Identifying pathways to pay for critical infrastructure projects and stretching those public and private investments as far as possible was a key focus of the first National Infrastructure Finance and Construction Summit held Nov. 20-21 in Reston, Va.
Sponsored by the American Society of Civil Engineers, organizers said the event aimed to convene leaders from federal and state agencies, financial investment firms, engineering and construction companies and advocacy groups–entities that don’t often work closely together, said Maria Lehman, ASCE president emeritus and infrastructure lead at consultant GHD. “We really need to look at how we move forward to get the financial community and the infrastructure community working together,” she said.
An analysis released by the group earlier this year of projected infrastructure investment economic impacts through 2043 stressed that despite the large influx of funds released since 2021 through the federal Bipartisan Infrastructure Law, CHIPS Act and Inflation Reduction Act, the gap between funding needs and monies to address them remains enormous.
The report compares two scenarios—“snapping back” to more traditional funding levels after new infrastructure law investments end in 2026; and “continuing to act.” It concludes that a funding shortfall remains in both scenarios, but it would be smaller if the U.S. Congress continues to prioritize infrastructure investment.
But public infrastrucure owners and their consultants and contractors will need to become increasingly resourceful to access and deploy every dollar allocated, several speakers at the meeting said.
Dan Walker, a senior geologist in the University of Maryland Dept. of Civil and Environmental Engineering, noted that over the past 40 years, the number of natural disasters exceeding $1 billion has increased exponentially. “What it really reflects is what we build, where we build it and how we have more and more exposure,” he said. “More infrastructure is placed in areas that are susceptible to natural disasters, and it’s really driving significant losses that are obviously of concern across the industry.”
While ASCE released in October 2023 its first standard—ASCE 73-23—offering specific guidance to project owners on how to develop and implement sustainable infrastructure, only 32 jurisdictions across the U.S. have adopted it into their building codes, even as it gains traction around the globe, said ASCE Executive Director Tom Smith.
The World Federation of Engineering Organizations, Asian Civil Engineering Coordinating Council and Pan-American Federation of American Societies have all endorsed the standard, he said. ASCE 73-23, which includes chapters on infrastructure resilience and life cycle costs, “is something I think the financing community is going to be very interested in, [as efforts grow] to protect the assets that you are financing.”
Lehman suggested that ASCE’s standard could be incorporated into financial covenants as a condition of project financing. “You have the ability to lessen your risk and avoid a 20-year delay in getting the latest and greatest by going directly to the standards, instead of going to the patchwork that we see across the country and coasts,” she said.
Tax-exempt municipal bonds to finance critical infrastructure projects are also a viable option, but their tax-exempt status is a perpetual target of lawmakers wanting to pay for tax cuts and could be at risk in the upcoming congressional session that starts in January, said Caroline Sevier, ASCE managing director of government relations and infrastructure initiatives.
Terence Smith, CEO of Smith’s Research and Gradings, an investment research and credit rating firm, noted that during the conference, it became clear that the financial sector and engineering community don’t always think the same way, and that there can be miscommunication. “This is the beginning of something,” he said.