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You are here: Home / INFRASTRUCTURE ASSET MANAGEMENT / Is the US Infrastructure Plan Taking a Back Step?

Is the US Infrastructure Plan Taking a Back Step?

July 28, 2017 By Admin

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A national infrastructure asset management plan done right makes the economy more productive.

Building infrastructure means generating jobs. It also means better and safer road access, cleaner water and extensive water accessibility, more organized stable electrical supplies, and a well-improved lifestyle for the public.

The benefits are undeniably there, but while we can readily answer the “why”, the challenge here is answering the “how”.

We know why the United States needs a major infrastructure revamp, but how it will be done depends entirely on the direction of the current president.

And President Donald Trump is currently pointing heavily towards public-private partnerships as the solution to finally jumpstart the proposal to save ailing US public assets.

His infrastructure plan drew skepticism and experts are now wondering if maybe instead of pushing forward, the US might be stepping back.

How do regular US utility infrastructure management strategies deal with repairs and rehabilitations?

Under normal circumstances the US government can do two things:

First, it can pay the repairs directly through public funds. Or second, it can borrow money, use it for repairs, and then pay off the credit through exaction of fees from tolls or other taxes.

We initially thought that the new president will directly do the rehabilitation using people’s taxes or government money, following his pronouncements of his proposed 1 trillion allotment for infrastructure revitalization to be spent in 10 years.

As the current administration’s plan is unveiled, we realize that only 20% of the total budget will be supported by public funds.

And the rest? The government will likely make private corporations and investors pay for it.

This public-private partnership is his method of utility infrastructure management.

Under this plan, the government will offer huge tax breaks to the private companies and investors to encourage them to take part in the project.

Then, the public asset will be given to the assigned private company which can then charge the government for the service. This gives the private corporations the right to charge money from you, the public.

The downside is, the contracts usually last for many years and a hundred-year lease is entirely possible. And if the fees get a bit too onerous for the public, you must wait for a hundred years to legally get it over with.

In essence, a public-private partnership is not entirely a bad option. It can take different forms, but ideally, it is a collaborative agreement between a government and a private corporation to start infrastructure projects.

The question is, can this alone build America’s crumbling infrastructure?

With the country having a cumulative grade of D+, more than 600,000 defective bridges, around 2,000 hazardous old dams, and transit systems in constant repairs, we may need more than just public-private partnerships as an infrastructure asset management scheme to save US public utilities.

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Filed Under: INFRASTRUCTURE ASSET MANAGEMENT Tagged With: aging us infrastructure, infrastructure asset management, infrastructure management resources, utility infrastructure management

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