Category Archives: Infrastructure

Puerto Rico governor presents zero debt payment budget under cloud of uncertainty

Source: Robert Slavin, Bond Buyer, May 23, 2018 (Subscription required)
 
Puerto Rico Oversight Board director Natalie Jaresko said Gov. Ricardo Rosselló’s budget will have to be revised and may be rejected if the local government doesn’t follow through on a labor reform agreement. The governor released the $8.73 billion general fund budget on Friday and promoted it in a speech to Puerto Rico’s legislature Tuesday night. On Sunday night the governor and the board announced an agreement on a compromise on reforming labor practices as well as agreeing to other changes in the board-certified fiscal plan. In exchange for the board waiving its demands for the abolition of the Christmas bonus and reduction of the island’s mandatory 27 days of vacation and sick leave, the governor agreed to bring at-will employment to the island by repealing Law 80 from 1976. Jaresko, in a teleconference with reporters Wednesday, described this agreement as an “accommodation.” …

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Puerto Rico Oversight Board, Gov. Rosselló reach partial compromise
Source: Robert Slavin, Bond Buyer, May 21, 2018 (Subscription required)
 
The Puerto Rico Oversight Board and Gov. Ricardo Rosselló reached a partial compromise in their policy struggle over the fiscal plan for the debt-laden territory. The board said the proposed revisions are “a result of the commitment by the governor and legislature to approve labor reform before the end of this fiscal year, thus considerably reducing implementation risks of the fiscal plan and avoiding costly litigation.” Gov. Rosselló said the new fiscal plan “is not perfect, but it offers concrete results in benefits for our people, and allows us to enter the next phase with more certainty and less conflict. I am convinced that this is the way forward.” …

Puerto Rico’s rocky recovery is distracting from its pre-existing struggles, residents say
Source: E.A. Crunden, ThinkProgress, May 21, 2018
 
When Hurricane Maria slammed into Puerto Rico last September, the island was already struggling. Cash-strapped and massively in debt, the U.S. territory has faced budget deficits for years. Before the hurricane, Puerto Rico already owed $74 billion in debt, with more than $53 billion outstanding in unfunded pensions. Fifty percent of Puerto Ricans live below the poverty line and the island never recovered from the Great Recession the way the mainland did; more than 20 percent of Puerto Rican jobs have dried up since 2007. Mainland sympathy was always hard to come by. In 2006, Congress did away with tax breaks that helped Puerto Rico, while continuing legislation like the Jones Act. That World War I-era law mandates that only U.S. ships may transport U.S. goods domestically between ports, hurting islands like Puerto Rico in the process. According to a 2012 report, between 1990 and 2010, the Jones Act alone cost Puerto Rico $17 billion. Amid a struggling economy and little relief, more than 10 percent of the island’s population had left over the course of the last decade before Maria even made landfall. …

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Opinion: Rebuilding Schools, Bridges—and Lives

Source: Richard Trumka and Boston Mayor Marty Walsh, Wall Street Journal, May 14, 2018

As unions, businesses, engineers and policy makers celebrate Infrastructure Week from May 14-21, we’re reflecting on the investments that add value to America. For every dollar a country spends on public infrastructure, it gets back nearly $3, according to a 2014 study from the International Monetary Fund. Keep this in mind when you hear that the American Society of Civil Engineers, or ASCE, has called for $2 trillion to repair, renovate or replace water lines, public schools, bridges and mass transit systems. On top of that, another $2 trillion could make America the global leader in the infrastructure technologies of the future, such as high-speed rail and smart utilities. … When you see that the ASCE’s infrastructure report card gives the nation overall a D+, don’t hang your head. The U.S. can get that grade up. But it won’t happen with a plan like President Trump’s , which would cut Washington’s contribution to infrastructure projects from 80% to 20%, quadrupling the burden on cash-strapped cities and states. The true way forward is to do the opposite: Put the federal government back in the business of building America’s future. …

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States That Raise Tolls and Taxes Will Have an Edge in Getting DOT Funds 
Source: Ted Mann, Wall Street Journal, April 27, 2018

States and cities that raise taxes and tolls will have a better chance at winning federal money for roads and bridges, part of a Trump administration strategy to have states carry a bigger portion of infrastructure spending. The move is a result of a Transportation Department overhaul to a popular infrastructure grant program, giving it a new name and tweaking the criteria that will determine which project applications will win federal funding. Under the overhaul, which was launched last week, applicants for grants this year will be judged in part on whether they can show that they have generated “new, non-Federal revenue” to help cover project costs, according to a DOT document. That will mean local agencies that raise taxes or tolls to pay for bridges, transit lines or road improvements will be more likely to win some of the $1.5 billion pool of funding authorized for the program this year. …

Trump infrastructure policy adviser to leave White House
Source: Mallory Shelbourne, The Hill, April 3, 2018
 
DJ Gribbin, President Trump’s infrastructure policy adviser, is departing the White House as the administration’s rebuilding plan appears to have hit a wall in Congress. Gribbin, who led the Trump administration’s push for an infrastructure proposal that was released in February, is “moving on to new opportunities,” according to a White House official. …

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Putting the Public First in Public-Private Partnerships

Source: Gabrielle Gurley, The American Prospect, April 26, 2018
 
… More than a decade later, the Port of Miami Tunnel is the marquee example of a public-private transportation infrastructure partnership. … But the tunnel’s success is deceptive, since the unique factors that converged in South Florida cannot be replicated everywhere. For every Port of Miami Tunnel, scores of ill-conceived projects dot the American landscape. The United States lags behind not only in basic maintenance of existing assets at the end of their life cycles but in building the next generation of roads, bridges, rail, tunnels, and aviation projects. With public funds scarce in a climate of tax-cutting and budgetary austerity, the risk is that the contactor/partner pays the up-front costs but sticks future generations of taxpayers and rate-payers with exorbitant charges. … But states and municipalities can learn to appreciate the differences between partnerships that put the public first and the rip-offs that erode public confidence in government and drain public coffers.

… The Trump administration’s version of an infrastructure initiative relies heavily on private financing, which may or may not materialize. … But the Trump framework is only an exaggeration of recent trends. At best, new fiscal pressures can lead public officials to get creative, seeking private partners who may bring superior engineering, financing, and legal expertise, and better attention to maintenance and operations. But private-sector involvement does not automatically mean a better outcome. Citizens and public officials often forget that the private sector’s prime motive is profit, not philanthropy. If a firm cannot clear a good return on an investment, either the deal will not materialize or the terms will be onerous to the public. Public debates can be marred by false expectations, and confusion or obfuscation of what distinguishes a good partnership from a rip-off. …

Inviting Private Sector to Build Roads Raises Wage Questions

Source: Chris Opfer and Jasmine Ye Han, Daily Labor Report, April 13, 2018 (Subscription Required)
 
The Trump administration wants the private sector to take the wheel on many U.S. road and other upgrades, raising questions about whether construction workers will still get the compensation required under federal contracts. The Davis-Bacon Act obligates contractors to pay workers on federally funded construction projects a local prevailing wage and certain benefits set by the Labor Department. The law is meant to ensure that the government doesn’t shortchange workers. But some Republican lawmakers, businesses, and conservative advocacy groups say “prevailing wages” exceed market rates and bloat taxpayer-funded construction projects as a handout to labor unions. Although the law isn’t likely to be scrapped anytime soon, lobbyists have stayed busy pushing to get Davis-Bacon provisions explicitly included in new spending legislation. That activity ticked up following a post-recession infrastructure spending binge and kept the questions coming about which projects require prevailing wages. …

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Trump’s Davis-Bacon Quote Turns Construction Industry Heads
Source: Elliot T Dube, Bloomberg BNA, April 14, 2017
 
Construction industry stakeholders got a jolt when President Donald Trump recently approached what a U.S. Chamber of Commerce official called a “third rail issue” for building trades unions: changes to the Davis-Bacon Act. Trump said in a New York Times interview published April 5 that he was “going to make an announcement in two weeks” regarding Davis-Bacon. The law requires contractors on federally funded construction projects to pay prevailing wages for a given area. …

Trump’s promised announcement on labor law unnerves unions
Source: Lindsay Wise, McClatchy, April 10, 2017
 
President Donald Trump shocked organized labor by saying he would soon have an announcement to make about a law that guarantees wage levels for workers on most federally funded construction projects. And since then, the White House has declined to reveal his position publicly.  But behind closed doors, the Trump team appears to be scrambling in recent days to calm nerves among the very unions whose workers helped power the president’s Election Day victory. After a meeting with White House staff on Monday, Sean McGarvey, president of North America’s Building Trades Unions, said he was confident the president was misquoted or misspoke when he told The New York Times he would make an announcement about the 1931 Davis-Bacon Act. … Signed by President Herbert Hoover during the Great Depression, the Davis-Bacon Act requires contractors hired by the federal government for public works and building projects to pay certain classes of laborers and mechanics at prevailing wage rates. The Department of Labor calculates the rates by county, based on data it collects on similar projects in the area. Conservatives in Trump’s own Republican Party would be delighted if the president announced plans to repeal or replace the law. They say it artificially drives up costs for taxpayers and gives a competitive advantage to unions. Unions are anxious to protect Davis-Bacon, and ensure its wage protections are enshrined in Trump’s promised trillion-dollar infrastructure plan. Any move by the president that threatens the law could jeopardize their support for a Trump infrastructure bill, and thwart its prospects for winning votes from congressional Democrats, the unions’ traditional allies. …

Trump Says He May Use His $1 Trillion Infrastructure Plan as a Political Incentive
Source: Reuters, April 5, 2017

U.S. President Donald Trump said on Wednesday he was considering packaging a $1 trillion infrastructure plan with either health care or tax reform legislation as an incentive to get support from lawmakers, especially Democrats. Trump also said in an interview with the New York Times he may move up the unveiling of a plan to rebuild the country’s deteriorating roads, bridges and tunnels, which had been expected later this year. … Some of the infrastructure projects may be built through public-private partnerships, Trump said, declining to say how the total spending would split between public and private sources. But he also said that with interest rates low, the government may be better off financing the projects itself. … Trump said he would make an announcement in two weeks about whether he would seek changes to a wage law for federal projects blamed by conservative groups for inflating costs, though he declined to say what the announcement would be. Conservative groups have pressured the White House on the law, known as the Davis-Bacon Act, which requires contractors on federal projects to pay local prevailing wages – a measure backed by labor unions and Democrats. …

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New Jersey bill seeks P3 expansion

Source: Andrew Coen, Bond Buyer, April 13, 2018 (Subscription Required)
 
New Jersey lawmakers are pushing again for an increase in the use of public-private partnerships to jump-start infrastructure improvements in the cash-strapped state. Two and a half years after former Gov. Chris Christie conditionally vetoed an expansion of New Jersey’s P3 program, a state senate committee advanced legislation on April 5 that if enacted would permit localities to enter into P3 agreements for building and highway infrastructure projects. The measure would make local governments, school districts, public authorities and state colleges eligible to enter into P3s where the private entity would assume full or partial financial and administrative responsibility for capital projects. …

Cracks in Sidewalk Labs’ Toronto waterfront plan after fanfare

Source: Jeff Gray, The Globe and Mail, February 23, 2018

… Sidewalk Labs, the unit of Google parent Alphabet Inc. selected to help transform a parcel of land known as Quayside, at the foot of Parliament Street, listed off a dizzying array of technologies it could develop in Canada’s largest city, then sell elsewhere: cameras and sensors that detect pedestrians at traffic lights or alert cleanup crews when garbage bins overflow; robotic vehicles that whisk away garbage in underground tunnels; heated bike lanes to melt snow; even a new street layout to accommodate a fleet of self-driving cars. Four months have passed since Waterfront Toronto, the municipal-provincial-federal development agency, named Sidewalk its “innovation and funding partner” for the project – time enough for some of the gee-whiz talk of hyper-energy-efficient modular buildings and “taxibots” to be replaced by a rising chorus of critics both inside and outside City Hall. Many are concerned about the data Sidewalk could collect. Some say the deal has been shrouded in secrecy. Others fear the company’s vague but sweeping plans could threaten the city’s authority over a massive swath of waterfront or even its public transit system and other key services. … Meanwhile, despite briefings from Waterfront Toronto and Sidewalk executives, some city councillors say they still have little idea what Sidewalk actually intends to do – or where. …

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Beware Of Google’s Intentions
Source: Susan Crawford, Wired, February 1, 2018

In partnering with local governments to create infrastructure, Alphabet says it is only trying to help. Local governments shouldn’t believe it. ….. Beginning last fall, Toronto has been getting a flood of publicity about a deal with Sidewalk Labs, part of Google spinoff Alphabet. Reports describe the deal as giving Sidewalk the authority to build in an undeveloped 12-acre portion of the city called Quayside. The idea is that Sidewalk will collect data about everything from water use to air quality to the perambulations of Quayside’s future populace and use that data to run energy, transport, and all other systems. Swarms of sensors inside and outside buildings and on streets will be constantly on duty, monitoring and modulating.

But Toronto recently revealed that deal has put it in a tough place. A nonprofit development corporation, not the city, made the arrangement with Google that sparked all the publicity—the city itself doesn’t appear to have known a deal with Google was in the works. Now the situation appears messy: The details of the arrangement are not public, the planning process is being paid for by Google, and Google won’t continue funding that process unless government authorities promise they’ll reach a final agreement that aligns with Google’s interests. Those interests include Google’s desire to expand its Toronto experiments beyond that 12-acre Quayside plot.….

Trump’s Infrastructure Plan Could Destroy Our Nation’s Water Systems

Source: Michelle Chen, The Nation, January 30, 2018
 
The draft outline of the zombie infrastructure program has resurfaced again with a leak to Axios—and confirms what many feared: The White House hopes to privatize areas of government at a discount, opening up more public services to abuse at the hands of corporations. Trump plans to expand private-activity bonds for infrastructure construction, “to benefit the public,” with a definition of “public benefit” that’s more solid-gold toilet than Hoover Dam. Exhibit A is the plan to expand private management of our waterways, including efforts to mitigate pollution and environmental harm that tends to result from the same private-sector control. In other words, laundering public money to help corporate America break stuff and then buy it. There’s a heavy focus on funding privately managed road and bridge projects, and goodies like highway-rest-stop commercialization and encouraging private leasing of infrastructure. …

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Cashing in on Water Crises: Public-Private Partnerships Are Not the Solution
Source: Julia Kassem, Truthout, January 13, 2018

Across the US, cost-cutting municipalities are looking to private companies and contractors to fix aging infrastructure. However, these privatization practices contribute to increased water bills and jeopardize water quality, endangering one of residents’ most basic needs. We can gain some perspective on the consequences of water privatization by looking to a glaring overseas example: In Lebanon, mismanagement of infrastructure has provided ample opportunity for privatization to proliferate. … The International Finance Corporation (IFC), the privatizing wing of the World Bank Group, continues to invest in water privatization companies such as Veolia, and more recently, SUEZ. The companies are setting their sights on ailing infrastructural systems in the Global South in places like the Arab world, particularly in response to the abandonment of public-private contracts in some large US cities. … In Lebanon and around the world, the basic issues of water quality and safety must find a place in policy-oriented discussions over water. If this occurs, countries and municipalities stand a chance of eschewing private-public partnerships — and ensuring that water is not treated as simply another commodity to be sold.

$300 Billion War Beneath the Street: Fighting to Replace America’s Water Pipes
Source: Hiroko Tabuchi, New York Times, November 10, 2017
 
America is facing a crisis over its crumbling water infrastructure, and fixing it will be a monumental and expensive task.  Two powerful industries, plastic and iron, are locked in a lobbying war over the estimated $300 billion that local governments will spend on water and sewer pipes over the next decade. … To more directly reach towns and counties across the country, the plastics industry is also leaning on the American City County Exchange, a new group that gives corporations extraordinary capacity to influence public policy at the city and county levels. The group operates under the auspices of the American Legislative Exchange Council, a wider effort funded by the petrochemicals billionaires Charles G. and David H. Koch that has drawn scrutiny for helping corporations and local politicians write legislation behind closed doors. …

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St. Louis aldermen call for transparency as city considers privatization of Lambert

Source: Celeste Bott, St. Louis Post-Dispatch, January 19, 2018

A committee tasked with picking a team of consultants to advise the city on whether to privatize St. Louis Lambert International Airport has met several times but has yet to choose advisers to lead the process. There were 11 submissions for consulting services, Deputy Mayor for Development Linda Martinez told the Post-Dispatch. Only three covered all services sought in the city’s request for proposals, she said, and the others only covered part of the services. The identity of the winning bidder won’t be revealed until a contract is agreed upon. … No vote was taken when the committee met Wednesday. Instead, much of the session was devoted to providing information to several city aldermen, amid growing concern from members of the board that the process, which was greenlighted by the Federal Aviation Administration in April, hasn’t been transparent. … Critics have questioned the need for privatizing Lambert, citing its recent growth, including a 10 percent spike in passengers in 2016, and a strong credit rating. … The effort to explore the benefits and risks of privatization has been a slow one. …

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Lambert director has mixed feelings on privatization, pushes Congress on higher fees
Source: Adam Aton, St. Louis Post-Dispatch, March 23, 2017

The director of St. Louis Lambert International Airport said Thursday she’s keeping an open mind about a proposal to privatize its management. Rhonda Hamm-Niebruegge also said she has reservations about the shift’s potential to steer more money from the airport to the city. Mayor Francis Slay traveled to Washington this week to ask for St. Louis’ inclusion in a Federal Aviation Administration pilot program to study leasing airport operations to a private business. St. Louis County Executive Steve Stenger and Lyda Krewson, the Democratic nominee for mayor, have said the idea deserves examination, and political mega-donor Rex Sinquefield has made a six-figure commitment to help pay for the application. The FAA could decide this month whether to include Lambert in the program, starting a decision-making process that could take at least a year. If the change were made, the city still would own the airport and land while a private company leases it. … The city draws about $6 million annually from the airport, and a public-private partnership could bring an “immediate” infusion of more funds, according to the city. … Congress is considering how infrastructure projects might fit into the FAA’s reauthorization legislation. …

Federal Fraud Recoveries Decline in Fiscal Year 2017

Source: Project on Government Oversight, January 2, 2018

… The DOJ announced it had recouped $3.7 billion through settlements and judgments in False Claims Act cases in fiscal year 2017. This amount is nearly 23 percent lower than the previous fiscal year, but roughly in line with FY 2015’s total. This seems to be a trend: a historical analysis of DOJ’s fraud recoveries since 1986 (the year Congress substantially strengthened the False Claims Act) shows that, in recent years, a substantial drop-off occurs in non-election years. … As in past years, the largest share of the recoveries—about two-thirds—involved health care fraud. But a substantial sum also came from some of Uncle Sam’s largest contractors:

  • AECOM and Bechtel: $125 million to settle False Claims Act allegations that the contractors charged the government for deficient materials and services at the Hanford Nuclear Site. Separately, AECOM paid over $5.2 million to settle another fraud investigation involving its work at Hanford.
  • Agility: $95 million to settle a 12-year-old case accusing the company of overcharging the government for food supplied to U.S. troops in the Middle East.
  • Atlantic Diving Supply: $16 million for allegedly inducing the government to award small business contracts to companies misrepresenting their eligibility as socially or economically disadvantaged small businesses.
  • Huntington Ingalls Industries: $9.2 million to resolve claims of overbilling the government for work at its Mississippi shipyards.
  • Pacific Architects and Engineers: $5 million to settle allegations that it failed to properly screen and oversee personnel working on a contract to train Afghan security forces.
  • Sierra Nevada Corporation: $14.9 million for allegedly causing the government to pay inflated labor costs on contracts.
  • Defense contractors accounted for $220 million in fraud settlements and judgments.

The Privatization Agenda Goes Bust

Source: Tom O’Leary, Jacobin, January 18, 2018

The collapse of Carillion, the mammoth UK government contractor that went bankrupt Monday, was wholly made in Britain, although it has negative consequences internationally. The reason for Carillion’s bankruptcy, which puts vital public services and thousands of jobs at risk, is that the firm and its component companies grew fat during the first phase of neoliberal economic policy and could not cope with the more recent phase, austerity. The immediate cause of the collapse is a failed acquisition spree since the crisis began. Yet the underlying cause is the disastrous relationship successive governments have had with the private sector. Whether the Thatcher, Major, and Blair governments believed the nonsense they spouted about the superior efficiency of the private sector is immaterial. Only the willfully ignorant could ignore the litany of failed privatizations and the extortion of PFI “public-private initiative” contracts that followed their policies. The real purpose of Thatcherite economic policy, which has become widely known as neoliberalism, was precisely to hand state resources and revenues to the private sector. …

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Carillion directors to be investigated
Source: BBC, January 16, 2018

The government has ordered a fast-track investigation into directors at the failed construction firm Carillion. The UK’s second biggest construction firm went into liquidation on Monday, after running up losses on contracts and struggling with heavy debts. The business secretary has asked for an investigation by the Official Receiver to be broadened and fast-tracked. The conduct of directors in charge at the time of the company’s failure and previous directors will be examined. Carillion’s business is now in the hands of the official receiver, which is reviewing all of Carillion’s contracts. The company employed 43,000 people worldwide, 20,000 in the UK, and had 450 contracts with the UK government. …

Carillion’s Government contracts could have been stopped by a single law. Why wasn’t it used?
Source: Hazel Sheffield, Independent, January 16, 2018

Carillion is part of what is known as ‘the shadow state’: a group of large companies secretively awarded government contracts to run Britain’s public services. There are others. …

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