Wednesday, May 8, 2013

Wanted - A United States Secretary of Infrastructure

Time has come for new and bold thinking on the infrastructure investment front.  But first, let's drop the terms "public infrastructure" and "privatization" and "public-private partnerships."  Let's make it simple - - we need a national plan and strategy to ramp up investment in our "economic infrastructure."  From runways to power lines to subways to navigation locks to freeways to water pump stations to natural gas transmission lines - - economic infrastructure is all the physical stuff behind the GPD numbers.  He are talking about investment in fixed assets.  Both the public and private physical stuff - - energy, telecommunications, transport, waste and water must all be featured.

What we need are less infrastructure report cards and more of a National Infrastructure Plan.  Show me a list of our top 500 projects for both the public and private sectors relating to economic infrastructure.  Show me the investment plan, investors, and the schedule for completion - - show me the benefits (economic, environmental, and social) of why Project XYZ is on the national strategic infrastructure list.  The plan must outline our overarching investment strategy.  Report cards are about the past and a little of the present - - we need a focus on the strategic future. 

A Department of Infrastructure should be created.  Eliminate the Departments of Transportation and Energy and move parts of the E.PA. and Corps of Engineers to the new department.   Consolidation of infrastructure resources and enhancing talent spread thin in halls of Congress is critical - - our national problems require knocking heads together and ensuring execution of strategic plans. Find 250 people for the new department - - not one single person above 250. 

The Department of Infrastructure needs to establish a real sense of urgency to get things done and join them up with local government.  Local government is a key - - see the following graph:

A key goal of the new department would be improving the leadership around economic infrastructure.  Leadership is critical.  In the age of austerity and a long-term desire to reduce the size of the state's take of national income, the new Secretary of Infrastructure needs to focus on pension funds, banks, and other private investors as a funding source of our economic infrastructure investment requirements.  What about this as a national goal  - - two thirds of our requirements should come from non-government sources.

Start thinking systematically.  We need to have greater individual investment for retirement.  Make it mandatory that you have to have a 401(k) account for your retirement.  Social Security is in long-term trouble - - let's fix it and also fund infrastructure investment at the same time.  Have 1% of the 401(k) money go toward funding an investment fund in the Department of Infrastructure.  Set a target return of 5% - - make people accountable and transparent.

Consider what Australia has developed to deal with their infrastructure needs.  Infrastructure Australia is a statutory body, established under the Infrastructure Australia Act 2008 which came into effect on 9 April 2008.

Infrastructure Australia advises governments, investors and infrastructure owners on a wide range of issues. These include:
  • Australia's current and future infrastructure needs
  • mechanisms for financing infrastructure investments, and
  • policy, pricing and regulation and their impacts on investment and on the efficiency of the delivery, operation and use of national infrastructure networks.
Infrastructure Australia's focus is on assisting Australian governments to develop a strategic blueprint for unlocking infrastructure bottlenecks and to modernise the nation's economic infrastructure.

Infrastructure Australia reports regularly to the Council of Australian Governments through the Federal Minister for Infrastructure and Transport.

Our first Secretary of Infrastructure?  My vote would be Riley Bechtel of Bechtel.

1 comment:

  1. Having time to learn is a wonderful time for us business owners. It would be a great thing if we can learn new things that might be helpful for our business. We should accept the fact that in order for us to succeed information is really essential.

    Investments in Australia.


Note: Only a member of this blog may post a comment.