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U.S. infrastructure: “strong risk of failure”

RESTON, VA: March 09, 2017. The American Society of Civil Engineers (ASCE) says restoring U.S. infrastructure to its competitive position will cost the country 3.5 percent of GDP by 2025 because of a US$2.0 trillion, 10-year lack of funding by the U.S. Congress.

According to latest figures from the U.S. Department of Commerce, U.S. GDP by the fourth quarter of 2016 was US$18.56 trillion in current dollars.

Every four years the ASCE reviews and grades America's infrastructure. In its latest report it has awarded the country a 'D' overall and concluded: "The infrastructure is in poor to fair condition and mostly below standard, with many elements approaching the end of their service life. A large portion of the system exhibits significant deterioration.

"Condition and capacity are of serious concern with strong risk of failure," it added.

The 165 year-old association has graded 16 infrastructure elements from Aviation to Wastewater. Here are four that have a particular impact on trade:

Roads: The ASCE gives it a 'D' saying the country's roads are crowded, in poor condition, chronically underfunded and becoming more dangerous. Traffic delays cost America US$160 billion in wasted time and fuel in 2014. After years of decline, traffic deaths increased 7.0 percent between 2014 and 2015 to over 35,000.

DFW internationalRail: Because of regular investment, ASCE has awarded it a 'B'. The network carries one third of U.S. exports and delivers five million tons of freight each day. The private rail freight industry owns the vast majority of the nation's rail infrastructure and continues to make significant capital investment - US$27.1 billion in 2015 - to maintain it.

Ports: America's 926 ports only get a 'C+' despite being responsible for US$4.6 trillion or 26 percent of the U.S. economy. ASCE notes few ports have dredged deeper navigation channels to accommodate ever-larger box ships and landside port congestion is increasing despite investments in port expansion, modernization and repair.

Aviation: While the industry is marked by technologically advanced and economically efficient aircraft, the associated airport and air traffic control infrastructure is not keeping up says ASCE, awarding the sector a 'D'. With 24 of the top 30 major airports soon to experience "Thanksgiving traffic volume" at least one day a week, airports face a US$42 billion funding gap between 2016 and 2025.

Acknowledging Donald Trump's campaign pledge to spend US$1 trillion on America's failing infrastructure, ASCE is recommending Trump and the current Republican Congress do the following as a matter of urgency:

  1. Put the "trust" back into "trust funds." Dedicated public funding sources on the local, state, and federal levels need to be consistently and sufficiently funded from user-generated fees, with infrastructure trust funds never used to pay for or offset other parts of a budget.
  2. Fix the Highway Trust Fund by raising the federal motor fuel tax. To ensure long-term, sustainable funding for the federal surface transportation program, the current user fee - 18.4 cents per gallon on gasoline and 24.4 cents per gallon on diesel fuel - must be raised by at least 25 cents per gallon and tied to inflation to restore its purchasing power, fill the funding deficit, and ensure reliable funding for the future.
  3. Authorize programs to improve specific categories of deficient infrastructure and support that commitment by fully funding them in an expedient, prioritized manner.
  4. Infrastructure owners and operators must charge, and Americans must be willing to pay, rates and fees that reflect the true cost of using, maintaining, and improving all infrastructure, including water, waste, transportation and energy services.

ASCE president Norma Jean Mattei concluded: "Any federal infrastructure legislation must include investment that provides substantial, long-term benefits to the public and the economy; consider the cost of an infrastructure project over its entire life span; ensure projects are built sustainably and resiliently; and not replace existing federal, state, local, or private infrastructure funding."

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