Infrastructure projects, done wisely, will provide short term benefits like providing jobs, as well as, long term benefits like improving the efficiency of the tax base which means more tax revenue at the same tax rates or lower, certainly a plus in my book. However, there are so many pitfalls to throwing money at infrastructure projects. Allow me to list some of them.
1. The problem with federal and state funded infrastructure projects in certain areas of the country is that they face headlong corruption and bureaucracy problems as a result of the government getting involved. Take for instance the Big Dig and Deer Island Projects in Boston. Both had cost overruns in excess of 50%. Now that is not a lot when you are talking $1.00, but when you are talking $10,000,000,000.00 (in the case of the Big Dig) that is another $5-6 billion. So a $1 trillion plan now costs our country north of $1.5 trillion. The reasons for these overruns are immense:
a. Forcing projects to be closed shop, if they are closed shop allowing the government to negotiate the contracts with the unions instead of the contractors. Unions need to learn to be competitive and run themselves like a business instead of a government agency. I have seen union contractors and subcontractors be competitive with nonunion ones, but they are actually more efficient and ???bring it??? to a jobsite, but these are few and far between. On those projects in Boston, 1 in 4 union workers were necessary for the project and of the 3 out of 4 that were, they only operated at 60-75% efficiency. Thus providing a major reason for cost overruns and a drain on our taxpayer dollars.
b. Design and then Build instead of Design/Build. If you look at the most major successful projects that have been done in the country over the course of the last 10-15 years (such as I-15 Corridor in Salt Lake City, T-Rex in Denver, etc.) they were design/build jobs, where the design was done by private companies that were under the umbrella of the contractor responsible for building the work improving constructability, reducing change orders an streamlining the process, with only government oversight to assure quality. They were successful and the companies made money and the states got their projects usually well ahead of time and at their budget, unlike the two Boston projects which were first Design, then Build.
c. Corruption was rampant in Boston. From contractors, to unions, to suppliers, to government officials. Expediting infrastructure projects to get the economy kick-started, heightens the level of corruption such that it is harder to clamp down on, because things are moving so quickly. Corruption almost always breeds cost overruns, quality issues and safety problems
d. I have used large heavy/civil projects as examples, but the same applies to smaller projects, like museums and schools just the same.
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