It will not be surprise to anyone observing international infrastructure investment trends that Colombia is currently planning massive investments in road, port and airport infrastructure, particularly roads.
Colombia through the National Infrastructure Agency (ANI), and using Public Private Partnerships is planning to invest $25 Billion in Roads, $3 Billion in Railways, and $2 Billion in Airports/Ports.
This proposed program was commented on Economist Magazine in June 2013, which was critical of slow progress and potential for the program to face extended hold ups in implementation.
Luis F. Andrade, President, ANI, wrote the Editor of Economist Magazine in August 2013 clarifying that Colombia had increased infrastructure expenditure, the funds already committed and that in 2015 and 2019, Colombia will spend 1.5% of GDP on this program, raising in time to the target 3% of GDP.
In my previous blog post America’s Infrastructure – Bridging the Gap noted that the US spends 0.5% of GDP on roads, rising the Australia spending 1.25% of GDP puts the planned level of Colombia’s investment into perspective.
Of course, the USA, Canada, Australia, UK, Western Europe and other OECD countries have made sustained investment in road infrastructure over a number of decades, and no longer need to spend 3% of GDP on new road infrastructure development.
Colombia is planning to build 4,970 miles of roads by 2021. By comparison the US Interstate System, started in 1956 took 35 years to build 47,714 miles at a cost of $425 Billion (2006 dollars).
It is interesting to note that at the peak of US interstate road construction in the late 1950’s and early 1960’s the US was spending 3% of GDP on roading and water infrastructure capital expenditure – about the same in relative terms as the current Colombia percentage of GDP goal.
The implications for infrastructure management are for the future for Colombia, but we know these implications right now in the US.
Simply – infrastructure built in large build-outs in short periods of time (say less than a decade for the peak US interstate construction), all start to reach end of design life in about the same time. For sections to the US interstate system, that is now the case.
What we know from observing the period 1956 to 2014 in the US is that funds that were available for the original construction are not necessarily available for the renewal and/or reconstruction of infrastructure. That in turn creates the problem that is currently being experienced by US infrastructure managers – where are the required funds coming from?
Infrastructure management planning techniques assist with the resolution of this problem.
Management of the entire lifecycle of infrastructure through initial build, operation, maintenance, renewal and/or reconstruction can be analysed and lifecycle costs calculated.
This in turn allows for long term provision of the funding required to keep assets in service at the level required throughout the whole infrastructure lifecycle.
This issue will be a challenge for Colombia. As it builds out infrastructure over the next decade, and then faces the issues of ensuring that in the longer term the maintenance and renewal of infrastructure is financially sustainable.
The issue for infrastructure managers in the US, Canada, Australia, UK and other OECD countries is that longer term financial provision for infrastructure renewal hasn’t been made. There are backlogs of replacement, and often additional funding is very difficult to secure.
At least with infrastructure management we have the disciplines and tools to analyse and manage these issues.