Impact At Scale

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Shifting the US Infrastructure Debate: From Potholes to Performance

By Dan Carol, Senior Advisor

September 12, 2016

For too long, the policy debate about infrastructure in the United States has been stuck in neutral, focused almost exclusively on how the U.S. Congress can find more money for new roads and bridges. Strange, since about two-thirds of the infrastructure spend happens at the local and state level and the bulk of our infrastructure deficit is a $3 trillion deferred maintenance bill.

But a growing group of practitioners, including The Beeck Center, think the best way to convince Congress, and the public, to spend more on infrastructure – both new and old is to focus our attention on improving the efficiency and performance of our current infrastructure asset base.

Take the Bipartisan Policy Center’s recent report that called for an inventory of the nation’s infrastructure assets and life-cycle valuation of all new investments.  The key for making this shift: ending political and media bias which favors new ribbon-cuttings with a new focus on the skill sets and incentives that will ensure that America’s $37 trillion infrastructure base is well-maintained.

Similarly, Mckinsey Global has also issued a series of well-researched studies showing how much additional value these new “performance-based infrastructure” techniques could generate.  The core findings: if infrastructure owners were to adopt life-cycle infrastructure outcome and efficiency policies across the globe, McKinsey projects net savings of 40 percent from current investment levels.   Deployed in the U.S., such better performance measures could save $150-$250 billion annually across all infrastructure modes.

This emphasis on infrastructure efficiency and life-cycle performance isn’t just getting the most bang for our current infrastructure bucks.   A “high-performance” framework is critical if we are to convince taxpayers to support new investments in the kinds of infrastructure we will need in the 21st century such as distributed energy and advanced transportation technologies, the use of sensors and other new technologies that allow cities to more efficiently manage wastewater treatment loads during high rainfall periods, and the rising importance of broadband for economic development and innovation.

Renewed public sector and press emphasis on life-cycle asset performance has another advantage – it will accelerate the development of public-private partnerships.  Doing so will enable cities, counties and states to tap some of the over $8 trillion in U.S. public pension fund and impact investor funding out there for making new infrastructure investments in the U.S.

While public-private partnerships are not a panacea for a core level of public support for critical infrastructure, countries like Canada and the United Kingdom have shown the way for engaging private sector capital and expertise and revving up multi-billion investment markets to build public infrastructure.

The key: creating local, regional or national centers of expertise that utilize performance-based infrastructure methods to develop a “pipeline” of projects that the private sector can invest in.   I have proposed to take it further: by putting government CFOs at the center of infrastructure spending.

Want to learn more about where infrastructure is headed? Many of these questions will be explored this week at an event co-sponsored by Georgetown’s Urban and Regional Planning program on September 15th, featuring U.S. Transportation Secretary Anthony Foxx.   The day before, the Georgetown Climate Center will release a green infrastructure interactive toolkit to will help practitioners better manage the life-cycle risks and costs of building infrastructure in an era of changing climate and extreme weather.

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