Industry News Briefs

May 14, 2009 Headlines

Obama Budget To Fund $1.83 Billion For Light Rail Projects
Experts Urge Increased Water Infrastructure Spending
Gov. Schwarzenegger Endorses Public-Private Partnerships for Infrastructure



Industry News

Obama Budget To Fund $1.83 Billion For Light Rail Projects
U.S. Department of Transportation (05/08/09)

President Obama's proposed budget for fiscal 2010 includes $1.83 billion in funding for major transit projects across the United States. More than $600 million of those funds are being recommended for new projects. "By reinvesting in our nation’s transit infrastructure, we are making our communities more livable, invigorating the local economy, and putting America back to work," says U.S. Transportation Secretary Ray LaHood.
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Experts Urge Increased Water Infrastructure Spending
Reuters (05/08/09) Christie, Jim

Crumbling infrastructure in plain sight like roads and bridges can easily get attention, but hidden water infrastructure is paid much less heed despite the necessity of water for drinking and basic sanitation. Even in the recent economic stimulus package, less $10 billion of the $787 billion price tag went toward drinking and wastewater projects, and state and local officials at a recent Reuters Infrastructure Summit say they need much more to repair and add capacity to their systems. "In Maryland and other eastern states there have been repeated episodes in which pipes carrying clean water or sewage have collapsed," says Maryland State Treasurer Nancy Kopp. "Over the next 20 or 30 years, water systems are likely to hit obsolescence." Policymakers are also concerned in Western states that depended on vast water projects decades ago for their growth; for example, less than $1 billion is going toward water projects in California, which has depended on enormous past engineering efforts to bring water to coastal cities from mountains and rivers. Peter Gleick, of the Pacific Institute of Oakland, California, said at the Infrastructure Summit that California should focus on more efficient use of its water, rather than building more huge water works as it did in the past. "About 30 percent of the water used in urban California could be saved with existing technology," he said, adding that paying households to adopt such technology, such as low-flow toilets, would help avoid the environmental and financial costs of new dams or other water projects. However, Scott Paul of the Alliance for American Manufacturing said that the stimulus package made a mistake in giving so little money to water projects if the intent of the legislation was to catalyze job growth. "Water systems have the biggest bang for the buck," says Paul, whose group commissioned a recent study showing that water projects create more jobs per dollar spent than other infrastructure categories, with every $1 billion creating 19,769 jobs.
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Gov. Schwarzenegger Endorses Public-Private Partnerships for Infrastructure
Los Angeles Business Journal (05/04/09) Ramey, Kurt

California Gov. Arnold Schwarzenegger has endorsed public-private partnerships as an alternative funding method for the state's infrastructure needs in addition to stimulus money and other federal funds, writes Kurt Ramey, a partner in KPMG's Los Angeles infrastructure advisory practice. The American Society of Civil Engineers says that 66 percent of major roads in California are in middling-to-poor condition, and 68 percent of urban interstates there are congested. Meanwhile, business leaders have affirmed that sound infrastructure is a vital contributor to the economic success of any region, and California has begun looking at how the private sector can participate. California's state budget negotiations in February produced legislation under which local, regional, and state governments can pursue public-private partnerships in specific areas, and local governments and transportation authorities have begun examining how to do so while protecting public needs. Long used in some other countries, public-private partnerships have started catching on in states such as Texas, Virginia, Florida, Illinois, and Nevada. The draw of a public-private partnership is that the private entity can take on the risks of financing, construction cost, project timing, and operation and maintenance costs, but it is important to draw up the contracts and legal requirements to protect the public interest. With the Los Angeles region now having this new tool for financing infrastructure, Ramey concludes, it is important to adopt a structured approach so that decisions made now will have a beneficial effect on living standards and business competitiveness of generations to come.
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HUD Allocates $1 Billion in Recovery Act Funding to Support State and Local Community Development
U.S. Department of Housing and Urban Development (05/05/09)

The U.S. Department of Housing and Urban Development (HUD) has allocated $1 billion in funding to nearly 1,200 state and local governments through the American Recovery and Reinvestment Act of 2009 through HUD's Community Development Block Grant (CDBG) Program. "Today, we make another investment in the economic recovery of our cities, counties and states," says HUD Secretary Shaun Donovan. "President Obama and I are anxious to put this money to work for long-term, sustainable community development."
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Secretary Chu Announces Nearly $800 Million From Recovery Act to Accelerate Biofuels Research and Commercialization
U.S. Department of Energy (05/05/09)

The U.S. Department of Energy has announced that $786.5 million from the American Recovery and Reinvestment Act will be used to accelerate advanced biofuels research and development and to provide additional funding for commercial-scale biorefinery demonstration projects. "Developing the next generation of biofuels is key to our effort to end our dependence on foreign oil and address the climate crisis," says Energy Secretary Steven Chu. "With American investment and ingenuity—and resources grown right here at home—we can lead the way toward a new green energy economy." The funding will be allocated across four main areas: $480 million solicitation for integrated pilot- and demonstration-scale biorefineries; $176.5 million for commercial-scale biorefinery projects; $110 million for fundamental research in key program areas; and $20 million for ethanol research.
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$111.9 Million in Grants for Contaminated Land Cleanup, Economic Development
U.S. Environmental Protection Agency (05/08/09)

The U.S. Environmental Protection Agency has announced the availability of an estimated $111.9 million in grants to help communities clean up Brownfields that may be contaminated by hazardous chemicals or pollutants. The grants include $37.3 million from the American Recovery and Reinvestment Act (ARRA) of 2009 and $74.6 million from the EPA Brownfields general program. "Cleaning and reusing contaminated properties provides the catalyst to improving the lives of residents living in or near Brownfields communities," says EPA Administrator Lisa Jackson. "A revitalized Brownfields site reduces threats to human health and the environment, creates green jobs, promotes community involvement, and attracts investment in local neighborhoods."
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As Inspections Dwindled, Water Main Breaks Rose
Washington Post (05/07/09) Shaver, Katherine

The Washington Suburban Sanitary Commission (WSSC), which serves Montgomery and Prince George's counties in the Maryland suburbs of Washington, D.C., has experienced a record number of water main breaks in the past 10 years but has cut back heavily on water main inspections at the same time, its records show. WSSC officials say that the biggest concrete pipes should be inspected every five years, but some have only had one or two inspections in the past 30 years; one 66-inch pipe that burst during the last winter and forced helicopter rescues of people caught in the flood had not been inspected for a decade prior. Although commission officials point to funding shortages earlier in the decade as the cause of the inspection cutbacks, stepped-up funding since then has not led to the WSSC keeping up with its replacement plans. The agency had $130.6 million set aside to replace 108 miles of pipe in the past four fiscal years, but only 81 miles were done, and one year saw only 16.6 miles replaced out of 27 miles planned. Insufficient attention to underground water pipes has become a problem across the country, and the U.S. Environmental Protection Agency estimates that 240,000 water mains break every year in the United States. The county councils in the two counties covered by the WSSC are set to approve a new budget that would allow a 9 percent rate hike, which would slightly increase the replacement and inspection budget. Current and former officials with the WSSC say the agency did not anticipate how long the new pipe installations would take and that it had funding problems in years without rate increases, and they contend that the politically appointed oversight board often has disputes about contracts and personnel issues. Meanwhile, water main breaks can cause more problems now than when much of the system was designed, as expanding suburbs mean that water mains that once ran through countryside are now close to major roads and neighborhoods.
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Tallying the Toll of Transportation Privatization
MSNBC (05/06/09) Lovitt, Rob

Different attempts at transportation privatization can have wildly different outcomes, as illustrated by the successful example of Missouri's new Branson Airport—the first privately developed and operated commercial airport in the country—and the unsuccessful attempt to lease Chicago's Midway Airport, once seen as a model for privatization but now scuttled by the credit crunch. The 99-year, $2.5 billion Midway lease would have been the first U.S. privatization of a public airport, part of a Federal Aviation Administration (FAA) pilot program announced in 1996. "It was going to be the grand demonstration of the viability of privatization," says DePaul University Prof. Joseph Schwieterman, a supporter of public-private partnerships (P3). "But the consortium overbid, got cold feet and the thing unraveled." Now, P3 backers say that future deals will probably involve smaller and lower-profile projects, and they will likely not be based around up-front payments like the Midway lease plan was. "You have to give the public some value for their dollars," says Steve Steckler, chairman of Infrastructure Management Group, a P3 advisory firm, "and not just take it from future users." Meanwhile, as Branson begins receiving its first commercial flights, Schwieterman acknowledges that "Branson is unique" but says that "the model is one that will surely be tried in other places." Most travelers, meanwhile, will get their most direct experience with privatization via road tolls, an increasingly popular method of transportation funding that nonetheless has its critics who worry about governments losing control of public assets for what may turn out to be bad deals economically. One potential model going forward may be the deal to install tolled reversible lanes to Interstate 595 near Fort Lauderdale, under which the concessionaire will cover the cost but the state will collect and keep the tolls. "We don't start paying them back until construction is completed," says Barbara Kelleher, district public information director for the Florida Department of Transportation. "And motorists get congestion relief in five years instead of 20."
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Rough Roads Costing Motorists Hundreds More Per Year
American Association of State Highway and Transportation Officials (05/08/09)

A new report from the American Association of State Highway and Transportation Officials (AASHTO) and TRIP says that rough roads are costing the average U.S. driver about $400 extra a year in vehicle operating costs, and that rises to more than $750 extra a year for people in urban areas with populations over 250,000. "The American people are paying for rough roads multiple times," says Kirk T. Steudle, director of the Michigan Department of Transportation. "Rough roads lead to diminished safety, higher vehicle operating costs, and more expensive road repairs. It costs $1 to keep a road in good shape for every $7 you would have to spend on reconstruction. It's another drag on the economy." The report also found that 30 to 60 percent of roads are in poor condition in 20 of the largest U.S. urban areas, with 36 percent of Detroit-area roads in poor condition and 64 percent of Los Angeles-area roads are in poor condition. In rural areas, 61 percent of roads are in good condition, and 72 percent of the Interstate Highway System is in good condition but ride quality is being adversely affected by age, weather, and rising traffic. The report, titled "Rough Roads Ahead: Fix Them Now or Pay for It Later," can be found at roughroads.transportation.org.
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Deserted Building Sites Add to Property Bust's Toll
Wall Street Journal (05/07/09) Carlton, Jim

Nationwide, local authorities are facing an increase in the number of complaints about environmental and safety hazards from construction sites where work has been frozen. In the Phoenix metro area, local officials are reporting a surge in calls about increased dust and tumbleweeds from abandoned construction sites cleared of native foliage. In San Diego, meanwhile, a block of sidewalks was torn up for several months where construction of a 14-story residential tower was halted in last year's first quarter. In Florida, there are so many abandoned work sites that some local entrepreneurs have banded together to launch a Web site, UnfinishedConstruction.com, to keep up with them all. The site, which also acts as a brokerage for people seeking to buy or sell unfinished projects, currently lists about 100 such properties statewide -- most of them commercial. John Rebimbas, a partner in the Web site, states, "The complaint we hear the most about from these is the safety factor. Sites are left unsecured, and that means kids can play on balconies with no railing." Real Capital Analytics Inc. estimates that there were 3,929 distressed commercial properties nationwide as of the end of the first quarter -- a 55 percent increase since the end of last year. Roughly 25 percent of these properties involve unfinished developments.

Energy Execs Back Policy That Includes US Offshore Drilling
Dow Jones Newswires (05/05/09) Womack, Jason

Larry Nichols, chairman and chief executive of Devon Energy Corp. said that offshore drilling projects don't depend on current energy prices and can be developed economically and in an environmentally friendly fashion. "Whether prices are high or low, these are long-term investments," Nichols said on the sidelines of the Offshore Technology Conference in Houston. Nichols and other energy company executives told attendees that greater access to offshore drilling should be a key part of a U.S. energy policy that includes renewable energy sources such as wind power and biofuels. The panelists noted they have continued to face opposition from some policy makers, who see energy policy as a choice between either fossil fuels or renewables. Gary Luquette, president of Chevron North American Exploration and Production Co., said he supports renewables but oil and gas will still play a "very important role" in meeting the nation's energy needs.

Obama Proposes Cutting $1.5 Billion in Construction
ENR (05/07/09) Ichniowski, Tom

President Obama's budget request for the next fiscal year includes the proposed termination or cutting back of 121 federal programs to save about $16.7 billion in 2010, $1.5 billion of which is estimated to be in construction projects, including for the Environmental Protection Agency (EPA), the Army Corps of Engineers, and the departments of Energy and Transportation. The proposal also includes a reduction in the subsidy for the terrorism risk insurance program. The biggest construction-related cut proposed is the Department of Health and Human Services' aid for public- and private-sector healthcare facilities and construction; this was worth $310 million for 2009. The plan would also eliminate $161 million in earmarked "surface transportation priorities" at the Transportation Department and $145 million in water infrastructure earmarks at the EPA. Some of the programs on the list "may have made sense in the past--but are no longer needed in the present. Other programs never made any sense; the end result of a special interest's successful lobbying campaign," says Obama. "Still other programs perform functions that can be conducted more efficiently, or are already carried out more effectively elsewhere in the government."

From Sandcastles to Solid Rock
ScienceNetwork Western Australia (05/06/09) Calvo, Shasta

Researchers at Murdoch University in Australia have produced a new treatment for solidifying sand, anywhere from slight solidification to making it as hard as marble, which could be used for applications ranging from making spray-on desert roads to turning beach sand sculptures into solid rock. "Hopefully it will be civil engineering technology," says Ralf Cord-Ruwisch, who headed up the research at the university. The spray treatment involves a blend of calcium solution, bacteria, and some other inexpensive compounds, and it works by forcing the bacteria to form carbonate precipitates with the calcium, thus creating calcium carbonate. Other ideas for practical applications include solidifying the sea bed for oil drilling, sculpting sand into livable homes, or making tunnels under the sand for mining or other purposes. "Countries like Holland also have shown interest in solidifying their dikes," says Cord-Ruwisch. "While dikes made from sand are long lasting, there are certain risks if water intrudes into the dike sand and lubricates the sand particles so they start shifting against each other. Then you can have some instability of the dikes."
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Bendable Concrete Heals Itself—Just Add Water
National Geographic News (05/05/09) Minard, Anne

A newly developed concrete composite is flexible enough to bend without breaking, forming hairline cracks when under stress that will later reseal themselves automatically in the rain. A few days of light rain is enough for the dry material in the concrete to react with the water and carbon dioxide to form calcium carbonate seals, said Victor Li of the University of Michigan in Ann Arbor, co-author of a report on the research. The authors say that the materials is just as strong after it heals itself as it was before. The material has been used so far in a bridge over Interstate 94 in Michigan, which allowed for the elimination of traditional expansion joints, as well as in a 60-story residential building in Japan. "One of the big attractions, apart from reducing maintenance requirements, is the fact that [the new concrete] is very quiet" without expansion joints, Li said. The researchers' report has been published online in the journal Cement and Concrete Research.
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