Promises and plans for US public infrastructure 01 Feb 2018

Shani Wallis, TunnelTalk

A plan to raise US$1.5 trillion to "rebuild our crumbling infrastructure" was a pledge by President Donald Trump in his State of the Union address to Congress for 2018. While much was anticipated from the infrastructure line-item in the speech, (and while infrastructure is said to be the next big focus of attention by the White House Administration after national security, immigration and tax reform), there was little detail to satisfy infrastructure owners or the engineering and construction industries.

One clear note of direction from the President for building “gleaming new roads, bridges, highways, railways and waterways all across our land”, was that every Federal dollar of infrastructure investment should be "leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment”. The US is late in the move to adopt PPP (public private partnerships) compared to other countries, and substantial detail is yet to be added to the proposal. For some states, revised legislation must also pass to allow for the concept and introduce toll structures or user fees to repay the private capital investment.

Another point by the President was a priority to reduce the regulation for gaining permits for construction projects. In his words he said: “We built the Empire State Building in just one year. Isn't it a disgrace that it can now take ten years just to get a minor permit approved for the building of a simple road?” He called for the legislation to reduce the time required to approve building permits to as little as two or even one year.

Fig 1. Underground investment for 2016-2021
Fig 1. Underground investment for 2016-2021

Speaking of upgrading “crumbling infrastructure” is particularly appropriate. As TunnelTalk reported back in 2009, when the American Society of Civil Engineers (ASCE) said that US$2.2 trillion was needed then, and over the coming five years, to bring elements of US infrastructure up from their poor D+ or D- ratings to a mediocre C or a good B grade. Drinking water systems got a D- with aging pipelines losing an estimated 7 billion gallons of clean drinking water a day. Wastewater networks, with another D-, are still discharging billions of gallons of untreated wastewater into US waterways each year.

Today the ASCE gives an overall D-plus grade to the condition of the national highways, bridges, waterways, railways, tunnels, airports and water and sewer systems and estimates that the nation’s infrastructure is in need of an investment of $2 trillion more than is already budgeted over the next 10 years.

For underground public infrastructure specifically, reports within the industry estimate a total spend of about US$68.5 billion for tunnelling and underground space excavation for the years 2016-2021 (Fig 1) with about $40 billion of that set for investment in planned projects in the 2018-2021 period. Of the different projects, transportation tunnels for rail, transit and highways will dominate, with about 50% of that investment in rail and transit, 35% in highways and about 15% in water and wastewater projects.

Alternative procurement models to transitional design-bid-build contracts are also expected to increase with about 50% of the projects being developed as design-build contracts and with the PPP model gaining some momentum.

US inventory of highway tunnels (left) and the leading statistics (right)
US inventory of highway tunnels (left) and the leading statistics (right)

With regard to tunnels on the national highways, Tomas Everett, Associate Administrator in the Office of Infrastructure at the US Department of Transport, explained in an address at the Australasian Tunnelling Conference in October last year (2017) that a predicted growth in the population of the US of 70 million by 2035 will place greater strain on the country’s road infrastructure leading to regions of major congestion and a continuing need for substantial investment in roads and public transport projects. His presentation also included details of the tunnels that are on the existing national highway network (Fig 2) and that highway investment continues to be funded by a gasoline tax of 18.4c/gallon that is not index linked and has not changed since last being set in 1993.

Developing PPP proposals for financing complex infrastructure projects was one of the presentations at the George A. Fox Conference in New York in January. Thilo Techlenburg, Chief Operating Officer of North America for investor and asset manager company Meridiam, which is based in Paris and specialized in developing, financing and managing long-term public infrastructure projects, explained that a PPP project is usually financed in a split of 10% equity by the project stakeholders and 90% by low cost borrowing debt. Equity, he explained is more expensive than debt but lending institutions are highly risk averse. Private sector partners therefore require incentives to mitigate public sector risk, for example the first $1 million of any claim would be absorbed in the contract and rest with the public sector partner. Techlenburg also explained that most PPP arrangements allow for only non-recourse financing, and that there can be no going back to the project company stakeholders for more money should the project suffer cost overruns.

Elizabeth River Tunnel toll charges at 1 Jan 2018 with off-peak rates on weekends and holidays
Elizabeth River Tunnel toll charges at 1 Jan 2018 with off-peak rates on weekends and holidays

Another presentation at the Fox Conference related the construction of the 3P Elizabeth River Midtown immersed tube highway tunnel project in Virginia which was “delivered a year ahead of schedule and below budget” according to presenters Wade Watson, Project Director of project contractor Skanska and Fred Parkinson, Vice President of project engineer WSP.

In his presentation, Bill Edgerton, Principal at McMillen Jacobs Associates compared, contrasted and gave the good and not-so-good aspects of the different procurement methods adopted by DC Water in Washington DC to advance the four major projects in its CSO Clean River tunnel project programme, ranging from traditional design-bid-build to fast-track design-build and different variations in between.

Two presentations represented current projects needed urgently to rehabilitate aging and failing underground infrastructure.

First was the Rondout project to bypass and replace a seriously leaking section of the Delaware aqueduct tunnel under the Hudson River in New York State. The $1 billion project for the New York Department of Environmental Protection (DEP) and the $706.6 million construction contract awarded to the Kiewit-Shea Joint Venture in 2016 will prevent leakage of up to 20 million gal/day through the fractured limestone geology of the 72-year-old existing tunnel as it runs under the Hudson River and delivers more than half of the drinking water supply to New York City.

The other urgent tunneling project presented at the conference was the twin tube Gateway railway project also under the Hudson River and between New Jersey and Penn Station in New York City. The project, which is largely the same as the ARC (Access to the Regions Core) project that was started and terminated in 2010, is being pushed forward urgently by Federal railway operator Amtrak for two counts:

  • urgent rehabilitation needed of the existing twin rail tubes under the Hudson River to Penn Station after their complete inundations and damage by the devastating Superstorm Sandy that hit the New York region in October 2012 and
  • to provide desperately needed additional rail capacity on the routes in and out of Penn Station. Current passenger numbers on existing train services are double that of 40 years ago explained James Richter, Deputy Chief Engineer Structures of Amtrak, and capacity needs to double now to meet projected demand for the next 40 years.
Deterioration following Storm Sandy damage
Deterioration following Storm Sandy damage
Alignment of Gateway project
Alignment of Gateway project

The existing twin tube tunnel has been in service since 1910, said Richter, and the storm of 2012 illustrated that there is no resilience to the system. The inundation took the facility out of action as damage to mechanical and electrical equipment and clean up of the structure was completed. “The structure of the tunnels is safe,” said Richter, “but there is deterioration and there will be increasing unreliability of the repaired equipment until a thorough reconstruction can be undertaken.” But this cannot be programmed until the new tunnels are in place and in operation. “Once the new tunnels are in service, the old tunnels can be taken out of service, one at a time for a 1.5-2 year complete reconstruction.”

Design-build and design-bid-build procurement strategies are being developed for different parts of the mega project and progress was reported to be at the 20% design level. “But progress into construction is all subject to availability of funding,” said Richter with the project pursuing Federal as well as State and local funding resources.

Another interesting presentation at the conference was about the construction of the Brenner Base railway tunnel through the Alps between Austria and Italy in Europe. Presented by Gerhard Urschitz, Managing Director of Strabag North America, a most interesting point of comparison for contract values between Europe and North America. He explained that the 55-month Tulfes-Pfons Lot contract at the north Innsbruck end of the project and for 15km of 8m diameter TBM exploratory tunnel excavation, plus a total of more than 23km of drill+blast excavation to advance the two 8m diameter main running tunnels, was awarded to the Salini-Impregilo/Strabag JV mid-2014 for €380 million or about US$460 million equivalent. A recent bid by Strabag for a 7.5 mile (12km) TBM, segmentally lined sewer in Canada was the same price.

Advancing excavation work for the Brenner Base tunnel
Advancing excavation work for the Brenner Base tunnel

Although he said he had not completed a detailed comparison, it was discussed by delegates in the coffee break and much of the difference it was suggested is due to labour laws, union requirements and staffing practices in North America where there are many times more labour and staff on projects than is normal practice in other countries.

In the mix of a very successful Fox Conference for 2018, Giuseppe Quarta, Executive Vice President of Lane Construction Corporantion, described the work completed by parent company Salini-Impregilo to increase the capacity of the Panama Canal with new locks of impressive scale excavated, built and equipped on both the Pacific and the Atlantic sides of the vital waterway; and Ed Plotkin of New York closed proceedings with an entertaining and interesting review of risk assessment and the workings and engagements of Dispute Review Boards on complex tunnel and underground space excavation projects.

TunnelTalk attended the conference and joined the receptions of the Moles Gala Dinner event the night after and will look forward to being in New York for the events again next year.

           

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