Using Strategic Asset Management in Infrastructure Investment

In the US, investing in infrastructure is not the problem but overbuilding, delayed costs, and thinking too far ahead.

The Governing article, “U.S. History Shows Spending on Infrastructure Doesn’t Always End Well” describes the infrastructure investments that took place in the United States in the last two centuries:

“They built canals to move freight in the 1830s and 1840s. Governments subsidized railroads in the mid-and late 19th century. They created local sewage and water systems in the late 19th and early 20th centuries, and then dams and irrigation systems through much of the 20th century. During World War II, massive amounts of public money were spent building and expanding ports, factories, airfields and shipyards. And after the war, highway construction – long a state and local project – became a federal endeavor.”

According to the article, these infrastructure investments do not always achieve their purpose, and the costs far exceed their benefits.

The problem is the overbuilding of infrastructure. The excitement of building these massive structures and the prospect of new spending and job creation can make it hard to think or plan into the future, such as how infrastructure will be maintained and where to get funding to meet service demands, it mentions.

The article gave examples of overbuilding infrastructure and the economic, social, and environmental consequences it brought to the country.

• Railroad building dominated in the 19^th century, overtaking the construction of canals. But the country built excessive amounts of railroads that resulted in bankruptcies and regional and national crises that Americans referred to as the ‘railroad depressions.’  Environmental damage followed due to increased mining to support railroad construction, while railroad networks have encouraged large-scale agriculture.
  
  
• The municipal water and sewage projects in the early 20^th century were considered a huge success, especially in reducing diseases and creating liveable modern cities. But achieving this entails draining a lake and reducing farmland to a desert – draining Los Angeles Owens Valley or flooding San Francisco’s Hetch Hetchy Valley, which incurred a massive price, one that is still being paid until now, according to the article.
  
  
• The construction of dams in the mid-20^th century has brought hydroelectricity and made irrigation possible, leading to large-scale crop production. However, crop production at an industrial level is water-intensive, while dams, on the other hand, have entirely changed the river and impacted iconic species in the area.
  
  
• The interstate highway system that has changed the spatial arrangement and established the American car culture has also brought congestion, pollution, and carbon emissions, contributing significantly to climate change.

Infrastructure investment has always been viewed as key to creating good jobs and boosting economic recovery. But as history shows us, infrastructure investments should go beyond economic costs and benefits and consider social equity, environmental health, and sustainability.

The application of strategic asset management can help achieve these goals and avoid repeating infrastructure mistakes in the past.

In conjunction with the strategic asset management approach, considering the whole of asset lifecycle costs also assists in analyzing what infrastructure is required and affordable.