will argue with the expenditures, and in fact they are long overdue. But the way they have come about speaks volumes about the way economic common sense has been hijacked by economic ideology.

Minneapolis bridge collapses, injuries feared

August 1, 2007

SAN FRANCSICO (MarketWatch) -- A bridge spanning the Mississippi River in Minneapolis collapsed Wednesday evening, sending cars into the water, according to media reports.

Tons of concrete crumbled and people were injured following the collapse of the entire span of the Interstate 35W bridge during the evening rush hour, reports said.

Some survivors were seen being carried up the riverbank, and there are estimates that some 20 to 30 people have been injured, according to a report on CNN.

[bill]

Re: Tragic symbol of need to build US infrastructure

This is an event that will spark a demand for infrastructure in America . CNN just had a special regarding the safety of bridges and an estimate of a 160k bridges in need of replacement and said Toll bridges are in better shape and are safer. This is the fear trigger that will launch a massive movement and demand for infrastructure starting with bridge replacement. Tolls and PPP will be used http://www.itulip.com/forums/showthr...0180#post10180

We have said before this will be the next expansion http://www.itulip.com/forums/showthr...1010#post11010



ASCE report card dated 2005 ( 2007 ?) with a needed $1.6 Trillion investment. Is this part of a $1 trillion need per year to cancel out disinflationary effects and produce new economic growth rather than recession as EJ pointed out in this post? http://www.itulip.com/forums/showthread.php?t=1397


http://www.asce.org/reportcard/2005/page.cfm?id=103

2005 Grades

Subject	2001 Grade	2005 Grade	Comments
Aviation	D	D+	Gridlock on America's runways eased from crisis levels earlier in the decade due to reduced demand and recent modest funding increases. However, air travel and traffic have reportedly surpassed pre-Sept. 11 levels and are projected to grow 4.3% annually through 2015. Airports will face the challenge of accommodating increasing numbers of regional jets and new super-jumbo jets.
Bridges	C	C	Between 2000 and 2003, the percentage of the nation's 590,750 bridges rated structurally deficient or functionally obsolete decreased slightly from 28.5% to 27.1%. However, it will cost $9.4 billion a year for 20 years to eliminate all bridge deficiencies. Long-term underinvestment is compounded by the lack of a Federal transportation program.
Dams	D	D	Since 1998, the number of unsafe dams has risen by 33% to more than 3,500. While federally owned dams are in good condition, and there have been modest gains in repair, the number of dams identified as unsafe is increasing at a faster rate than those being repaired. $10.1 billion is needed over the next 12 years to address all critical non-federal dams--dams which pose a direct risk to human life should they fail.
Drinking Water	D	D-	America faces a shortfall of $11 billion annually to replace aging facilities and comply with safe drinking water regulations. Federal funding for drinking water in 2005 remained level at $850 million, less than 10% of the total national requirement. The Bush administration has proposed the same level of funding for FY06.
Energy (National Power Grid)	D+	D	The U.S. power transmission system is in urgent need of modernization. Growth in electricity demand and investment in new power plants has not been matched by investment in new transmission facilities. Maintenance expenditures have decreased 1% per year since 1992. Existing transmission facilities were not designed for the current level of demand, resulting in an increased number of `bottlenecks' which increase costs to consumers and elevate the risk of blackouts.
Hazardous Waste	D+	D	Federal funding for `Superfund' cleanup of the nation's worst toxic waste sites has steadily declined since 1998, reaching its lowest level since 1986 in FY05. There are 1,237 contaminated sites on the National Priorities List, with possible listing of an additional 10,154. In 2003, there were 205 U.S. cities with `brownfields' sites awaiting cleanup and redevelopment. It is estimated that redevelopment of those sites would generate 576,373 new jobs and $1.9 billion annually for the economy.
Navigable Waterways	D+	D-	A single barge traveling the nation's waterways can move the same amount of cargo as 58 semi-trucks at one-tenth the cost--reducing highway congestion and saving money. Of the 257 locks on the more than 12,000 miles of inland waterways operated by the U.S. Army Corps of Engineers, nearly 50% are functionally obsolete. By 2020, that number will increase to 80%. The cost to replace the present system of locks is more than $125 billion.
Public Parks & Recreation	--	C-	Many of our nation's public parks, beaches and recreational harbors are falling into a state of disrepair. Much of the initial construction of roads, bridges, utility systems, shore protection structures and beaches was done more than 50 years ago. These facilities are anchors for tourism and economic development and often provide the public's only access to the country's cultural, historic and natural resources. The National Park Service estimates a maintenance backlog of $6.1 billion for their facilities. Additionally, there is great need for maintenance, replacement and construction of new infrastructure in our nation's state and municipal park systems.
Rail	--	C-	For the first time since World War II, limited rail capacity has created significant chokepoints and delays. This problem will increase as freight rail tonnage is expected to increase at least 50% by 2020. In addition, the use of rail trackage for intercity passenger and commuter rail service is increasingly being recognized as a worthwhile transportation investment. Congestion relief, improved safety, environmental and economic development benefits result from both freight and passenger market shifts to rail creating a rationale for public sector investment. The freight railroad industry needs to spend $175-$195 billion over the next 20 years to maintain existing infrastructure and expand for freight growth. Expansion of the railroad network to develop intercity corridor passenger rail service is estimated to cost approximately $60 billion over 20 years. All told, investment needs are $12-13 billion per year.
Roads	D+	D	Poor road conditions cost U.S. motorists $54 billion a year in repairs and operating costs--$275 per motorist. Americans spend 3.5 billion hours a year stuck in traffic, at a cost of $63.2 billion a year to the economy. Total spending of $59.4 billion annually is well below the $94 billion needed annually to improve transportation infrastructure conditions nationally. While long-term Federal transportation programs remain unauthorized since expiring on Sept. 30, 2003, the nation continues to shortchange funding for needed transportation improvements.
Schools	D-	D	The Federal government has not assessed the condition of America's schools since 1999, when it estimated that $127 billion was needed to bring facilities to good condition. Other sources have since reported a need as high as $268 billion. Despite public support of bond initiatives to provide funding for school facilities, without a clear understanding of the need, it is uncertain whether schools can meet increasing enrollment demands and the smaller class sizes mandated by the No Child Left Behind Act.
Security	--	I	While the security of our nation's critical infrastructure has improved since Sept. 11, the information needed to accurately assess its status is not readily available to engineering professionals. This information is needed to better design, build and operate the nation's critical infrastructure in more secure ways. Security performance standards, measures and indices need to be developed, and funding must be focused on all critical infrastructure sectors, beyond aviation.
Solid Waste	C+	C+	The nation's operating municipal landfills are declining in total numbers, but capacity has remained steady due to the construction of numerous regional landfills. In 2002, the United States produced 369 million tons of solid waste of all types. Only about a quarter of that total was recycled or recovered.
Transit	C-	D+	Transit use increased faster than any other mode of transportation--up 21%--between 1993 and 2002. Federal investment during this period stemmed the decline in the condition of existing transit infrastructure. The reduction in federal investment in real dollars since 2001 threatens this turnaround. In 2002, total capital outlays for transit were $12.3 billion. The Federal Transit Administration estimates $14.8 billion is needed annually to maintain conditions, and $20.6 billion is needed to improve to "good" conditions. Meanwhile, many major transit properties are borrowing funds to maintain operations, even as they are significantly raising fares and cutting back service.
Wastewater	D	D-	Aging wastewater management systems discharge billions of gallons of untreated sewage into U.S. surface waters each year. The EPA estimates that the nation must invest $390 billion over the next 20 years to replace existing systems and build new ones to meet increasing demands. Yet, in 2005, Congress cut funding for wastewater management for the first time in eight years. The Bush administration has proposed a further 33% reduction, to $730 million, for FY06.

America's Infrastructure G.P.A. = D Total Investment Needs = $1.6 Trillion (estimated 5-year need--does not include security investment needs)

A = Exceptional B = Good C = Mediocre D = Poor F = Failing I = Incomplete

Each category was evaluated on the basis of condition and performance, capacity vs. need, and funding vs. need.

[Sapiens]

Re: Tragic symbol of need to build US infrastructure

Excellent post Bill!

I smell money!

[FRED]

Re: Tragic symbol of need to build US infrastructure

Fantastic work, bill, again!

With the piling on of the media with this tragic event, we now have all the ingredients of an infrastructure bubble.

Next step: which companies are the best pure-plays to invest it?

[zoog]

Re: Tragic symbol of need to build US infrastructure

From CNN's main page:

[quigleydoor]

Re: Tragic symbol of need to build US infrastructure

With the piling on of the media with this tragic event, we now have all the ingredients of an infrastructure bubble.

Next step: which companies are the best pure-plays to invest it?

Follow Macquarie Bank of Australia. Who in America is working with them?

The Macquarie-branded equity vehicles (MIC, MFD, MGU) are not good pure plays, because these entities hold existing infrastructure. They are good for inflation-protection and a steady dividend (unless their leveraged financing craps out).

The pure plays are the investment banks that focus on infrastructure (aping Macquarie Bank itself), and the diversified construction conglomerates.

Morningstar ran this article on 7/20/2007: http://news.morningstar.com/article/....asp?id=199177, fingering GE, Siemens, and ABB.

[jk]

Re: Tragic symbol of need to build US infrastructure

in june 1983 part of the mianus river bridge collapsed. this was and is part of interstate 95, which runs up and down the whole east coast. it is a major artery. a few people were killed - luckily the collapse was during the night. there was a lot of running around and checking out bridges, but no money river flowed.

i spoke with a guy today who is a transportation consultant and asked his take on whether there'd be a building/repair spree. he said he was sure that people were out checking bridges, but that he would wait to get the specifics on this collapse before making any predictions about future spending commitments. he'd be looking at the river flow, floods, currents, erosion, how high the water splashed, as well as structural elements of the bridge itself.

so i'd be cautious about major predictions as yet.

[Spartacus]

Re: Tragic symbol of need to build US infrastructure

Let's hope no one puts a link to this post on a FREEper friendly site.

Whenever I've written (on any forum other than this one) that USers might be better served in every way by spending money at home instead paying private armies of mercenaries or instead of buying bombs and machineguns and helicopter gunships I get angrily, insultingly shouted down .

[bill]

Re: Tragic symbol of need to build US infrastructure

in june 1983 part of the mianus river bridge collapsed. this was and is part of interstate 95, which runs up and down the whole east coast. it is a major artery. a few people were killed - luckily the collapse was during the night. there was a lot of running around and checking out bridges, but no money river flowed.

i spoke with a guy today who is a transportation consultant and asked his take on whether there'd be a building/repair spree. he said he was sure that people were out checking bridges, but that he would wait to get the specifics on this collapse before making any predictions about future spending commitments. he'd be looking at the river flow, floods, currents, erosion, how high the water splashed, as well as structural elements of the bridge itself.

so i'd be cautious about major predictions as yet.

Timing is everything.

http://blog.cleveland.com/openers/20..._voinovic.html

Bridge collapse suddenly makes Voinovich 'infrastructure' bill important

Posted by Stephen Koff August 02, 2007 11:51AM

Categories: Breaking News, Impact
Voinovich
It's hard to say whether it would have gotten traction in the current Congress. It didn't in the previous Congress. But with the collapse yesterday of the I-35W bridge in Minnesota, George Voinovich's "National Infrastructure Improvement Act" could wind up on the floor of the Senate as quickly as tonight, Voinovich's office says. (See our package on the Minneapolis collapse here.) A former Ohio governor and Cleveland mayor, Voinovich is conditioned to pay attention to roads, bridges and sewers. He has complained for several years that the nation's infrastructure is deteriorating and too little is done about it.
So he wants a national commission to examine the deteriorating condition of the nation's roads, bridges, drinking water systems, dams and other public works. The commission would have until 2010 to complete its study, including an analysis of improvements that are needed to keep up with demand and anticipated economic growth.
Voinovich's bill to establish the commission was co-authored by Sen. Tom Carper, a Delaware Democrat. Norm Coleman, a Minnesota Republican (and former St. Paul mayor), and Hillary Clinton, a New York Democrat, signed on as co-sponsors.
It's way too early to say a commission would have somehow prevented the bridge collapse in Minneapolis, since the cause of the collapse isn't known yet. But the Minnesota tragedy almost certainly will provide a new push for the bill.
"Our infrastructure is collapsing due to insufficient funding," Voinovich said when reintroducing the bill in March. "And the deterioration of our nation's waterways and infrastructure systems are impacting our economy, our environment and the overall welfare of the American people."

[Sapiens]

Re: Tragic symbol of need to build US infrastructure

in june 1983 part of the mianus river bridge collapsed. this was and is part of interstate 95, which runs up and down the whole east coast. it is a major artery. a few people were killed - luckily the collapse was during the night. there was a lot of running around and checking out bridges, but no money river flowed.

i spoke with a guy today who is a transportation consultant and asked his take on whether there'd be a building/repair spree. he said he was sure that people were out checking bridges, but that he would wait to get the specifics on this collapse before making any predictions about future spending commitments. he'd be looking at the river flow, floods, currents, erosion, how high the water splashed, as well as structural elements of the bridge itself.

so i'd be cautious about major predictions as yet.

jk,

I agree about being prudent. The present circumstances are different than back in 1983. Looking at the present macroeconomic landscape, the U.S. consumer is tapped out and we are poised for a major economic contraction if the monetary aggregates stagnate or cease to grow.

What this opportunity does, is that it presents the politicos a way to sell the public a new “green”, efficient infrastructure.

In short, this is playing out just like Japan’s bubble burst, they built bridges to nowhere just to keep their economy going.

Time to look for companies with potential in the civil engineering arena, e.g. Bechtel et al. And their allied trades.

http://www.bechtel.com/

-Sapiens

[jk]

Re: Tragic symbol of need to build US infrastructure

if i'm not mistaken, bechtel is private.

[Tet]

Re: Tragic symbol of need to build US infrastructure

if i'm not mistaken, bechtel is private.

Steve Bechtel is a good family friend of whoever is in power, yes
Bechtel is private, you can't give out the bribes required for construction contracts any other way. ;)

[EJ]

Re: Tragic symbol of need to build US infrastructure

Please see Note on Infrastructure.

[Guest]

Re: Tragic symbol of need to build US infrastructure

Perhaps the word 'tragic' in the thread title is inappropriate, as this topic's posts seem more focused upon investment implications?

It might be more appropriately entitled :

<< Investment themes of interest emerging subsequent to the Minnesota bridge collapse >> ?

[FRED]

Re: Tragic symbol of need to build US infrastructure

Perhaps the word 'tragic' in the thread title is inappropriate, as this topic's posts seem more focused upon investment implications?

It might be more appropriately entitled :

<< Investment themes of interest emerging subsequent to the Minnesota bridge collapse >> ?

Yes, that's more accurate. All bubbles need an event to galvanize the popular imagination and engage the popular media to kick them off. The IPO of Netscape comes to mind. Sometimes the event is tragic.