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n i m p o r t a n t e l e m e n t o f a c i t y o r r e g i o n s e c o n o m i c p r o s p e r i t y a n d v i a b i l i t y i s a d e q u a t e i n f r a s t r u c t u r e . R o a d s , w a t e r , s a n i t a t i o n , a n d o t h e r t y p e s o f p u b l i c w o r k s c o n s t i t u t e a n i n t e g r a l c o m p o n e n t o f m u n i c i p a l s e r v i c e d e l i v e r y . C i t y a n d r e g i o n a l t r a n s p o r t a t i o n n e t w o r k s c o n s i s t i n g o f r o a d s , r a i l w a y s , A airports, and harbors foster a vibrant, interconnected business climate by providing the avenues through which trade takes place. In the digital economy, telecommunication links have reduced the importance of location, making the development of high-tech infrastructure vital to growth. Fiber-optic cables, spanning loops, and satellite farms are now as important as traditional public infrastructure. The Information Age has also created an increased emphasis on quality of life, while parks, schools, and recreational facilities serve to make a community more attractive to potential residents and businesses, all demands that place further stresses on infrastructure. Infrastructure renewal and maintenance is vital to sustained growth and development.

These projects require financial and personnel resources to design, engineer, construct, and maintain. Traditionally, state and local governments have relied upon taxes and bonds for funding and on public-works departments or agencies for project delivery. Recently, there has been an increased reliance on the private sector for all facets of infrastructure projects, from design and engineering to construction and on to operation and maintenance. These outsourcing arrangements, often called public-private partnerships, range from small contracts for a limited scope of services to very large contracts for turnkey delivery of completed facilities and beyond. Their proliferation has increased participation by the private sector in infrastructure projects and changed the face of infrastructure delivery.

Public agencies outsource because strains on their finances, project delivery schedules, and personnel resources have left them unable to meet the infrastructure demands of thriving economies. In 1998, the American Society of Civil Engineers estimated the cost of repairing and updating the nation’s infrastructure to be $1.3 trillion (see Table 1).1 The estimates may be a bit self-serving, but similar figures come from a variety of sources: the U.S. Department of Transportation estimates that our highways and bridges need over $56 billion per year in investment over the next 20 years;2 the General Accounting Office in 1995 estimated $112 billion in immediate needs for school maintenance and upgrades;3 the National Education Association


American Society of Civil Engineers, 1998 Report Card for America’s Infrastructure (Washington, D.C.: American Society of Civil Engineers, 1998).


Federal Highway Administration, 1999 Status of the Nation’s Highways, Bridges, and Transit: Conditions and Performance (Washington, D.C.: U.S. Department of Transportation, 1999), p. ES-11, www.fhwa.dot.gov/policy/ 1999cpr.


General Accounting Office, School Facilities: The Condition of America’s Schools (Washington, D.C.: General Accounting Office, 1995).


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