Infrastructure unleashed: How the United States can secure the promise of Biden's infrastructure law
Infrastructure investment has often been the driving force of growth, development, prosperity, and social change. This is achieved through the jobs it creates, the places it connects, the people, power and products it transports and enhances. Successes echo down through the ages, from mammoth private initiatives like the transcontinental railroads through to government programmes such as the Public Works Administration and its iconic Hoover Dam.
The new Infrastructure Investment and Jobs Act, signed into law by President Biden in November 2021, has the potential to pave the way for investment that can power a more inclusive economy and that aims to address the fallout from the global pandemic. As an industry it is up to us to convert the overall vision of the Act into action and successful outcomes.
As its names suggests, the Act is a document of two intrinsically connected halves: infrastructure investment and jobs. On the one hand, it is focused with the finance, prioritisation and delivery of key infrastructure – directed towards helping the economy, left-behind areas of society, and tackling global heating. On the other, it aims to improving lives and livelihoods, providing new jobs that are secure and well paid, ensuring minority businesses are at the heart of any investment, and focusing on reshoring production and manufacture to firm up United States businesses.
Identifying a pipeline
Now the ink is dry on the Act, we face the more substantial task of delivery. Our sector is aware of the benefits of a clear, long term, programmatic approach to deliver major projects – and this will take strong leadership and a unified, strategic, national plan.
Aware of the challenges ahead, the President has chosen an individual responsible for overseeing the implementation of the Act: former New Orleans Mayor Mitch Landrieu. Landrieu helped New Orleans build back from the devastation of Hurricane Katrina, and the hope is that this experience will mean he knows how to ‘get things done’.
His leadership will need to galvanise activity across the 50 states and specific sectors from transportation to utilities and healthcare to housing. What is missing – and something which would make his task a lot easier – is a fully developed national infrastructure plan. The Act stops short, offering instead categorial prioritisation for funding appropriations.
Mayor Landrieu is aware that to improve the chance of success he needs to make up for this shortfall and speak directly to states and constituencies – and he has already put out a call for governors to appoint their own infrastructure coordinators to streamline this process.
Working with local leaders is a vital way to understand their ‘big ticket’ programmes and how resources and funding should be prioritised to best provide a catalyst for further development and investment.
Focusing on ‘shovel-worthy’ projects
But this does not mean just starting with the so-called ‘low hanging fruit’. There is always a temptation to focus on ‘shovel ready’ projects first, especially when many areas will have to already use a significant amount of their appropriations just to return infrastructure to a state of good repair after years of budget gaps and underinvestment.
It’s understandable to want to show results quickly, but a proper assessment and understanding is needed of which projects will actually have the greatest impact. Call these ‘shovel worthy’ projects – as measured by robust and multi-faceted business cases which include proper assessments of social as well as economic value.
This Act has the potential to deliver a step change in the decarbonisation agenda in the United States, and encouragingly makes specific provisions for investment in electrifying transit networks, new federal electric vehicle fleets, and localising production and manufacture.
Such assessment will also make it clearer how this investment programme can follow a modernising agenda – not just rebuilding, but building smarter, more resilient, more sustainable infrastructure that is better than before.
Success will come from the private and public sectors collaborating to innovate in these areas, and from a thorough assessment of sustainability credentials throughout every stage of the supply chain.
Catalysing and sustaining funding
Cooperation between the private and public sectors is not just practical, it’s necessary – with a reported $3.5tn infrastructure deficit in the United States, funding and efficient delivery can only be achieved through public-private partnerships (PPPs).
This Act does include potentially landmark funding – but its success will be judged not only on how this funding is spent, but on how it attracts more. Building a bedrock of future self sustaining investment.
To secure private funding now and in the future, the government needs to show that procurement and delivery do not have to be long and drawn out, that risks will be shared, and that infrastructure can provide long-term, reliable return on investment.
The collaboration must also extend to how we measure outcomes – more than in dollars and cents, but for wider social value. This reflects the importance of robust, holistic business cases and procurement strategies that put social value at their heart. The Act implements checks on value for money, but there is a missing link.
It should go even further to check on value to society in the wider sense. The Act is not lacking in progressive steps – and it is clear that there is an understanding that investment in job creation must also be an exercise in building a more inclusive workforce, working to reduce inequality and to benefit the environment.
It makes the Minority Business Development Agency (MBDA) permanent, as well as expanding it, and makes more highly enforced labor standards and wages a prerequisite for investment.
The Act also sets out $73bn for energy infrastructure transformation, including transport electrification, investment in clean energy generation, carbon capture and storage, and wildlife and biodiversity protection and management.
It is encouraging to see this mindset shift – showcasing infrastructure’s key role in social development and change. As a sector we know the part we all have to play in building a better society, and if we do our part then this Act can be an engine for change.
We must work together to transform the vision of this Act into reality and deliver real progress for the American people.