GUEST EDITORIAL Better Infrastructure – How Much and From Where? What comes to mind when you think of or hear about “infrastructure?” Do you think of roadways and bridges? For those in urban center s , thi s may include underground or elevated mass transit systems. Perhaps, the term also includes waterways in addition to paved surfaces? Does the term conjure up strong emotions of gridlock and long delays to get to where you would like? Maybe it’s all of the above and more, along with memories of repair work and traff ic cones. Whatever association you likely have to the term, most of us will likely concede that the infrastructure system needs a lot of improvement, and the sooner the better. Even though it may be contrary to what we feel each time we leave our respective homes, considerable expenditures are made annually in various sectors to maintain or improve our infrastructure system. The U.S. construction marketplace is divided into 10 divisions. According to the FMI 2018 U.S. Construction Market Outlook Overview (2018), the total value of put-in-place construction in the U.S. for 2017 was approximately $1.23 trillion, and is forecasted to reach about $1.43 trillion by 2021, resulting in an average compound annual growth rate (CAGR) of $100 $120 $140 $20 $40 $60 $80 $0 Transportation Total Power Total Highway/Street Total Sewage/Waste Disposal Total Water Supply Total about 3.9% during that time. For the five divisions that comprise infrastructure (i.e., transportation buildings, power systems, highway and street structures, sewage and waste disposal, and water supply systems), the total value of put-in-place construction in the U.S. for 2017 was approximately $262.5 billion. The various portions of the infrastructure sector are expected to experience little growth (up to about 5%) in spending from 2017 to 2021. As highlighted in this issue’s cover story, “Our Nation’s Infrastructure in the Spotlight,” the ASCE 2017 Infrastructure Report Card indicated that an investment of about $2 trillion is needed to bridge the funding deficit across the 16 infrastructure categories that make up the five divisions. From where will this funding influx come? Apart from the Power sector (about 90% privately funded), the other four divisions are predominantly subsidized using public funding (i.e., authorizations from the government). Recently, lawmakers in the U.S. House of Representatives approved a bill (H.R. 408-2: Water Resources Development Act) that would authorize up Data Source: U.S. Federal Reserve Economic Data (http://research.stlouisfed.org) Dr. Antonio Marinucci, MBA, P.E. Managing Director, V2C Strategists Executive Editor, Deep Foundations to about $3 billion for dams, ports and harbors along with other projects. In March, the U.S. Congress passed a new spending bill, which will keep the government funded through September 2018, which included about $21 billion for infrastructure spending for water infrastructure projects by the Army Corps and Bureau of Reclamation such as clean drinking water, sanitary waste disposal systems, etc. It’s a great start, but there is still a large shortfall that needs to be addressed somehow and sometime soon. So, from where will the needed funds come? Historically, infrastructure projects used for and by the public are sponsored using funds allocated by federal, state and/or local governments via usage taxes (e.g., tolls, gas tax, etc.) and/or bonds. Infrastructure projects and structures with predominantly private ownership (e.g., power and energy systems) are sponsored using funds provided by a single owner, an ownership group and/or banking institution. Because of various funding shortfalls, hesitancy to provide large capital to projects, and to mitigate uncertainty within the marketplace, many entities (e.g., transportation agencies, education institutions, hospitals, etc.) are turning to alternative project delivery to generate the requisite funds while attempting to minimize risk (or at least transfer it to the appropriate party/ies) and accelerate the project schedule. Project/contract delivery methods are expanding from design-bid-build (DBB) and simple design-build (DB) to include alternatives to the traditional funding mechanism. Examples of alternative project delivery mechanisms include private-public partnerships (P3), progressive DB, engineering-procurement-construction DEEP FOUNDATIONS • JULY/AUG 2018 • 111 Total Construction Spending ($Billion) 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
