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I just received an alert from my friend, Kent Starwalt, Executive Vice President for the Tennessee Road Builders Association, announcing an important hearing on Thursday morning. House Transportation & Infrastructure Committee Chairman John Mica (R-Fla.) has invited ARTBA members to join a webcast and conference call tomorrow where he will provide an overview of his multi-year surface transportation reauthorization proposal.

WHEN: The webcast and call will both begin at 11:00 a.m. (Eastern).

HOW: Please click here (http://transportation.house.gov/) to watch the live webcast. Click on the red “Live Webcasts” button on right-hand side of the page.

Call (877) 229-8493 and enter code 18416 to join by phone (questions will be taken over the phone).

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In a room filled with more than a hundred highway and bridge contractors, yesterday Tennessee Governor Bill Haslam helped kick off the Tennessee Road Builder Association's "Day on the Hill" event.  Haslam's was a welcome voice to this group of business men and women who wanted to hear about ideas for growth, as well as future plans for the transportation industry in Tennessee.

"It matters that you're here," Haslam said to the participants. "It's really about people who make their passions and positions known in a way that the legislators can understand."

Haslam equated the state budgetary process to what businesses need to do: "What we are going to do going forward is take a whole different look at state government. We are going to do the same thing you do in your business."  Haslam then outlined some ideas to get the budget aligned, as well as how to promote growth.  "I don't think the Legislature creates jobs.  I think businesses do."

According to Haslam, the following three issues are key to a job development plan:

• Play offense.   It is important for the Administration to do what it can to attract businesses to Tennessee, whether through incentives or other efforts. 
• Review regulations.  It is also important to review current regulations to identify those that restrict growth.  While there is a need for regulation and oversight in any industry, including construction and transportation, there is a point where over-regulation stifles growth and you simply need to "get out" of their way.
• Analyze risk.  According to Haslam, businesses must be empowered to grow.  This can be done by taking part of the risk out of capital investment, primarily through tort report.  By addressing tort reform, Haslam's plan seeks to make the state more attractive to businesses seeking to relocate to Tennessee. 

You can listen to an audio version of Haslam's talk to the TRBA (.wav file).

Image: Kent Starwalt

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My friend Kent Starwalt of the Tennessee Road Builder's Association sent out a legislative update this morning about the tension between Obama Administration and the Republican controlled Congress on infrastructure investment.  

According to the Stateline article, the divisions over transportation investment include high-speed rail, roads, bridges and access to high-speed internet:

The president is trying to make the case that improving the country’s entire physical infrastructure—including roads and railways but also high-speed Internet connections—will make America more competitive and generate jobs in the short term. But GOP lawmakers, whose numbers surged following the November elections, want to scale back federal spending across the board, and they are especially suspicious of Obama’s emphasis on rail and transit.

A blog post by another friend, Evan Caplicki, earlier today may provide a feasible alternative to the debate above.  In his post on Public-Private Partnerships (PPPs) for Transportation, Evan discusses a Toolkit for Legislators released by the National Conference of State Legislatures.

It is no secret that states are struggling to meet their growing infrastructure needs with limited funds. Some states like Tennessee have a "pay as you go" program and will not borrow funds for roads and bridges projects.  But the Toolkit for Legislators suggests leveraging existing resources through the use of PPPs.  In its simplest form, PPPs agreements allow private companies to take on traditionally public roles in infrastructure projects, while keeping the public sector ultimately accountable for a project and the overall service to the public.  According to the NCSL report, 29 states and Puerto Rico have legislation addressing transportation PPPs and more than $46 billion has been invested in these projects over the last 20 years.

Can PPPs and other alternative financing programs revive highway and bridge construction?  As always ... it depends.  Here are my thoughts:

• PPPs can reduce the initial public investment through accelerated or more efficient delivery.
• PPPs don’t create new money, but instead rely on the private sector and other resources to help develop the infrastructure.  However, public funds will eventually be a part of the equation to pay back the private investment.
• PPPs can provide a feasible alternative to states contemplating investment in infrastructure, provided all the right pieces are in place (i.e., financing package, design and construction teams, legislative authority).

Thus, if the legislative framework is in place to support a PPP for transportation investment, then there will be opportunities for new highway and bridge projects to go forward.  Indeed, contractors with PPP experience are situated in the perfect spot as the debate of infrastructure investment continues on Capitol Hill.

 Image: Elliott P.

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In a new federal report released last week entitled "An Economic Analysis of Infrastructure Investment"(pdf), the Department of the Treasury, Council of Economic Advisers outlined why now is an optimal time to increase investment in transportation infrastructure.

The short twenty-five page report is, according to AGC, "a sobering reminder of the tremendous economic costs of years of under investment in the nation's transportation infrastructure." Some of these sobering facts include:

• America ranks 25 out of 32 OECD nations when asked about public satisfaction with the public transit systems in the world
• America ranks 17 out of 32 with respect to satisfaction with our roads and highways
• Almost 19 out of 20 Americans are concerned about America's infrastructure
• 84% of Americans support greater investment to address infrastructure problems

But the report is more than just an analysis of public support for infrastructure investment. The report notes that the United States is investing less in infrastructure than other nations. Significantly, we spend approximately 2% of GDP on infrastructure, a 50% decline from 1960. Other nations such as China and Europe, by contrast, spend close to 9% of GDP on infrastructure.

According to the report, now is the time to increase the nation's investment in transportation infrastructure based upon the economic impact of transportation investment (or under investment as the case may be) as indicated. 

So long as the Administration is committed to making a significant investment in rebuilding the nation's infrastructure, there is good reason to support a plan recommending more investment.  There are plenty of critics, as noted in this feature by Atlantic Wire, questioning: Is Now the Time For  an Infrastructure Overhaul?   However, in the end, the debate is largely a political one ... and commentary will remain just that ... commentary. 

Image: squeaks2569 on Flickr

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This morning I read Brad Heath's article in USA Today, suggesting that the stimulus funding for road repairs has detoured and by-passed large metro areas with significant road problems.

According to the USA Today study, half of the nation’s worst roads will receive only about 20% of the stimulus money allocated for street repairs. The reason—the roads were not shovel ready and were in too bad shape:

“The problem is a byproduct of a stimulus package designed to spend as fast as possible to revive the economy. Many roads are in such bad shape that repairs would take too long and cost too much to qualify for funds, says John Barton, head of engineering for Texas' Department of Transportation.

The result is that counties with the worst roads won't get much more repair money than counties with better roads. The 74 counties with half of the nation's bad roads will split $1.9 billion, records show; counties with no major roads in bad shape will split about $1.5 billion.”

Data compiled and reviewed by USA Today showed that many of the roughest roads needing repair were … let’s say … not ready for repair.  For example, state officials acknowledged that “Detroit's roads are in dire need of work, but say they didn't have enough ready-to-go projects there.”

According to Kent Starwalt, Executive Vice-President of the Tennessee Road Builders Association, the important question is not whether transportation projects are shovel ready, but rather, why weren’t these projects shovel ready?

“It would seem that if a jurisdiction’s roads are in really poor condition, they would have the necessary steps done to be able to move on projects when and if they did receive money. [Tennessee Department of Transportation] and many other state DOTs were well prepared for such a scenario. The cities were even given more time than the states in the stimulus bill to obligate any money they were to receive.”

This is more than just an issue of timing and money. One measure of the House transportation re-authorization bill includes the transfer of control from state departments to city and metropolitan planning organizations. However, Starwalt warns: “It should be obvious to everyone involved that the cities are not as efficient in getting projects out the door as state DOTs.”

This debate is interesting to those of us who follow the federal stimulus funds with the hopes that the funds actually impact the construction industry, the workers and employees involved in the projects and the local economies.

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