Hamilton Kent Blog

The State of the Industry with HK’s President, Part One: Awareness and Funding

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Those who are invested in underground infrastructure might not be surprised by reports decrying the aging, chronically underfunded state of the industry today.

Combined with media accounts of combined sewer overflows (CSOs), sinkholes, bridge failures and more, these reports stress the urgent need for infrastructure repairs and restoration across the board.

“News networks will go someplace where a car was swallowed by a sinkhole,” says Bernard Grégoire, president of Hamilton Kent, “or a highway is completely blocked, and traffic is diverted elsewhere because of a culvert collapse. The social cost of these incidents are broadcast a lot more than before.”

One side-effect of increased media coverage is that it adds pressure to the municipalities or infrastructure owners who are selecting these contracts.

“When they have to do these emergency repairs too often, it doesn’t make good publicity and of course it brings great costs. Municipalities have started to change how they approach new projects,” says Grégoire.

Municipalities have to specify not only the type of material but also the method of installation. In addition, Grégoire says more and more cities have begun to require post-installation inspections as one of the project’s main conditions.

“The inspection during and after installation, verification of watertightness, validity, camera inspections, and so on — these will ensure that what was laid out in the tender is actually installed,” he adds. “They want to know it will provide the long-term properties they’re looking for.”

With increased visibility from digital and news media coverage, Grégoire believes the landscape of underground infrastructure funding will begin to shift.

“With the ASCE rating and other reports, people are aware of the need [for infrastructure spending],” he says. “They see the condition of the roads. I think it will remain top of mind for the government, and they will find funding — even if it’s only one year at a time or one project at a time.”

He adds that many industry players have been exploring the merits of public-private partnerships (PPPs). Although they may come with caveats, such as difficulties in controlling costs, even flawed PPPs can act as a learning exercise for future endeavors.

“PPPs are more often a funding avenue for municipal and sometimes state or provincial projects,” Grégoire adds. “Unfortunately, they perhaps focus too much on emergency repair as opposed to long-term plans.”

He expects heightened pressure on governments, both in Canada and the United States, to develop more long-term solutions. In addition, he says the low-cost, lowest-bidder approach to infrastructure projects will have to change.

That’s where life-cycle cost analysis (LCCA), combined with traditional funding approaches, could benefit the industry.

“An LCCA takes into account the type of product, their properties, the way they’re installed, the way they’re inspected, and the maintenance cost over time,” says Grégoire. “That, combined with the lower bid [approach], is a long-term solution that will help us build better infrastructure.”

Watertight products go hand-in-hand with that long-term vision. Grégoire gives the example of a new storm water system being installed in a city.

“You have all these costs: permitting beforehand, the right of ways, closing the roads while the work is being done, digging the trench, pipe material, back fill material, and the inspections after,” he explains. “If you wanted to make a difference, you would add a better gasketing system to make it more watertight.”

He estimates the added cost of the watertight system would add about one percent to the total.

“That little premium of one percent could make a huge difference on the longevity of the project,” Grégoire says, “The result would last 75 years instead of 50, or even far less in cases with poor installation practices.”

An extended lifecycle often translates to millions or billions of dollars in savings because it reduces the frequency of those costly, time-consuming installation projects and minimizes the need for emergency repairs. In the case of a sanitary sewer, it also prevents infiltration and protects the environment.

Although the solutions are clear to Grégoire, he admits the politics of infrastructure can sometimes get in the way of progress.

“When you build a sanitary system, you don’t have public awareness,” he says, noting that politicians typically can’t expect recognition as an incentive to start new projects. “It’s out of sight, out of mind. Unfortunately, it often takes a catastrophic failure to make infrastructure come back as a top priority.”

With that in mind, he stresses the importance of widespread engagement and communication between the public and the infrastructure industry.

It may take many more years for meaningful change to take hold, but Grégoire feels the industry will catch up, slowly but surely, in response to heightened awareness.

“The more people are active — the more they are socially or environmentally conscious — the more these issues will bubble up and be prioritized,” he says.