It’s been more than a year since the $1.2 trillion bipartisan Infrastructure Investment and Jobs Act (IIJA) was enacted. Only now is the literal and figurative rubber starting to hit the road.
At least $120 billion for specific projects have been announced so far and, as the money begins to flow, important course corrections are already evident. It is especially important to accelerate two of the IIJA’s modern priorities: broadband and the electric grid, which will require careful collaboration between government and business leaders.
Vital investments
High-speed internet, especially after the COVID-19 pandemic, has become a virtual prerequisite for participation in many aspects of American life. But not all Americans have access–especially those in low-income communities or in sparsely populated areas–a gap that the new infrastructure law seeks to address with a $42.5 billion program designated for unserved or underserved communities.
That funding is still tied up. Specifically, releasing the funding requires finalized maps from the Federal Communications Commission that illustrate the areas and communities without high-speed internet access. Just recently, the FCC released draft versions of the maps. Now, various stakeholders–including individuals, governments, and businesses–are working together with input to improve its data and meet a Jan. 13 deadline. Such interactions will make the difference between that $42.5 billion filling societal gaps quickly or suffering delays.
The other component of the infrastructure bill that warrants urgent action is America’s power grid, which is mainly in the hands of the private sector. This winter is likely to show strains on the power grid, marked by rising wholesale prices or even outages. Energy has become scarcer and more expensive since the Russian invasion of Ukraine, and power grids have lost some capacity due to the retirement of some coal and nuclear plants.
This makes it imperative to get new energy projects, including renewables and long-range transmission, done quickly. Expanding the capacity of the electric grid is also imperative for meeting the needs of electric vehicles and home heating, among other factors.
Power grid strains in recent years under extreme heat or cold have underscored the need for increased resilience. Fires caused by snapped long-range lines have been devastating. Renewable sources of electricity, such as solar and wind, benefit from long-range transmission lines, which connect people to power sources that are often remotely situated.
Connecting regional grids can help mitigate variability in demand and supply. The problem has often been that these long-range projects frequently span many jurisdictions, subjecting them to too many veto points. We should consider regional compacts among states and federal reforms to limit the number of deciders.
Beyond these two important priorities, collaboration between public and private stakeholders is also urgently needed to weather a variety of emerging challenges that are nothing new for infrastructure initiatives and need to be preempted in these opening phases.
Obstacles and solutions
Past projects have too often been marked by cost overruns, regulatory paralysis, coordination difficulties, and conflicts among federal, state, and local government entities, contractors, and sub-contractors.
Under current conditions, implementing the IIJA effectively is especially challenging: materials and labor are scarce, war and a lingering pandemic have destabilized the world economy, inflation is at a record high, and regulatory and bureaucratic hurdles create a tangled labyrinth.
These challenges are steep but surmountable. Getting things right starts with transparency, which requires, among other steps, that federal and state governments announce precisely where infrastructure investments are going. They also need to keep the public informed on how and where the money is spent. Among other benefits, transparency will facilitate learning from past projects’ successes and failures.
We must make sure that funded infrastructure investments are not bogged down in the permitting processes. Numerous and uncoordinated federal, state, and local obstacles can delay or cripple infrastructure projects and increase their costs: overly-long permitting processes, last-minute lawsuits by the public or public-interest groups, and an excess of regulatory deciders with the ability to slow down or obstruct a project. Inflation is already devaluing the money that was allocated–delays will only make this worse.
Public-private partnerships and creative contracting methods, including integrated project delivery, can help leverage key private sector strengths. Government officials will have to work closely with business leaders to coordinate between different types of infrastructure and nip potential conflicts in the bud, for example, by including broadband conduits in tunnel projects, expanding highway access for new airport terminals, and designing light rail lines in the median of new highways.
Public and private sector leaders should also collaborate to address both the material and labor that infrastructure projects require. The IIJA represents a historic opportunity to reinvent an apprentice structure across a wide range of trades, bringing much-needed skills to the American workforce. The federal government, for its part, should consider reforms to facilitate trade in construction materials.
Effectively implementing the infrastructure law would not only boost economic growth and competitiveness but will improve the lives of the American people. Addressing our nation’s infrastructure needs will take collaboration that uses the best strengths of our federal, state, and local governments in cooperation and partnership with private sector leaders.
Nathan Rosenberg is a Founding Partner of Insigniam. Tamara Lundgren is the president and CEO of Schnitzer Steel Industries. Michael Hopkins is the CEO of Bakken Midstream. They are members of the Committee for Economic Development of The Conference Board’s Infrastructure Committee.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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