FHWA’s Nadeau Calls for Long-Term Plan to Provide States With Highway Funding

This story appears in the Oct. 6 print edition of Transport Topics.

WASHINGTON — Acting Federal Highway Administrator Gregory Nadeau on Sept. 30 urged lawmakers to approve a “long-term, sustainable” transportation-funding measure in order to help advance the efforts by states and municipalities to repair or replace aging infrastructure.

Nadeau said that without a multiyear federal highway law, local officials lack much-needed guidance to prepare and execute efforts to modernize their transportation networks.

“Until we have a predictable, reliable, long-term ability to invest in transportation assets, it’s going to be very difficult to persuade state DOTs, local transportation agencies on the ground — who are reacting to public demand for services and for assets — to think long-term if they are looking at short-term commitments and resources,” Nadeau said.

He was speaking on Capitol Hill at the unveiling of a study that assessed ways of maximizing transportation project investments.

The report, “Maximizing the Value of Investments Using Life Cycle Cost Analysis,” which argues for the implementation of life cycle cost analysis to account for the total costs of infrastructure projects, was published by the nonprofit Eno Center for Transportation and the American Society of Civil Engineers.

ASCE, which last year graded the nation’s infrastructure condition and performance D+, said the report prompts government officials to improve the way they survey the long-term costs of building and maintaining infrastructure projects.

Although spending decisions will remain a crucial part of the transportation process, the life-cycle cost analyses are tools that will help policymakers realize the most value for their programs, Pat Natale, ASCE’s executive director, said at the event.

“Considering the full cost of a project throughout its lifespan is essential if we want to make the best investment with the limited funding available,” Natale said. “These purchasing decisions we make every day have an impact on us.”

To realize the benefits of life cycle cost analysis, the groups recommended that Congress provide the Department of Transportation greater authority to hold project managers accountable to performance standards, launch a competitive grant program that provides funding specifically to aid in asset management, and establish cost-effective standards aimed at helping transportation leaders prioritize projects.

In the report, the groups also call on state and local agencies to engage in public-private partnerships, or P3s, as ways to learn from private-sector counterparts and adopt life cycle cost strategies.

Already, dozens of states have adopted P3 plans to fund big-ticket infrastructure projects such as highways and bridges. While a few states have established P3 offices within their transportation agencies, others manage the private enterprises as part of their overall strategies.

“The United States needs to begin thinking more strategically about how it maintains and operates its transportation network and manage its assets in the future,” according to the report. “With the focus of funding shifting toward system preservation, greater use of life cycle cost analysis can ensure sustainability of future budgets and better management of our vital infrastructure.”

Nadeau also touted the Obama administration’s four-year, $302 billion transportation blueprint called the Grow America Act. That legislative proposal, which is not expected to advance through Congress this year, would overhaul corporate tax structures to generate about $150 billion in revenue for the federal Highway Trust Fund.

For the past several years, Congress has approved a series of short-term extensions for transportation funding. This summer, President Obama signed a bill that extended a 2012 transportation law’s two-year authorization to May 2015.

The trust fund is used to help states pay for infrastructure projects, but its reliance on a national tax on gas and diesel fuel fails to generate the necessary revenue to meet its financial obligations to states.