The home of the Infrastructure need and the land of the auto bailout…

Do we have a bailout for Detroit yet? No? Thursday the deal in the Senate for $15 Billion for “The Big 3” died when the UAW said that they would not give more concessions.  But it is only Sunday night, and the way economic news has been breaking for the past 6 months early Monday mornings we still don’t know if some cash is going to flow to the Detroit big three or not.

Meanwhile the Conference of Mayors this week showed up in Washington asking for about $73 BILLION to fund 11,391 “infrastructure” projects that are reported to be “shovel ready”. Infrastructure, like roads, sewers, water mains; you know, stuff that are “fundamental facilities and systems serving a country, city, or area”.  An excellent commentary in the Wall Street Journal by Robert Poole exposed that the fundamental projects in that list included a $4 million tennis court project, a $15 million sports parks, a $200,000 dog park, $94 Million for a parking garage at the Orange Bowl and $200 million for a “High Speed” train station in San Francisco, where there are no “high speed” trains.

The mayors list has about $17 Billion listed for “Streets – Roads” projects, about $1 billion for Amtrak projects ($750 million for a single Sacramento project), $4 billion for Airports, and about $3.7 billion for schools. Hey, this is “good” stuff, right? But “The devil is in the details” and if you look at the details you see a pile of pork in the list. The Conference of Mayors web site  provides a full list of all of the projects, including the city, a description of the project, then amount being asked for and the number of jobs that the projects is expected to generate. I spent some time there to see what the project lists looked like and saw a few interesting items.  Go take a look, you will be amazed what they are asking for.

Miami would like us to repave all of their roads for $175 million, and for good measure there are some that they are asking to have paved again for about another $175 million. Oh, and how about some nice trees and landscaping thrown in for another $100 million (the “street scaping” mixed in with drainage and storm sewer / street projects ).  I guess that Miami traffic is really tense, since they are asking for over $50 million in “traffic calming” projects. $50 Million will buy a lot of Valium.  And there is $4 million for the new heliport and $8 million for a city wide bicycle facilities.

In total Miami is asking for $1.3 Billion for their road projects, the biggest total roads request.

Moline, IL wants $1,1 billion, with $975 million to replace the I-74 bridge over the Mississippi river. The city of Moline wants to get funding to replace an aging interstate bridge, half of which is in Davenport Iowa, who asked for $5.4 million to cut the curbs for ADA ramps.

Last Wednesday Ron Defeo, the CEO of Terex (maker of big machines that crush rock, lay asphalt, move earth, you know, a company that could see a little growth from infrastructure spending) was on CNBC and got asked about what he thought of the infrastructure stimulus package.  I suggest all logistics professionals listen to what he says in the interview.

Key Points:

• Justify each and every project, just like you would a business capital project. Et the facts on what the costs and the benefits are and make decisions based on the payback.
• Develop a long term Infrastructure Strategy for the next 20 – 50 years. Do small things quick to get things rolling, but build a strategy. “Don’t do curb cuts in all the cities.”
• Build High Speed Rail Corridors dedicated to moving people between cities. Build dedicated truck transit highways between cities. Improve inter-modal capabilities.
• Run the program as a public / private partnership, where the strategy is set by the government and the private sector provides some of the funding, and performs the work.

Ron’s comments are on the mark. Let’s hope that our new President’s team is listening and agrees. If we do not control where the spent and how it is spent, the pork of the past will look mighty lean compared to the Infrastructure Stimulus Bill of 2009.