Pay Me Now or Pay Me Later

Maintenance is often seen as the stepchild of infrastructure.  It easily slips from public notice in the face of more glamorous new construction.

Yet delayed or poorly executed maintenance can add billions of dollars to the private and public costs of infrastructure.  In addition, deferred maintenance hastens the need to replace assets by years, if not decades.  Many urban transit systems are testament to the high cost of inadequate maintenance.

Infrastructure spending has traditionally been divided into two categories: capital and operations and maintenance.  But such a breakdown can be misleading and is too simplistic to serve as a basis for allocating resources.  A more useful approach would be to think along functional lines. So capital spending can be split into new capacity and rehabilitation and operations and maintenance divided into its two components:

  •      New Capacity—expenditures for the engineering design or construction of new facilities or for plant and equipment that significantly expand existing capacity.
  •      Rehabilitation—capital-intensive activities that extend the useful life of a facility more than two years.
  •      Maintenance—expenditures on routine schedules to repair or maintain the good working order of existing facilities, plant, equipment, or rolling stock that neither adds new system capacity nor extends the life of facilities beyond two years.
  •      Operations—expenditures incurred on a routine basis for labor, utilities, engineering, and other overhead activities that support the day-to-day delivery of services.

For certain, a rigorous breakout of spending into each category is difficult.  It is particularly easy to confuse maintenance and rehabilitation.  For example, the two-year criterion used to differentiate between them is somewhat arbitrary.  The key is that “pure” maintenance focuses on short-term improvements (filling potholes) while rehabilitation has a longer-term impact.

Similarly, rehabilitation work and new capacity are often combined.  A road may be resurfaced at the same time that additional lanes are added.  Maintenance and operations also overlap.

In many ways, these four activities represent a continuum that, taken as a whole, could be called lifecycle costing.  In other words, inattention to one aspect increases the cost of all the others.  Finding the most cost-effective combination of spending, as opposed to focusing exclusively on building things, is one of the keys to effective infrastructure management.

Proper maintenance of infrastructure assets is important for two reasons.  First, there is a direct link between the quality of current services and the performance of the nation’s infrastructure.  Second, public perceptions of the overall quality of infrastructure services depend on good routine maintenance.

Just to be clear, lack of maintenance spending impacts long-term infrastructure costs.  Effective maintenance reduces rehabilitation costs and/or delays the time when such spending is required.

Although maintenance spending plays an important role in lifecycle costing, it is not always an obvious part of the infrastructure decision-making process.  This can result in maintenance being ignored or afforded neither adequate attention nor funding.

Since local governments own and operate most infrastructure assets, they also bear the heaviest financial burden for maintaining those assets.  Yet local governments do not always possess the financial resources or have the institutional flexibility to implement innovative maintenance programs. Consequently, they must be the main focus of efforts to ensure adequate maintenance.

Maintenance of infrastructure assets is surely not a politically compelling category of public spending. That adds to the dilemma of getting it properly funded.

Putting maintenance on par with other categories of infrastructure investment is not a simple matter, especially given the temptation to defer maintenance when the much higher costs it causes would likely hit on somebody else’s watch. That explains why elected officials all too often put the politics of new construction ahead of maintaining existing infrastructure.

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