In a bipartisan vote on Friday night, House officials passed President Joe Biden’s landmark legislation to deal with the country’s worsening infrastructure crisis. But as with any crisis management plan, the devil will be in the details of how his plan is executed. Once Biden signs the bill, the hard part begins: making sure the funds are spent the right way, for the right reason, and at the right time.
In a White House televised address on Saturday morning, Biden said the legislation would create union jobs, fix crumbling roads and bridges, expand broadband internet access and help communities resist the effects of climate change. .
He said the benefits will not only have a direct impact on people’s daily lives, but will also help the United States become more competitive globally. “I really believe that 50 years from now people will look back and say that was the time, that was the time this year and the next two years when Americans decided to win the competition of the 21st century, for get into the game, full caliber, âBiden said.
Murray Rowden is the Global Head of Infrastructure at Turner & Townsend, an international construction consulting firm. He said that for private companies, âthe infrastructure bill will present an opportunity to create public-private partnerships that will both amplify the funding of the bill, as well as strengthen infrastructure as a class. stable assets capable of providing the long-term, reliable returns that private investors seek.
“The bill will also give institutions at the local level, like economic development companies and green banks, the capital they need to stimulate private investment in sustainable assets and operations that reduce carbon emissions and we bring closer to the achievement of the objectives of the COP 26. summit â, he declared.
Endangered business advantages
Jason R. Escamilla, CFA, is the Founder and Chief Investment Officer of Impact Advisor. He warned that “when this bill is signed, two important measures favorable to business [will] disappear to pay for new expenses. There are a lot of companies that need this stimulus and don’t even know it.
The measures include the fourth-quarter employee retention credit and the Small Business Administration’s targeted economic disaster loan advance for businesses in low-income areas.
According to Rowden, âThe main challenge for businesses, especially in construction, will be overcoming the shortage of skilled labor to do the job. It will inevitably be difficult to achieve the objectives of the bill without the labor.
âBusinesses will continue to see steady increases in wage costs, with the average construction wage in San Francisco already increasing 15.6% since 2019, and the average construction wage in New York and Chicago increasing by 7%. , 0 to 8.0% since 2019. â
Rowden noted that âthe other major challenge in putting this funding to work will be to rebuild and restore supply chains. The past year was marked by enormous volatility in the cost of raw materials and commodities, which either drastically increased the cost of construction or caused indefinite pauses on many programs. The Biden administration is firmly committed to removing constraints from the supply chain. But, it is likely that they will continue to be a bottleneck for some time to come.
National plan required
He noted that the United States âis the only major Western country without a national infrastructure plan and in desperate need of it. “If the federal government is going to inject trillions of dollars into the economy, it would be a great opportunity to combine this stimulus package with the deployment of a [plan] to help guide the proper use of these funds.
But Rowden said, “To get it right, the United States will need to prioritize ‘shovel worthy’ and not ‘shovel ready’. [projects]. “