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The Kiplinger Letter FORECASTS FOR MANAGEMENT DECISIONMAKING 1729 H St. NW, Washington, DC 20006-3938 • KiplingerForecasts.com • Vol. 80, No. 51 Dear Client: Washington, Dec. 19, 2003 America's infrastructure is strained, INSIDE THIS LETTER struggling to meet increasing demands on roads, bridges, water use, power plants, railroads , Traffic Snar;s cads, bridges,etc. __ r_s , :c_s_e ±is_osal s- s_ets , - etc . _ The problem will F Sea & Airpors Expansion plans affect businesses by cutting productivity gains, slowing growth Water Keeping acequate supplies in the economy and adding to production costs. Energy Fixing:ne electricity grid It will force new strategies to avoid tie-ups. Dams More failures likely Congress is promising major assistance. But the tab for upgrades is staggering: Schools Enrollment gains ease Nearly $2 trillion over five years to address Telecom Plenty of capacity the nation's top deficiencies. Available funds More People Planningforgrowth will fall far short of reaching that amount. MENDING Many U.S. utilities and public works are becoming antiquated, AMERICA notably in the Northeast and Midwest. Those in high-growth areas, mainly in the South and Southwest, are struggling to keep up with demand. There's plenty of work to be done. For example: Roads. A third of major roads are in mediocre or poor condition. Bridges. Nearly 30% are obsolete or structurally deficient. Dams. More than 10,000 are considered at high risk of failing. Waterway locks. Half of them are past their 50-year life spans. Schools. About 20% need extensive repairs to meet standards. Sewer systems. Some are 100 years old, and many require upgrades. A new wave of federal funding will address many of these issues. Next year, Congress will OK about $375 billion to be spent over six years to build new and upgrade old roads, bridges and mass transit systems. But more than bricks and mortar is needed to end growing pains. Innovative business practices. . .subsidizing use of mass transit by employees, encouraging telecommuting, staggering employee work hours, even setting up satellite offices in the suburbs to cut down on commutes. Better government management of existing facilities. For example, new procedures to quickly clear roads when accidents threaten tie-ups. And technology. More electronic toll taking to minimize backups. Improved coordination of traffic signals. Computer chips to track cargo. Sensors and other monitors on bridges, tunnels and other structures to detect problems early on and avoid catastrophic emergency shutdowns. And new materials that lengthen the lives of roads, bridges, pipes, etc. What's ahead for America's infrastructure is a big subject, so we're dedicating this entire preholiday Letter to discussing it. We're also including a two-page regular Letter. . .our last of the year. Pr 100gs Lett(ISSN 1 5367130)is P1ashod*MWy b awe veal.91544,o yeas.f2LMee years Subsarip6m inquires:acc-5444755msub.serwattek.Vitor wnswovashingwemmuzsmaJmvsmonccuosmi PeSOab ER:$ovay.s,da'aa.9 Eaftadalin/wmadorr: rtl..2a2-0B2646£Far,1Ot7Al26: POSIVASIER Sera am as ramie o Pia 4c LMw PO.Boa]295.NNam IA 51591. EIW.NWApl plowx or Websae,x'pYpwFpe asewm