1. Built environment
  2. Infrastructure
July 10, 2017updated 30 Jul 2021 1:50pm

The big hurdle for US national infrastructure? Soaring project costs

The talk these days of a major infrastructure bill passing through US Congress is both welcome and encouraging for American commuters and businesses. But regardless of how much money Congress decides to spend on sorely needed projects, the debate is sadly lacking in strategies to address the astronomical cost of infrastructure projects in the United States.

Our public debate should focus squarely on the question of how to maximise infrastructure investment by reducing the overall cost. These high costs are huge impediment to getting anything done.

It cannot be understated that this is a major problem. If America’s policymakers can tackle this problem and reduce costs and reduce project delivery timelines, more beneficial projects will happen. If more projects happen, American commuters and businesses get real traffic relief.

So how do we get the best bang for the buck?

Under the normal project delivery process a highway can take up to 10 years to deliver. For transit projects, the process can take up to 15 years.

Let’s not kid ourselves: the process Congress has allowed to be created is both fiscally and environmentally irresponsible. But there’s enough blame to go around.

According to the environmental community, transit and toll lanes reduce congestion and fossil fuel emissions. This is true. The catch is that environmentalists want to study every project for a dozen years. A transit project should not take that long.

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Additionally, the conservatives in Congress don’t want to change the policy because it’s politically advantageous for them to talk about how cumbersome the process is. Yet taxpayers bear the cost of the environmental review (NEPA) process. There are ways to trim this process, as well as the multi-agency duplications for reviews that will save time and money, while not harming the environment.

A transit project planned today may be projected to cost $1bn. But by the time the project gets through the process, it could end up costing four or five times that. Over 10 to 15 years, the cost of materials, land, and labour increases – and will only continue to do so at an accelerated pace now that unemployment is low and wages and interest rates are rising.

Furthermore, when a state transportation department or a metropolitan planning agency announces a proposed project or potential roadway alignment, I have seen the private sector advocate and achieve zoning changes to increase the value of the land in the event government will need it for the road. I have seen private individuals and companies pull building permits and construct something, only to make sure there is a negotiated settlement with the transportation department at a much higher price. What the taxpayers and conservatives don’t understand is that added cost comes from the same taxpayer dollars they always claim to be protecting. In fact, they are as much a part of the hustle as anyone.

Let’s end the hustle. We should shorten the delivery timeline and be more responsible with tax dollars. Everyone loves to complain about $5,000 toilet seats or $2,000 hammers at the defense department, but no one complains about the $2bn increased in project costs due to the project delivery process. Let’s start to give a damn.

The cost is astronomical and out of control. While we need to protect our planet and our ecosystems, America needs a major systemic overhaul for that to happen.

If we wanted more environmentally friendly transit projects to happen, we ought to be vigilant fiscal hawks. As it stands today, it is environmentally irresponsible to sit idle while transit projects take more time and cost more money than highway projects. If we do nothing, the status quo incentive will be to build more road projects because they’re cheaper.

The US government has already studied these costs. I was a member of the National Surface Transportation Policy and Revenue Study Commission, which published its report in 2008. Included in that report were recommendations, including a section on “speeding project delivery”.

The report notes that

“to reduce overall project delivery times for major transportation projects, the time to complete environmental reviews must be shortened, in conjunction with other measures that address conventional strategies for implementing projects once they clear environmental review.”

We listed a series of recommendations that are still pending. They unfortunately did not make it into the latest transportation authorisation bill, the Fixing America’s Surface Transportation (FAST) Act.

Project delivery times remain anything but “FAST”. Congress can and should reform the project delivery process so that American taxpayers can get the best value possible under a federal infrastructure plan. It can and should be done.

Tom Skancke is chief executive of TSC2 Group, a management consulting firm, and is executive director of the Western Regional Alliance, an association of western transportation and metropolitan planning organisations. This article reflects his own views, not those of the Nevada Department of Transportation.

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