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Presented at Houston ASCE meeting in March 2009. As relevant today as it was then. Rebuilding our infrastructure should be our top priority and the only positive way to move up.
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March 17, 2009 1
REBUILDING AMERICA
Ramanuja Chari Kannan PE FASCE
© Popular Mechanics
March 17, 2009 2
INFRASTRCUTURE, STIMULUS AND
THE REALITY
• ASCE Report card
• Stimulus Package
• Consequences of inaction
• Not just roads and bridges
• Action Plan Now and Future
March 17, 2009 3
OVERALL GRADED = Poor
March 17, 2009 4
REPORT CARD METHODOLOGY
• CAPACITY• CONDITION
• FUNDING• FUTURE NEED• OPERATION & MAINTENANCE
• PUBLIC SAFETY• RESILIENCE
March 17, 2009 5
IN SUMMARY
CATEGORY 2001 2005 2009
CUMULATIVE GPA
D+ D D
ESTIMATED 5-YEAR NEED
$1.3 T $1.6 T $2.1 T
March 17, 2009 6
THE STIMULUS PACKAGE
March 17, 2009 7
Call for action
March 17, 2009 8
An action plan from ASCE
March 17, 2009 9
ASCE’s Principles
• Create jobs
• Long term benefits
• Maintenance/ Fix it First
• Accountability
• Public heath and safety
• Economic benefit
• Sustainable
• Environmental benefit
March 17, 2009 10
Stimulus Package - key figures
• Highways ----$27 billion• Transit -------$8.4 billion• High speed rail ----$8 b• Airport improvements---
$1.3 billion• Energy infrastructure ---$11
billion
March 17, 2009 11
Stimulus package- key areas
March 17, 2009 12
March 17, 2009 13
Oversight
March 17, 2009 14
Florida Infrastructure reportEvery $1 in ports generates $6.90 of economic activity.
NPR report "Every $1 billion on infrastructure helps support some 35,000 jobs."
Center for American Progress $100 billion in a green infrastructure spending = create 2million jobs in 2 years.
Federal Spending = Stimulus?
March 17, 2009 15
Julian Vella, Partner, Head of Infrastructure, KPMG
March 17, 2009 16
Government action in 2007!
…….government is cranking up its infrastructure investment plans in an effort to head off an economic downturn, and in the process hoping to resuscitate shattered business and consumer confidence. The move has important implications for all layers of government together with financiers, investors and a range of public and private sector enterprises.
March 17, 2009 17
Rudd Government?The Rudd government is cranking up its infrastructure investment plans in an effort to head off an economic downturn, and in the process hoping to resuscitate shattered business and consumer confidence. The move has important implications for all layers of government together with financiers, investors and a range of public and private sector enterprises.
March 17, 2009 18
That Rudd Government!
March 17, 2009 19
From KPMG Australia
Government had established a new entity, Infrastructure Australia, its initial priorities are to:
• Complete a national Infrastructure audit by the end of 2008;
• Create an infrastructure priority list for COAG consideration by March 2009 (since brought forward to December 2008)
• Develop best practice guidelines for public-private partnership.
March 17, 2009 20
Why should the Federal government intervene?
March 17, 2009 21
DJIA Raw BEV chart
Great Depression
WW II
Oil crisisS & L Iraq
March 17, 2009 22
Federal Spending
Infrastructure Spending = Economic stimulus
QED
March 17, 2009 23
THE CONSEQUENCES OF
INACTION
March 17, 2009 24
A FAILING INFRASTRUCTURE CANNOT SUPPORT
A HEALTHY ECONOMY
ASCE JANUARY 28, 2009 RELEASE
March 17, 2009 25From airamerica.com/lionel
March 17, 2009 26
ALSO, THE BRIDGE IS OUT AHEAD
March 17, 2009 27
Highway Trust Fund Is Nearly Out of Gas- Transportation Chief Calls for $8 Billion (Washington Post Sept. 6, 2008) (Mary Peters)
The Highway Trust Fund has increased exponentially. “Meet The Press” Blue Texan Monday February 2, 2009 10:25 am
The Reality
The Highway Trust Fund has $70 billion short fall … options include 10c increase in gasoline tax or toll revenues. (“MSNBC” March 8, 2009)
March 17, 2009 28
Economist David H. Wang (April 15, 2008 - to Bloggingsocks)
…there is one potential growth engine: domestic infrastructure work.
…United States has largely ignored the condition of its infrastructure for more than 30 years, Wang said, and work needs to be done. "But you can only ignore it for so long . . . deny investment, then it bites back,"
Real Stimulus
March 17, 2009 29
•The Stimulus package $787 b•$111 billion for infrastructure•$43 billion for energy projects.
•i.e. “Rebuilding” for 5.2% of 2.1 trillion!•<1% of projected 2009 GDPRecovery.gov
Real Numbers
March 17, 2009 30
Closer at home….
Texas is getting $2.25 billion in transportation stimulus package money. . . . . . . . transportation officials say the state's needs are far greater. . . . . . . .a . . citizens' committee outlined what it saw as $313 billion in road and bridge work necessary for Texas before 2030.
March 17, 2009 31
BUT THEN…….
"I just want you to know that no good deed will go unpunished," joked …….. ……………. before the commissioners last week. "We will not be happy with whatever you finally decide.”
• KELLEY SHANNON Associated Press Writer © 2009 The Associated Press March 1, 2009 from Houston Chronicle.
March 17, 2009 32
ARRA is not OSB
• ARRA is a newly authorized stimulus package. • Omnibus Spending Bill (OSB) passed for $410
billion is an authorization to keep the Federal Government running for 6 months.
• The $410 billion OSB is reported to contain 9309 items of “Earmarks” estimated at $7.525 billion.
• Whose ears are marked and where is the Pork headed?
March 17, 2009 33
Top 5 beneficiaries of the $7,525,836,096 “Earmarks”
California $568,730,493
Texas $370,046,650
Mississippi $324,976,918
Florida $251,823,596
New York $245,083,122
TOTAL $1,760,660,779
March 17, 2009 34
Top 5 earmarks for Texas
Dallas Rapid Transit LRT $87,974,716
Gulf Intercoastal Waterway $29,586,000
Houston-Galveston channel $20,766,000
Sims Bayou, Houston $19,426.000
Houston Metro Transit $15,000,000
TOTAL $173 million+
March 17, 2009 35
ASCE RECOMMENDATIONS
1. INCREASE FEDERAL SPENDING
2. PROMOTE SUSTAINABILITY
3. DEVELOP PLANS AT ALL LEVELS
4. ADDRESS LIFE-CYCLE COSTS
5. INCREASE AND IMPROVE INVESTMENT FROM ALL STAKEHOLDERS
March 17, 2009 36
BEYOND INFRASTRUCTURE
March 17, 2009 37
IT IS NOT JUST ROADS AND BRIDGES
• WE ALSO NEED TO FOCUS ON
• Energy
• Education
• Sustainability
• Partnership
March 17, 2009 38
ENERGY
SOURCE Quadrillion BTU in 2008
Fossil fuels (oil, gas, coal)
85.307
Nuclear fission 8.214
Renewable (Biofuels) 6.922
Hydroelectric 2.869
Geothermal 0.343
Wind, solar 0.336
March 17, 2009 39
The Wind in Spain stays mainly on the grid
• Spain's Windmills Produce Record Amount Of Electricity On Thursday.
• (The Financial Times 3/6, Mallet, Mulligan)
• Picture credit Mike Roper
March 17, 2009 40
Huh?• "at 11.09am, the windmills were
producing 11,203MW - the highest output ever - equivalent to 29.5 per cent of Spanish demand at that time." The article continues, "For much of yesterday, wind was Spain's single largest source of electricity. Before dawn, when demand was low, wind turbines contributed up to 42 per cent of electricity supply."
March 17, 2009 41
Side effects may cause…..
• Passenger In Sea After Ship Breaks Loose 9:48pm UK, Friday March 06, 2009High winds have ripped a cruise ship from its dock, breaking the vessel's gangway as passengers were disembarking and tipping an elderly man into the sea.
March 17, 2009 42
EDUCATION
• ASCE BOK (2) 2008
The Vision: Civil Engineers will be entrusted by society to create a sustainable world and enhance the quality of life
March 17, 2009 43
From KPMG Australia (2007)
It dovetails with another cherished government policy – increasing investment in education to produce a more skilled and flexible workforce.
March 17, 2009 44
Shortage of Civil Engineers
• Lack of knowledge• Lack of luster• Less glamorous than IT
(K-12 students, parents, etc.• No self promotion• No outside promotion (TV,
movies etc.)• Mild political influence
March 17, 2009 45
SUSTAINABILITY
• Design Life• Value• ROI• Stakeholders
Voyager 1 and 2
March 17, 2009 46
Value
• 4 planets• 88.84 AU (0.12T km)• 15.1 hour
March 17, 2009 47
AN ACTION PLAN
March 17, 2009 48
The 50 to 100+ crowd
March 17, 2009 49
Can this be achieved?
• Average Design Life = 50 to 100 years• Value = Meet today’s demands and be
flexible to meet growth• ROI = Let it last beyond the last payment• Stakeholders = Our future generations • Eco- friendly = The primary responsibility
March 17, 2009 50
PARTNERSHIP
• The stimulus package is barely sufficient to rebuild the nation.
• The longer we delay, the more it will cost• Private investment can be made for public use if the
returns assure profitability.• PPP has become the preferred way of funding large
infrastructure projects
March 17, 2009 51
Public Investment in Private Projects
• WORST : Building Stadiums with pubic money for private teams.
• BEST : Building projects with 50+ years’ life for public use, albeit with returns going to the funding agency, e.g.. Invest in power companies to develop alternative sources of energy.
March 17, 2009 52
Private investment in private projects - that help the economy
• ExxonMobil To Invest Up To $150 Billion Over Five Years. (The New York Times (3/6, B2, Mouawad)
• plans to start nine new projects this year that will pump the equivalent of 485,000 barrels of oil a day, enough to supply one-third of U.S. East Coast refineries
March 17, 2009 53
Private Investment in Public Projects - Exemple supérieur
March 17, 2009 54
Millau Viaduct - France
• 2.48 km long• Seven cable-stayed spans• Maximum height of tower 343 m• Average clearance below 270 m• Four lanes• Built in 4 years• Fully privately funded• Total cost €389 million• Developers collect tolls for 75 years
March 17, 2009 55
Action plan- Upcoming legislation
• Surface Transport Authorization• Aviation Program Authorization• Clean Water Act• Water Resources Development Act• Civil Engineering Research Programs
March 17, 2009 56
Get involved
• Write a letter• Express your opinion
March 17, 2009 57
Key Contact
• Sign up for key issues• Follow the progress• ASCE Webinar on the Economic
Stimulus Now Available Online• Congressional Fellows Program
- (March 2010 next)
March 17, 2009 58
For real action - get elected
March 17, 2009 59
CONCLUSION
• Stimulus plan is a drop in the bucket• Keep the pressure alive• Prioritize• Take action• Think ahead• Educate