“How the recent collapse of a vital artery could signal a perfect time to buy” —
Bridge collapses are a certainty if they’re not maintained.
Despite how far human ingenuity has come, nothing we make or build is meant to last forever, much less a few dozen decades.
But seeing as how most bridges in America are well past their design life and have had little to no refurbishments since the day they were built, we can pretty well expect closures, if not down right collapses, of some sort to be an increasingly common occurrence.
How long can our government keep ignoring this costly and dangerous problem?
Last month’s falling of the Skagit River bridge just north of Seattle is yet another in a long line of grim reminders that America’s busy roadways are well behind the times — just don’t tell that to the hundreds of millions of commuters across our nation who rely on bridges to get from point A to point B.
But is a silver lining to all of this?
With the issue now reaching a fever pitch, smart investors could position themselves to profit from a massive government cash injection in our ailing infrastructure.
You see, in the annual survey published by Better Roads, there are 602,154 listed bridges in the US as of 2012.
Out of that, nearly a quarter of them are classified as structurally deficient (SD) or functionally obsolete (FO) – a figure that amounts to roughly 150,000 bridges.
According to the American Society of Civil Engineers (ASCE), the average age of our bridges is 42 years… and some 200 million trips are made across old, deficient bridges in major metropolitan regions every day.
FYI, the busy Skagit River crossing is 58 years old and is listed as functionally obsolete.
The cause of the collapse was a result of an 18-wheeler with an over-height load clipping several crossbeams and weakening the structural integrity of the outdated design.
While no one was killed in the accident, two vehicles plunged into the river along with the bridge’s damaged north span, injuring three people.
In an Associated Press report, crossings such as Skagit River are only “kept standing by engineering design, not supported with brute strength or redundant protections like their more modern counterparts…if a single, vital component of the bridge is compromised, it can crumple.”
Well that’s comforting.
The Federal Highway Administration (FHA) states that over $20 billion would need to be spent annually through 2028 just to improve bridge deficiencies across the country. And the plight of America’s bridges points to a far bigger crisis – an aging transportation network that’s rapidly becoming too decrepit to manage.
Not surprisingly, bridge infrastructure in America has been given a C+ rating, while road infrastructure has been issued a D grade by ASCE’s annual infrastructure report card.
If you think $20 billion is a lot of money, FHA further estimates that an additional $170 billion per year is required to upgrade our nation’s crumbling roads. That’s $190 billion of construction/engineering this country sorely needs in order to prevent further decay.
And it’s this cry for help that could make savvy investors very wealthy over the next decade.
In fact, it has already begun.
It was only a week before the Skagit River incident that President Obama issued a memorandum that called for all federal departments to follow new procedures to speed up permitting for infrastructure projects.
Obviously, the leaders in Washington State didn’t get the memo in time.
But when news of the collapsed bridge went viral, their reaction was swift.
One week later, an RFP (request for proposal) was promptly issued, and six contractors submitted their bids immediately. A winner is expected soon.
This sets a great example for future infrastructure management. I strongly believe, we could see more RFP’s issued and handled in the same, timely manner moving forward.
With thousands of roads and bridges in distress, and the prospect of getting permits fast-tracked, some of the biggest names in construction and engineering are bound to land some lucrative contracts in the coming years.
Three names to put on your radar include: Fluor Corporation (FLR:NYSE), Jacobs Engineering (JEC:NYSE) and URS Corp (URS:NYSE).
The sheer size of their workforce and resources mean these companies will have the ability to bid and work on projects all across the country.
Now it’s up to the government to make it happen. Ignoring the problem won’t make it go away nor make it any cheaper.
Imagine an entire transportation infrastructure overhauled to last another 50 years… maybe even 150 years.
Commuters won’t be the only ones rewarded.
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