An infrastructure project is a construction of a complex system of facilities, equipment or similar physical assets that supports the economic development and social well-being of a community. It involves the building, renovation, care for and even reconstruction of these structures. This type of project can be broken down into two categories: hard and soft infrastructure.
The former consists of hard, tangible projects like roads, railways, water treatment facilities and electricity transmission lines. The latter is more complex and includes the data centers, cell phone towers, and fiber optic cables that support a digital economy. It requires multi-agency coordination and long timelines for approval.
Infrastructure projects are ongoing all the time. Your local community may be getting a new school or a new wing added to a library. Those are considered infrastructure projects, as well as the regular road repairs that many communities must undertake. Similarly, renewable energy projects are also part of the infrastructure landscape.
A recent study by the American Society of Civil Engineers found that America’s public infrastructure is in disrepair. The organization grades the condition of aviation, bridges, dams, drinking water, energy, hazardous waste, inland ports, levees, parks and recreation, rail, schools, solid waste, transit and wastewater every 2-4 years.
The study found that, overall, the returns from infrastructure investment have progressively declined on a project-by-project and dollar-by-dollar basis over the past two decades. This is due in large part to the fact that government spending on infrastructure tends to favor projects that deliver benefits to specific interest groups rather than the broader population. This increases the costs of maintenance for existing infrastructure and exacerbates the natural decline in returns from investments in new infrastructure.
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