What construction wants from Trump's infrastructure plan
When President Donald Trump gave his State of the Union address last month, the construction industry — and the nation — got a brief look at the scope of his long-awaited infrastructure plan, but Congress and the White House must still hammer out the details of that proposal.
Construction Dive asked industry leaders to weigh in on what they would like to see in a major, national infrastructure initiative. Here's what a variety of experts had to say.
Michael Burke, chairman and CEO, AECOM:
We’re encouraged President Trump is making infrastructure renewal a priority, and we’re looking now to Congress to not only flesh out the details of a bill — but to approve a plan during this session that advances economic growth and delivers reliable, modernized infrastructure. We can’t have an 'America First' policy if infrastructure is last. Policymakers can work to incentivize private investment and expedite permitting approval processes to accelerate infrastructure development, and these are important pillars to a successful plan.
But Congress must ultimately come up with a long-term solution to shore up federal trust funds that support highways, inland waterways and ports. Inaction is no longer an option. Our nation’s aging infrastructure is now the greatest impediment to maximizing economic growth and prosperity, and disrepair costs American families more than $3,400 a year.
Derya Thompson, senior vice president, Thornton Tomasetti's Weidlinger Transportation practice:
President Trump’s plan to increase infrastructure spending is a great opportunity for the architecture, engineering and construction industry. If combined with more efficient permitting and regulatory processes, it will definitely attract the private investment that is necessary to improve the nation’s infrastructure.
We are already seeing big changes in the procurement and delivery of transportation projects and greater collaboration between local and state governments. A united group effort by local, state and federal governments and a commitment to work collaboratively to address the issues would definitely accelerate the process, convince the private sector to realize this massive plan and allow for the successful and accelerated modernization of this country’s infrastructure.
We see this new infrastructure plan as a great opportunity to further innovation and look forward to making lasting contributions to resilient transportation projects at all levels across the United States.
David Crane, vice president, government affairs, Autodesk:
Policy discussions should include ways to save time on projects, reduce errors, and cut waste to maximize taxpayer dollars — more infrastructure, better infrastructure, with lower cost.
We can use technology developed in the U.S. to digitize design and construction, expanding on policy and practices already in place at the General Services Administration, the Army Corps of Engineers and the Veterans Administration. These agencies use Building Information Modeling tools and processes when building new structures or renovating existing ones. MAP-21 included incentives for using advanced technologies, such as 3D modeling, in transportation projects.
From 2011 to 2015, the U.K. delivered £3 billion British pounds in efficiency savings to their taxpayers following the introduction of a digital construction program and construction strategy. In 2014 to 2015 alone, the policy produced £855 million of savings.
A $1 trillion U.S. infrastructure investment could potentially realize an additional $200 billion in spending power if we met the U.K.’s 20% goal — savings realized through greater collaboration up front among project partners, fewer mistakes, and better consultation with the public.
Two hundred billion dollars in extra spending power would be enough to replace every structurally deficient National Highway System (NHS) and non-NHS bridge in the United States at a cost of $47 billion, specifically all structural bridge items directly related to main bridge components such as deck, superstructure, and substructure for common bridges, according to the Federal Highway Administration’s National Bridge Inventory 2016. There would still be many billions more to invest in public transit, roads and other critical infrastructure.
Ben Brubeck, vice president of regulatory, labor and state affairs, Associated Builders and Contractors:
America can get the most value for infrastructure investment by instituting these key policy cornerstones:
First, lawmakers and regulators must capitalize on President Trump’s executive order to increase the speed of project approval while respecting sensible environmental regulations.
Second, America needs to embrace public-private partnerships (P3s), which can minimize risks and allow partners to finance and plan a project’s entire construction and life-cycle costs up front, delivering long-term value to taxpayers.
Third, we must increase support for vocational and technical education and promote innovative private-sector workforce development programs to address the current shortage of skilled professionals in construction through initiatives like President Trump’s executive order and task force on expanding apprenticeships.
Fourth, regulators should embrace BIM, drones, pre-fabrication, automated construction, 3-D printing and other emerging technologies that will improve industry safety, efficiency and reduce costs.
Finally, instituting an inclusive policy guaranteeing that all Americans can compete to make America's infrastructure great again would be a win-win for taxpayers and the economy. Regulations pushing government-mandated project labor agreements, which discourage competition at the expense of small businesses and local companies, drive up prices and prevent the 86% of the construction workforce who are not affiliated with labor unions from working on federal and federally assisted construction projects.
Ted Chapman, senior director, Public Infrastructure Group, S&P Global Ratings:
There is a general consensus on the need to prioritize infrastructure spending in the United States. Without specific details on the infrastructure plan to date, it is uncertain whether there will be a true increase in total funding or simply a reclassification of existing ongoing appropriations.
Historically, U.S. infrastructure has been funded mainly by state and local governments, and some of them are already facing their own difficult budgetary decisions. It remains to be seen what the role of private capital will be, as well as how prioritization — or even consensus — will be achieved, especially in light of the greater debate surrounding the federal budget.
We also anticipate that on the heels of 2017, in which the U.S. suffered over $306 billion in natural disasters damage, communities or even rate regulators could place greater urgency on resiliency-related infrastructure projects, perhaps even over other existing needs. Therefore, the impact to the credit markets is still unknown at this time.
William Eliopoulos, construction law and P3 expert partner, Rutan & Tucker:
If there is to be federal infrastructure legislation in 2018, P3 leaders would like to see it introduced sooner rather than later. There is significant concern that this prolonged anticipation without delivery has actually suppressed state and local governments from starting needed P3 infrastructure projects while they wait to see whether they might be able to take advantage of cheaper financing and additional funding from new federal legislation.
P3 Industry leaders will be looking at how the new infrastructure legislation provides funding and financing incentives and guarantees for P3 infrastructure development at the state and local levels. The [Transportation Infrastructure Finance and Innovation Act (TIFIA)] and [Water Infrastructure Finance and Innovation Act (WIFIA)] are existing successful federal programs that provide such incentives and guarantee to allow state and local agencies to sponsor P3 transportation and water infrastructure projects using lower-cost financing rather than purely private [financing].
Will Congress expand these programs and extend them to P3 projects for airports, rail, educational, civic (e.g., city halls, courthouses, convention and civic centers) and other types of projects?
Will Congress extend the availability of tax-exempt private activity bonds — currently largely limited to affordable housing projects — to state and local P3 Infrastructure projects, in order to help lower the cost of financing and boost the affordability of badly needed state and local infrastructure projects for public entities?
Will political considerations influence the states earmarked for these federal funds and programs? Some leaks indicate that rural “heartland” infrastructure projects will receive a disproportionate amount of the funds under the legislation.
Will the infrastructure legislation restructure the federal “scoring” guidelines for new federal public works projects which currently dis-incentivize federal agencies from utilizing P3 as a project delivery method?
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