Construction Informer

Perhaps one of the most compelling things to come out of a recent conference gathering of U.S. mayors was a call for a stimulus package aimed at infrastructure. Apparently cities have a bundle of projects ready to go and just need what of course everybody seems to need these days- some money. 

By one estimate there are at least 4,500 infrastructure projects ready to be built in 2009 that need more than $24.4 billion. Moving ahead with those projects is expected to create about 250,000 jobs, according to the mayors. The group further contends that metropolitan economies create 90 percent of the gross domestic product and that infrastructure build-out will go a long way toward alleviating a sour economy. According to Tom Cochran, the conference event CEO:

Mayors tell us that the job situation is dire and only getting worse. The unemployment numbers indicate a rapid deterioration in the job outlook for Americans, and thousands more jobs will be lost as each month passes with no action from the lame-duck Congress. Main Street is hurting. Metro economies of America need jobs now and our economy desperately needs help at the Main Street level. Our Main Street Stimulus is the answer.

The projects include transit, highway, green jobs, schools, public safety and public housing. The mayors have asked Congress to approve $89.8 billion in a visit to Capitol Hill on Oct. 29th.

From my vantage point however, it doesn’t seem Congress has moved beyond the haze of inaction that has stifled it for so long. Perhaps it will wake up momentarily but the bets are that not much will happen until after the holidays.

Maintenance May Be An Issue: Pervious concrete is figuring into Minnesota’s efforts to minimize runoff that is increasing phosphorous levels in its lakes and rivers. But pervious has some challenges. It costs about $30 more per yard than regular concrete and it shouldn’t be used in areas where the water table is too close to the surface of the ground. In northern climes the use of salt and sand for ice control also adds some complexity since pervious surfaces are supposed to be vacuumed a couple of times a year, otherwise their pores plug up from dirt and debris. It’s not known just how much more maintenance will be needed because of the use of ice control products.

Cost Increases Know No Limits: As if the builders of infrastructure didn’t have enough to contend with now prices are jumping at double digit rates. In June highway and street construction materials prices were up 19 percent compared to the same month last year. Iron was the biggest increase at 97 percent followed by diesel fuel at 85 percent and asphalt paving and block manufacture at 14 percent. So, while the dollar value of work put in place is up, actual volume of work completed is down between 5 and 7 percent.

Mortgage Debacle Continues to Amaze: As soon as the FED and others in the administration announced the plan to make money available to Freddie Mac and Fannie Mae with the words, “we don’t anticipate they will have to use it, but we wanted it in place just in case,” I knew there was another bailout in the works. Why don’t they just come out and say they’re going to need half a trillion to keep those entities afloat? That way at least some PR value could be realized by just calling the whole mess “economic shock and awe.”

Now we hear about the losses mounting at both companies. Fannie officials acted surprised that its higher risk notes called Alt-A loans were accounting for 50 percent of its second quarter losses. What’s surprising to me is throughout all this mortgage loan mess the people who are supposed to understand markets and financing (because they run companies that engage in those businesses) act dazed and confused about what is going on. Then, all of a sudden, they “discover” they have more money invested in the suspect mortgages than they knew. How does that happen?

It looks like there is a movement afoot that might help to stimulate new ideas for funding the repair of the nation’s aging infrastructure. This is good news as we wait for the government to start functioning again and taking care of things at home.

The American Society of Civil Engineers estimates the country needs to spend more than a trillion dollars on infrastructure over the next five years. Thirteen governors have pledged their support of efforts to increase federal funding to help address this problem. Additionally there will be state and locally-elected people on board. The coalition press release summed up its efforts this way:

As state and local governments continue to pay more of the costs and the condition of our infrastructure further deteriorates, America’s infrastructure crisis becomes more critical every day. One of the primary jobs of the coalition is to create an environment where infrastructure funding is treated like the national priority it should be.

Building America’s Future points to infrastructure as an important component to global competitiveness, quality of life, sustainability, and border and national security. Maybe there are ways for interested people in ACE to get involved.

In A Related Release: An international roadway safety organization is calling for 11 specific roadway safety initiatives in order to achieve its goal of zero roadway deaths. The American Traffic Safety Services Association (ATSSA), founded in 1969, is calling for initiatives that address:

• a highway safety improvement program;
• strategic highway safety plans;
• work zone safety;
• high risk rural roads;
• roadway hardware;
• brightness and visibility of signage;
• older drivers;
• mitigating congestion;
• funding roadway safety; and more.

You should expect to see more on this, and on surface transportation in general since it is time to reauthorize surface transportation legislation.