Worley Blog

SOME MOVEMENT ON INFRASTRUCTURE

Posted on: April 10th, 2020 by Clifford F. Lynch

 

For the past few weeks, we have read very little but news concerning the far-reaching, and too often tragic circumstances under which we are living and working. This has been important however, in that I believe most will agree that the better we understand the Covid – 19 Virus, the better we will be equipped to protect ourselves, our families, and our companies. As a result, though, some supply chain related developments have not been widely reported.

Shortly before we realized how bad the outbreak was, there were some encouraging developments in the infrastructure improvement area that have generated very little discussion. While there is no way to predict when our government, including Congress, will be back to normal (if ever), it is somewhat encouraging to know there are some developments waiting in the wings. In January of this year, the House Committee on Transportation and Infrastructure suggested a five – year, $760 B program that they called the “Moving Forward Framework”. The broad outline contains projects for the whole spectrum of infrastructure – highways, railroads, water, ports, aviation, energy, and more. The plan is significant in that it provides for far more partnerships with states and cities than we have seen before.

Some of the key priorities are targeted funding for local government developments, such as investment in bridges, bus programs, medical transportation for certain segments of the population, and improved local transportation. Broader provisions include new technology, investments in rail infrastructure, aviation noise, and unmanned aircraft.

In February, President Trump submitted a budget that included $1T for infrastructure improvement. This would consist of $810B that would reauthorize the FAST Act highway legislation that expires in September, and another $190B expenditure for other improvements. (The FAST (Fixing America’s Surface Transportation) Act was signed into law by President Obama in 2015, and funded surface transportation programs for fiscal years 2015-2020. Among other things, FAST authorized $226.3B for roads, bridges, bicycling, and walking improvements.)

The new budget includes $602B for highways over the next ten years, $20B for motor carrier safety, $16B for loans, and $17B for rail infrastructure.

The additional $190B would be spent on new grant programs that would reduce permit approval times for large projects ($60B); discretionary grants for a new “Moving America’s Freight Safely and Efficiently” program to improve safety and efficiently ($50B); and a new bridge rebuilding program, particularly in rural areas where  80% of the 47,000 U.S. bridges classified as in poor condition, are located.

The good news about both plans is that the improvements would create over 10 million new jobs. (In the past two weeks, 10 million jobs have vanished according to The New York Times.)

Infrastructure improvement has been controversial throughout President Trump’s term with both Democrats and Republicans pushing their own agendas. The fact that this is an election year will do nothing to curtail that. More significantly, “show me the money”. Trillions are being spent on the Corona Virus, and this will remain a priority for some time. Hopefully, Congress can unite and find a way to accommodate both needs without bankrupting the country.