March 17, 2009 1

REBUILDING AMERICA

Ramanuja Chari Kannan PE FASCE

© Popular Mechanics

March 17, 2009 2

INFRASTRCUTURE, STIMULUS AND

THE REALITY

• ASCE Report card

• Stimulus Package

• Consequences of inaction

• Not just roads and bridges

• Action Plan Now and Future

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OVERALL GRADED = Poor

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REPORT CARD METHODOLOGY

• CAPACITY• CONDITION

• FUNDING• FUTURE NEED• OPERATION & MAINTENANCE

• PUBLIC SAFETY• RESILIENCE

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IN SUMMARY

CATEGORY 2001 2005 2009

CUMULATIVE GPA

D+ D D

ESTIMATED 5-YEAR NEED

$1.3 T $1.6 T $2.1 T

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THE STIMULUS PACKAGE

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Call for action

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An action plan from ASCE

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ASCE’s Principles

• Create jobs

• Long term benefits

• Maintenance/ Fix it First

• Accountability

• Public heath and safety

• Economic benefit

• Sustainable

• Environmental benefit

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Stimulus Package - key figures

• Highways ----$27 billion• Transit -------$8.4 billion• High speed rail ----$8 b• Airport improvements---

$1.3 billion• Energy infrastructure ---$11

billion

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Stimulus package- key areas

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March 17, 2009 13

Oversight

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Florida Infrastructure reportEvery $1 in ports generates $6.90 of economic activity.

NPR report "Every $1 billion on infrastructure helps support some 35,000 jobs."

Center for American Progress $100 billion in a green infrastructure spending = create 2million jobs in 2 years.

Federal Spending = Stimulus?

March 17, 2009 15

Julian Vella, Partner, Head of Infrastructure, KPMG

March 17, 2009 16

Government action in 2007!

…….government is cranking up its infrastructure investment plans in an effort to head off an economic downturn, and in the process hoping to resuscitate shattered business and consumer confidence. The move has important implications for all layers of government together with financiers, investors and a range of public and private sector enterprises.

March 17, 2009 17

Rudd Government?The Rudd government is cranking up its infrastructure investment plans in an effort to head off an economic downturn, and in the process hoping to resuscitate shattered business and consumer confidence. The move has important implications for all layers of government together with financiers, investors and a range of public and private sector enterprises.

March 17, 2009 18

That Rudd Government!

March 17, 2009 19

From KPMG Australia

Government had established a new entity, Infrastructure Australia, its initial priorities are to:

• Complete a national Infrastructure audit by the end of 2008;

• Create an infrastructure priority list for COAG consideration by March 2009 (since brought forward to December 2008)

• Develop best practice guidelines for public-private partnership.

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Why should the Federal government intervene?

March 17, 2009 21

DJIA Raw BEV chart

Great Depression

WW II

Oil crisisS & L Iraq

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Federal Spending

Infrastructure Spending = Economic stimulus

QED

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THE CONSEQUENCES OF

INACTION

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A FAILING INFRASTRUCTURE CANNOT SUPPORT

A HEALTHY ECONOMY

ASCE JANUARY 28, 2009 RELEASE

March 17, 2009 25From airamerica.com/lionel

March 17, 2009 26

ALSO, THE BRIDGE IS OUT AHEAD

March 17, 2009 27

Highway Trust Fund Is Nearly Out of Gas- Transportation Chief Calls for $8 Billion (Washington Post Sept. 6, 2008) (Mary Peters)

The Highway Trust Fund has increased exponentially. “Meet The Press” Blue Texan Monday February 2, 2009 10:25 am

The Reality

The Highway Trust Fund has $70 billion short fall … options include 10c increase in gasoline tax or toll revenues. (“MSNBC” March 8, 2009)

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Economist David H. Wang (April 15, 2008 - to Bloggingsocks)

…there is one potential growth engine: domestic infrastructure work.

…United States has largely ignored the condition of its infrastructure for more than 30 years, Wang said, and work needs to be done. "But you can only ignore it for so long . . . deny investment, then it bites back,"

Real Stimulus

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•The Stimulus package $787 b•$111 billion for infrastructure•$43 billion for energy projects.

•i.e. “Rebuilding” for 5.2% of 2.1 trillion!•<1% of projected 2009 GDPRecovery.gov

Real Numbers

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Closer at home….

Texas is getting $2.25 billion in transportation stimulus package money. . . . . . . . transportation officials say the state's needs are far greater. . . . . . . .a . . citizens' committee outlined what it saw as $313 billion in road and bridge work necessary for Texas before 2030.

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BUT THEN…….

"I just want you to know that no good deed will go unpunished," joked …….. ……………. before the commissioners last week. "We will not be happy with whatever you finally decide.”

• KELLEY SHANNON Associated Press Writer © 2009 The Associated Press March 1, 2009 from Houston Chronicle.

March 17, 2009 32

ARRA is not OSB

• ARRA is a newly authorized stimulus package. • Omnibus Spending Bill (OSB) passed for $410

billion is an authorization to keep the Federal Government running for 6 months.

• The $410 billion OSB is reported to contain 9309 items of “Earmarks” estimated at $7.525 billion.

• Whose ears are marked and where is the Pork headed?

March 17, 2009 33

Top 5 beneficiaries of the $7,525,836,096 “Earmarks”

California $568,730,493

Texas $370,046,650

Mississippi $324,976,918

Florida $251,823,596

New York $245,083,122

TOTAL $1,760,660,779

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Top 5 earmarks for Texas

Dallas Rapid Transit LRT $87,974,716

Gulf Intercoastal Waterway $29,586,000

Houston-Galveston channel $20,766,000

Sims Bayou, Houston $19,426.000

Houston Metro Transit $15,000,000

TOTAL $173 million+

March 17, 2009 35

ASCE RECOMMENDATIONS

1. INCREASE FEDERAL SPENDING

2. PROMOTE SUSTAINABILITY

3. DEVELOP PLANS AT ALL LEVELS

4. ADDRESS LIFE-CYCLE COSTS

5. INCREASE AND IMPROVE INVESTMENT FROM ALL STAKEHOLDERS

March 17, 2009 36

BEYOND INFRASTRUCTURE

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IT IS NOT JUST ROADS AND BRIDGES

• WE ALSO NEED TO FOCUS ON

• Energy

• Education

• Sustainability

• Partnership

March 17, 2009 38

ENERGY

SOURCE Quadrillion BTU in 2008

Fossil fuels (oil, gas, coal)

85.307

Nuclear fission 8.214

Renewable (Biofuels) 6.922

Hydroelectric 2.869

Geothermal 0.343

Wind, solar 0.336

March 17, 2009 39

The Wind in Spain stays mainly on the grid

• Spain's Windmills Produce Record Amount Of Electricity On Thursday.

• (The Financial Times 3/6, Mallet, Mulligan)

• Picture credit Mike Roper

March 17, 2009 40

Huh?• "at 11.09am, the windmills were

producing 11,203MW - the highest output ever - equivalent to 29.5 per cent of Spanish demand at that time." The article continues, "For much of yesterday, wind was Spain's single largest source of electricity. Before dawn, when demand was low, wind turbines contributed up to 42 per cent of electricity supply."

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Side effects may cause…..

• Passenger In Sea After Ship Breaks Loose 9:48pm UK, Friday March 06, 2009High winds have ripped a cruise ship from its dock, breaking the vessel's gangway as passengers were disembarking and tipping an elderly man into the sea.

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EDUCATION

• ASCE BOK (2) 2008

The Vision: Civil Engineers will be entrusted by society to create a sustainable world and enhance the quality of life

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From KPMG Australia (2007)

It dovetails with another cherished government policy – increasing investment in education to produce a more skilled and flexible workforce.

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Shortage of Civil Engineers

• Lack of knowledge• Lack of luster• Less glamorous than IT

(K-12 students, parents, etc.• No self promotion• No outside promotion (TV,

movies etc.)• Mild political influence

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SUSTAINABILITY

• Design Life• Value• ROI• Stakeholders

Voyager 1 and 2

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Value

• 4 planets• 88.84 AU (0.12T km)• 15.1 hour

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AN ACTION PLAN

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The 50 to 100+ crowd

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Can this be achieved?

• Average Design Life = 50 to 100 years• Value = Meet today’s demands and be

flexible to meet growth• ROI = Let it last beyond the last payment• Stakeholders = Our future generations • Eco- friendly = The primary responsibility

March 17, 2009 50

PARTNERSHIP

• The stimulus package is barely sufficient to rebuild the nation.

• The longer we delay, the more it will cost• Private investment can be made for public use if the

returns assure profitability.• PPP has become the preferred way of funding large

infrastructure projects

March 17, 2009 51

Public Investment in Private Projects

• WORST : Building Stadiums with pubic money for private teams.

• BEST : Building projects with 50+ years’ life for public use, albeit with returns going to the funding agency, e.g.. Invest in power companies to develop alternative sources of energy.

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Private investment in private projects - that help the economy

• ExxonMobil To Invest Up To $150 Billion Over Five Years. (The New York Times (3/6, B2, Mouawad)

• plans to start nine new projects this year that will pump the equivalent of 485,000 barrels of oil a day, enough to supply one-third of U.S. East Coast refineries

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Private Investment in Public Projects - Exemple supérieur

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Millau Viaduct - France

• 2.48 km long• Seven cable-stayed spans• Maximum height of tower 343 m• Average clearance below 270 m• Four lanes• Built in 4 years• Fully privately funded• Total cost €389 million• Developers collect tolls for 75 years

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Action plan- Upcoming legislation

• Surface Transport Authorization• Aviation Program Authorization• Clean Water Act• Water Resources Development Act• Civil Engineering Research Programs

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Get involved

• Write a letter• Express your opinion

March 17, 2009 57

Key Contact

• Sign up for key issues• Follow the progress• ASCE Webinar on the Economic

Stimulus Now Available Online• Congressional Fellows Program

- (March 2010 next)

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For real action - get elected

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CONCLUSION

• Stimulus plan is a drop in the bucket• Keep the pressure alive• Prioritize• Take action• Think ahead• Educate