/What Can Be Done About the Cost of US Infrastructure?
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What Can Be Done About the Cost of US Infrastructure?

America’s highways are potholed, its ports overloaded and many of its bridges decrepit. Some 43% of public roadways are in poor or mediocre condition, according to the American Society of Civil Engineers, which gave the nation’s overall infrastructure a C- rating in its latest report card.

All of that makes it tough going for just-in-time shipping and supply-chain management, both of which are still suffering from pandemic-related bottlenecks.

In November, President Biden signed into law a roughly $1 trillion infrastructure package, which includes federal spending on roads, bridges, ports and other items.

Yet some experts are skeptical about its impact. When the U.S. upgrades infrastructure, it often spends much more than other nations for similar projects yet ends up with disappointing results.

Shannon Peloquin, a leader of McKinsey’s Capital Projects & Infrastructure practice, had a few things in mind when asked what the top reasons for infrastructure’s soaring costs are.

“Infrastructure projects in the U.S. go through a complex, handoff-oriented series of steps. The process typically starts with a project owner who defines the project and makes high-level estimates of cost and needs. The project then winds its way through environmental review and community engagement, and eventually is delivered by a complicated private-sector consortium. This leads to siloed, slow decision making, as each entity solves for its own interests and particular stage of the project, with limited accountability for delivering the infrastructure’s intended benefits on schedule.

Moreover, the construction industry continues to lag in productivity gains; digital tools are absent that could be applied across the value chain to improve transparency, reduce waste and eliminate wait times; and planners and delivery teams aren’t being encouraged to collaborate more closely. Doing so could result in early risk-identification and problem-solving, instead of sweeping problems under the rug until they become too big to ignore. One big requirement to make this happen: a cross-functional, multistakeholder team to establish and maintain trust and focus over the life of the project.”

Read more at the Wall Street Journal.