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Bill would help stimulate water and wastewater infrastructure investment

By Michael Clark - 25 May 2011 9:9:0 GMT
Bill would help stimulate water and wastewater infrastructure investment

Two Senators have introduced a bill, The Sustainable Water Infrastructure Investment Act of 2011, that would remove bond caps for water and wastewater infrastructure projects. The act, if passed, would help stimulate much needed investment in critical water and wastewater infrastructure.

Various studies indicate the need for increased investment. The American Society of Civil Engineers, in its 2010 infrastructure report card, gave both wastewater and drinking water a D-, citing aging, leaking infrastructure insufficient to meet future demands. ASCE estimated an annual spending shortfall of $11 billion.

In 2002, the EPA estimated that the spending gap of over $500 billion dollars from 2000 to 2019, given existing spending levels.  Climate change is proving another significant challenge. A study prepared by the National Association of Water Agencies found the cost of infrastructure improvements needed to adapt to climate change to be between $500 billion and $1 trillion by 2050.

Clearly, there is a need to invest, and the bill seems a step in the right direction; however, the estimate of potential additional investment that the bill would create, $50 billion over the next ten years, is a pittance. Also, similar bills have been unsuccessfully introduced in the past, in 2005, 2006, 2007, 2008, 2009, and 2010, dying in committee each time. Based on this track record, the new bill may be headed for the dust bin.

The financial meltdown has left states, cities, and towns struggling to make ends meet. Without this legislation or any other innovative financing mechanism, it seems the spending gap may only get larger. Morescary is that the ASCE estimate of annual spending shortfalls does not include the inevitable increase in demand that will follow population growth over the coming decades. With demand increasing and funding decreasing, the prospects for our water and wastewater systems are grim.

The implications are far ranging. Crumbling water and wastewater infrastructure may adversely impact the environment, water resources, and the economy. In the long term, the continued dearth of financing mechanisms may also leave towns and cities, unable to keep up with capital and O&M costs, to transfer water services and infrastructure to private water companies. Private water companies have yet to get a foothold in the US, like they have in England, but ever increasing spending gaps may stimulate the move to widespread privatization of water and wastewater services which has a universe of implications on its own.

Though the bill would not solve the problem, it's a start, and its passage would finally put water and wastewater infrastructure on equal footing with airports and solid waste, which are currently exempt from bond caps due to their criticality. The argument could easily be made that water and wastewater infrastructure is even more critical. Current law, however, suggests otherwise. This bill could remedy that.