Trump’s $1 tril­lion chal­lenge: how to re­build the crum­bling land of the free

US in­fra­struc­ture is blighted by dis­as­ters and woe­ful in­vest­ment, finds David Mill­ward

The Sunday Telegraph - Money & Business - - Business -

Com­pared with the dev­as­ta­tion that be­fell Puerto Rico, Florida and Texas, the win­ter storm that bat­tered New Eng­land last month was pretty small beer, even if one gust in Mas­sachusetts did reach 93mph. Nev­er­the­less it left 1.3m peo­ple with­out power, the most since Hurricane Sandy five years ago. Maine took a par­tic­u­larly se­vere pum­melling with 400,000 peo­ple cut off – equiv­a­lent to a third of the pop­u­la­tion.

Events of the past few months have pro­vided a stark re­minder of the sever­ity of the US cli­mate and the havoc it can wreak, whether it is hur­ri­canes in the south, storms – and later bliz­zards – in the north or wild­fires in the west.

Re­cov­ery of­ten seems painfully slow, rais­ing a fun­da­men­tal ques­tion about the state of Amer­i­can in­fra­struc­ture. Cer­tainly, it ap­pears to be strug­gling badly when it comes to cop­ing with what na­ture throws at it on a reg­u­lar ba­sis. Ac­cord­ing to the US Gov­ern­ment Ac­count­abil­ity Of­fice, the dam­age caused by ex­treme weather has cost the fed­eral gov­ern­ment $350bn (£267bn) over the past decade.

In its lat­est re­port card, the Amer­i­can So­ci­ety of Civil Engi­neers gives the US in­fra­struc­ture a with­er­ing D+ and es­ti­mates it will cost

$4.59 tril­lion to bring it up to stan­dard, nearly four times more than in 2001.

While there has been some­thing of an im­prove­ment in rail, in many other sec­tors, from avi­a­tion to tack­ling haz­ardous waste, the sit­u­a­tion has got worse. “I think we have fallen be­hind,” says the so­ci­ety’s Brian Pal­lasch. “I think we have taken a gen­er­a­tional va­ca­tion from in­vest­ing in our pro­fes­sor of cul­tural an­thro­pol­ogy at Mcgill Univer­sity in Mon­treal.

“In Europe the power sys­tem is cen­tralised, in the US it has a his­tory of be­ing patched to­gether. It is a hotchpotch and old. We had the same storms in Que­bec and we were fine, while the power was out in Ver­mont.

“If any­thing, in­fra­struc­ture in Europe is over­built and ex­ces­sive be­cause of a need for re­dun­dancy, while in the US it is un­der­built.”

Part of the prob­lem is that the US puts its power lines on poles rather than bury­ing them un­der­ground. It just takes a de­cent gust of wind to bring a tree down on top of a cable and those liv­ing nearby lose elec­tric­ity.

Of course, bury­ing power lines would be costly. There is some dis­pute over how much ex­tra it would cost.

A Bri­tish study sug­gested that un­der­ground lines are five times more ex­pen­sive than those over­head. A US es­ti­mate puts the pre­mium con­sid­er­ably higher.

North Carolina looked at mov­ing power lines un­der­ground and con­cluded it would cost $41bn and take about 25 years to carry out. It con­cluded that the cost was “pro­hib­i­tively ex­pen­sive”.

But Amer­ica’s in­fra­struc­ture prob­lems go far wider than an un­re­li­able elec­tric­ity sup­ply.

The in­ter­net can be patchy.

‘Amer­i­can in­fra­struc­ture is crum­bling to Third World sta­tus. We run risk of be­ing akin to a ba­nana repub­lic’

‘I think we have taken a gen­er­a­tional va­ca­tion from in­vest­ing in our coun­try’s in­fra­struc­ture’

Ac­cord­ing to the Fed­eral Com­mu­ni­ca­tions Com­mis­sion, 39pc of ru­ral Amer­i­cans still lack ac­cess to high-speed in­ter­net. On tribal lands, that fig­ure rises to 41pc.

There is mount­ing con­cern over the state of Amer­ica’s wa­ter sup­ply with the 1.2m miles of lead pipes across the coun­try reach­ing close to the end of their use­ful life.

The road net­work is hardly in great con­di­tion. Not only is the high­way net­work in­ad­e­quate for cop­ing with the vol­ume of traf­fic, but many are rid­den with pot­holes. It is also es­ti­mated that 70,000 bridges – one in nine – are struc­turally de­fi­cient.

While Europe boasts a sleek rail­way sys­tem, the net­work in the USA is piece­meal and in many places piti­fully slow, de­spite some im­prove­ments over the past decade or so.

Pub­lic trans­port in many cities is poor, no­tably in New York where the com­muters, es­pe­cially those com­ing in from the sub­urbs, re­gard de­lays as a way of life. There are oc­ca­sional shafts of light. The twin cities of Min­neapo­lis and St Paul in­vested in light rail. The 11-mile Green Line cost a bil­lion dol­lars but the trans­for­ma­tion has been stag­ger­ing.

Los An­ge­les and Den­ver have also reaped the ben­e­fit of in­vest­ment in lo­cal trans­port. But while cities are pre­pared to in­vest, there seems to be greater re­luc­tance when it comes to the fed­eral gov­ern­ment.

The con­sen­sus among ex­perts is that the US has fallen be­hind many of its com­peti­tors.

“It is a prob­lem of sev­eral tril­lion dol­lars that is needed just to do the re­pairs to bring US in­fra­struc­ture up to world stan­dards,” says Ros­a­beth Moss Kan­ter, Ar­buckle Pro­fes­sor at Har­vard Busi­ness School and au­thor of Move: Put­ting Amer­ica’s In­fra­struc­ture Back in the Lead.

“It is man­i­fested in just about ev­ery in­dus­try. Much of our in­fra­struc­ture, es­pe­cially in the north east, dates back to the 19th cen­tury.

“We have tech­nol­ogy de­vel­oped in the US, which is ca­pa­ble of ad­dress­ing the prob­lems. We have the po­ten­tial to re­duce traf­fic con­ges­tion with au­ton­o­mous ve­hi­cles and self-driv­ing cars. There is the op­por­tu­nity to em­bed sen­sors into our roads to iden­tify where re­pairs are needed.

“We are not yet storm proof and part of the prob­lem is whether or not we ac­knowl­edge cli­mate change.”

Oliver Mcgee, who worked in Bill Clin­ton’s White House sci­ence of­fice, has a pretty stark view.

“Amer­i­can in­fra­struc­ture is crum­bling to Third World sta­tus. If we don’t im­prove it, we run the risk of be­ing akin to a ba­nana repub­lic.”

Don­ald Trump’s ad­min­is­tra­tion has pledged to act, promis­ing to spend $1 tril­lion to re­build the coun­try’s roads, tun­nels and bridges. But given the size of the US na­tional debt – and the promised tax cuts – where the money is com­ing from is a moot point, es­pe­cially with the pres­i­dent back­ing off sug­ges­tions that the pri­vate sec­tor will help pick up the bill. Poor in­fra­struc­ture is hold­ing Amer­ica back, says James Mccann, an econ­o­mist with Aberdeen Stan­dard In­vest­ments.

“There has been a long-term lack of in­vest­ment,” he says. “If you look at po­ten­tial growth it has been slow­ing down hand in hand with the coun­try’s wors­en­ing in­fra­struc­ture.

“In­stead of Amer­ica be­ing the world’s rich­est coun­try be­cause of its in­fra­struc­ture, it is the world’s rich­est de­spite its in­fra­struc­ture.”

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