6.1: Introduction

Some infrastructure managers adopt a narrow view of their work, focusing simply on maintenance and rehabilitation decision making. However, an appreciation and understanding of the overall performance, costs, and finance of infrastructure is extremely useful in interacting with the users of infrastructure and organizational decision-makers. For example, an extremely congested roadway may be in good physical condition, but users of the roadway are likely not to appreciate the good pavement condition while waiting in traffic queues. Figure 6.1 illustrates a roadway in good condition but with heavy traffic congestion. This chapter is intended to provide an understanding of the fundamentals of infrastructure costs and finance topics.

The amounts and components of infrastructure costs depend upon your viewpoint. For a building manager’s viewpoint, costs might be limited to the initial construction (or the payments for borrowed money used for construction), building utilities and maintenance. However, the building occupants might incur costs if the roof leaks, power fails or water is unavailable. If the building has a boiler, then air emissions might impose costs on nearby residents. The air emissions costs are often called ‘external’ since they don’t appear on any accounting sheet for the building. However, any public health effects due to such air emissions represent real social costs. Whenever considering costs, the appropriate viewpoint should be selected, whether social or private!

Figure \(\PageIndex{1}\): Illustration of Good Roadway Pavement Condition but Heavy Traffic Congestion. Source: FHWA, Public Domain, https://international.fhwa.dot.gov/pubs/pl07027/.