Effective transport infrastructure spending

If you thought that wasteful and unprioritized investments in public transport infrastructure was the exclusive preserve of government spending in India, here are some comments about the transportation component of the Obama stimulus plan in the US.

First, David Leonhardt writes on the need to put in place mechanisms to ensure that the stimulus spending in public infrastructure is "smart",

"In the current system, the federal government sends money to states without any real effort to evaluate whether it will pay for worthy projects. States rarely do serious analyses of their own. They build new roads before fixing old ones. They don’t consider whether those new roads will lead to faster traffic or simply more traffic. They spend millions of dollars on legislators’ pet projects and hulking new sports stadiums. In the world of infrastructure, cost-benefit analysis is still a science of the future."

And second, Phineas Baxandall expresses concern about "how outdated transportation wish lists sent by the States to Congress ignores current trends and neglects urgent national priorities",

"Only about one-third of state Departments of Transport (DOTs) have released to the public the project lists they submitted to Congress. However, a majority of the nineteen that have come to light are badly out of touch with the current trends, public priorities and transportation system needs... Most stimulus project lists from state DOTs prioritize new highways while paying relatively little attention to repairing crumbling bridges and roads and even less emphasis on forward-looking transportation options, such as public transit and intercity rail... nineteen states would spend more than 75% of funds on highways and only 17% on public transit or intercity rail... seven states would allocate 1% or less, including four that would allocate nothing at all.

Of the fourteen state lists for which adequate data on types of proposed highway spending were available, states on average would divert the majority of highway funds for new and expanded roads rather than addressing their backlog of repair and maintenance projects."

You could almost use the same words to describe the problems with similar transportation programs of the flagship Jawaharlal Nehru National Urban Renewal Mission (JNNURM) or Pradhan Mantri Grameen Sadak Yojana (PMGSY) and other schemes in India - misplaced priorities, political pork-barrel, white elephants, laggard states, skewed towards new works and against renovation and maintenance, bias towards the big projects and against the small, etc. It also appears that both countries straddle the same boat in the lack of application of even simple evaluation techniques like cost-benefit analysis, leave alone more rigorous and professional project appraisal techniques, to identfying, prioritizing and finalizing the projects.

However, in the recent years, some level of transparency has emerged in India, atleast in access to information about the details of the works proposed and sanctioned. The process of identification of projects and its sanction process is reasonably transparent in schemes like JNNURM. All the sanctioned projects, with their details are available in the websites. Interestingly, this does not appear to be the case in the US. Sample this approval about some of the "positive features" of the Obama plan from David Leonhardt again,

"It will list on the Web the projects that the federal government is financing — an idea that, amazingly enough, is considered radical — and will require that mayors and governors sign off on projects. That will make it harder for them to lobby for projects now and criticize those same projects later."

Phineas Baxandall has six suggestions for the effective use of these funds

1. Any road funds should go first to maintenance and repair of structurally deficient bridges and roads, not new highways or lanes;
2. The combined total for public transit, intercity rail, and bicycle and pedestrian projects should be no less than funds for highways;
3. Public transportation funds should include support for operations so agencies can accommodate the rising demand.
4. Surface Transportation Program highway funds should be distributed as under current law so that a portion of resources flow directly to metropolitan areas that know best about which local projects are needed;
5. All states, cities, and agencies should publicly disclose the stimulus lists they have submitted;
6. Direct recipients of stimulus funds should report on how money was spent and any transportation spending that it displaced.

Atleast Sl Nos 1, 2, 5, and 6 are of equal importance for our programs like JNNURM and PMGSY!