Are Infrastructure Funds Being Wasted?

Re: Is a significant part of the problem a common one among government programs - i.e., that a good deal of the money isn't being spent wisely?

I'm sure. Part of the problem is that, often, the determination of "wisely" is subjective.

Simple. "Wisely" is something that benefits "me". If it doesn't benefit me it's unwise. Even dropping to the level of waste, fraud and inefficiency. This is a problem we wouldn't have if everyone wanted the same thing from the government. They don't.

OK. We agree that government spends money unwisely. Government owns and runs a lot of "infrastructure" we need to function for our benefit. The cost of running and maintaining it is covered by broad based taxes and in some cases fees paid by users.

But government spends money unwisely. Therefore some part of the cost of operating and maintaining (O&M) infrastructure is spent unwisely. If we assume that private enterprise spends money more wisely than government then it would make sense to put the infrastructure into the hands of private investors. This should mean that O&M expenses will be enough less to cover a suitable return for investors, and still in the end make our sum of fees and taxes lower.

If you with your almost religious belief in the purity and sanctity of capitalism like the sound of this then vote for it. By the way, I know where there are some good deals on collateralized debt obligations that will guarantee a 15% return. And they are AAA rated!!

Ed Weldon

Good answer, and even for us in the industry, getting realistic and meaningful condition assessments on the burried infrastructure is a challenge. Exhuming 10m of pipe from a 10km pipeline only really tells you about that piece that you've seen (and potentially damages it in the process.).

The community finds it hard to understand that sewer pipes need to be renewed BEFORE they reach failure. We are often criticised for "digging up perfectly good pipes", but at least the management here is looking at ongoing renewals based on system deterioration, rather than a minimalistic approach.

If we (here at this facility) wait for the avalanche of failures that would happen 25 years from now, we do not have the resources to manage, co-ordinate or fund that. RESPONSIBLE asset management has us renewing some assets earlier in life so that the projected escalation in failures is cut down to size.

Fortunately, we are able to (in a restricted manner) set prices so that we operate in a sustainable manner, in that future generations will pay for the service they receive as a result of actions taken now.

The article focuses on federal expenditures, while most water systems are under local control.

I am pretty sure, based on my experience with developing independent water supply systems for isolated locations, most municipal water systems do not charge enough for their product to cover operating costs and maintenance, and the cost of finding new sources when old ones deteriorate.

There seems to be a general attitude (supported by the United Nations) that everyone is "entitled" to free (or, at least, cheap) potable water- without any sort of universal policy for paying for the development and maintenance of the water supply. Which means, costs must be met from the general revenue. If one puts several layers of obfuscation between the user and the source of funds providing the service, then one can get away with a whole lot of "inefficiency" and "waste". Meanwhile, since the user isn't "paying" a realistic fee directly for the service, there is no incentive to conserve or use the resource wisely.

The solution is to make sure you have a whole lot of bottled water stored with your emergency rations...

The real problem here is the cost of involving multi-layered bureaucratic government, which is usually very inefficient. But, then again, most infrastructure is owned and operated by governments...local, state and federal.

Here in New York State we have to deal with the antiquated "Wicks Law", which is a required labor law which requires that construction workers on public works projects (payed for by John Q. Public via tax monies and fees) are paid the prevailing wage rates. Or in other words, the public is forced to pay for these projects to subsidize Unions or non-union workers paid at union rates, plus all of the social "bennies". It's Social program grown out of control and cost us taxpayers here plenty! I and other professional engineers that I know consider it a pure farce if there ever was one. By the existence of this law, the real cost of labor in regards to public construction work is over 2.5X what it should be.

In my experience, work completed by union workers does not result in a guarantee of excellent or superior workmanship. I've actually have seen work on non-public projects completed by non-union workers that was in most cases equal to or far surpassed that done by union workers. Actually, how many times have you visited a publicly-funded project job-site only to observe 6 union guys piled around a hole in the ground "supervising" the sole laborer in the group digging that hole with his shovel? I bet plenty of times, as I have! It really pissed me off seeing all this waste!!! I'm not trying to break unions, but rather I'm reporting my own experiences here.

Come on, here, Captain. You've run enough projects to know that your labor cost is not the primary cost driver for these projects. You identify the real culprit- multi-layered bureaucratic government, and the multiple volumes of paper work (documents no one ever reviews unless there is a lawsuit) that gets stored forever. Even if you cut your direct labor cost in half, you would not realize any significant savings when looking at total project costs. How often is your labor force standing about waiting for the inspector to sign off on a phase of the project before they can proceed to the next phase?

It is not really an issue of union labor versus non-union labor. Quality workmanship is a matter of personal motivation. The real issue with unions is that they make promises (and take money from their members to "guarantee" these promises) that can not be kept.

It's not the laborers that drive the costs up but the upper branches (management and engineers) and consultants. Avg salary for a labor $14 avg salary. For engineers or managers on site $50+. The project I'm on in AZ has 3 consultants and two of us in the company to just run the environmental impacts of the project. Guess who gets the loins share we charging over $150 an hour for each consultant. Our company is getting $60 an hour for each manager. The average ground laborer is about $12; equipment is about $16. Specialty workers ironworkers, carpenters, wielders, etc. are in the $20. Under your calculations laborers should make less than $6.00 or below minimal wage. No that's the way to stimulate the economy.