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Issue 1

Our current issue assesses the impact of Obama's stimulus plan and takes a look at freight rail's continuing economic importance.

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Spencer Green
Chairman, GDS International

Sales and the 'Talent Magnet'

A lot is written about being a ‘Talent Magnet’, either as a company, or as President. It’s all good practice – listen, mentor, reward, provide clear goals and career maps. Good practice for the employer, but what about the employee?
26 May 2011

Report Card

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In light of the ASCE’s particularly damning assessment of its infrastructure, we speak to the director of Michigan’s Department of Transportation, Kirk Steudle, to find out what the state is now doing to make good.


“People want to move around a little differently, so we're going to be able to get to some of the transit initiatives that have been put on the back burner”
-Kirk Steudle

INFRA. So what are the key transport priorities for Michigan going to be over the next few years? Are there any major projects that you are currently working on that you can tell us about?
Kirk Steudle.
In Michigan we are working in a very multimodal sense. One of the biggest things for us at the moment is the high-speed rail initiative that the President has laid out. We think we are very well positioned for this and have actually been doing quite a bit in high-speed rail for the last 10 or 15 years, and so, incrementally, have been making that easier. We think there are some great opportunities there, and we believe we can cut our transit times from Detroit to Chicago by a couple of hours compared to what they are now.

A lot of what we are doing at the moment is focused on our light rail system. Detroit remains the largest urban area in the world that doesn’t have some form of a light or commuter rail system, so we’re working quite diligently on that. From there we’re looking into stretching that system into the suburbs, before having a commuter rail that runs as far as Ann Arbor. Essentially, our biggest priority is to give people different options on how they move around.

INFRA. The signature of Michigan’s Governor was among those on a recent letter praising President Obama for ARRA. But because people want to see fast results from the injections of this cash, do you think infrastructure projects need to be shovel-ready? Has that been a difficult for you, or did you have something of a backlog ready to go?
KS.
I don’t know if I'd say it was difficult, but it was certainly a challenge. Unlike some states that may have had three or four really big projects sitting on their shelf, in Michigan, we have been in this economic crisis for about nine years and so we’ve already been to the shelf quite a lot already. Last year, for instance, Governor Granholm did her own economic stimulus plan that provided transportation with about $150 million, and we reached back onto our shelf and grabbed projects and pulled them forward then: we were just replacing those when this call came in.

While we didn’t have anything ready to go, because we have been focusing so much on preservation and preserving what we had, we did have some big capacity projects that were already designed but just didn’t have any money behind them. Because of this, all we had to do was pull them out, refresh them, make sure they were up to current standards and then push them out the door. So what we have ended up with is about three or four big projects that range larger than $40 million – but it was a challenge to get them there. 

Nonetheless, we have now obligated half of the money the stimulus plan has given us, which was the target for the end of June. We reached that target three weeks early, and now, by the end of June can expect to have $400 million obligated.

INFRA. And how is the money breaking down in terms of where it is actually being spent. Obviously before you spoke about working in a multimodal sense, but are you finding that the spending is going more towards road and private transport, or does there seem to be a greater focus on trains and the public transport?
KS.
Actually, a lot of that was already spelled out for us. If you look at the dollars, the bulk is going towards roads and bridges. There’s just under $1 billion coming to Michigan and $847 million is going to roads and bridges, and $135 million are going to transit.

On top of that is the $8 billion initiative that the President put out there for his vision for high-speed rail, and that’s an important priority for us. We are working very diligently to get into that mix and make sure that we have a share of the pot. 

The one piece of investment that we got left out was the Federal Transit Administration (FTA) money, which was money geared towards new starts. Unfortunately for us, as the FTA goes through that ‘new starts’ process, we often get left out because we can’t prove the ridership. Of course, the reason we can’t prove the ridership is because there’s nothing here to compare it to – so we are complaining about that fiercely.

INFRA. Obviously you’re achieving things and getting projects moving, but do you think that, in the long-term, this money is going to have a big effect on Michigan?
KS.
There’s two pieces to that. Clearly the long-term depends on a lot of other economic factors outside of here, but frankly, I think we’re going to see brighter skies in Michigan.  We’re going to see the Chrysler and General Motors emerge from the bankruptcy pieces as better companies, and this whole thing that we’re going through is a well-needed restructuring within the state and in our thoughts about how we think about the economy. 

In the long term, it’s going to be good for us because we’re going to be able to get to priorities that the people have told us they require. People want to move around a little differently, so we’re going to be able to get to some of the transit initiatives that, in the past, have been put on the back burner; but at the same time, this short-term shot-in-the-arm is going to help us from a different perspective. Still, though, we have to remember that it’s still just a short-term answer: we still have to deal with the long-term funding issue and the fact that this summer the Highway Trust Fund is projected to go broke again.

There are still some challenges coming, but we think once we get through them we’ll be all right.

ASCE’s Michigan Infrastructure Report Card

Aviation
Grace C
Michigan's 200+ airports generate $4.3 billion for Michigan's economy each year. However, current infrastructure repair, maintenance and expansion needs exceed $1.3 billion over the next five years, a figure well beyond existing revenue.

Roads and Bridges
Grade D
38 percent of Michigan’s roads are in poor condition, 28 percent of the bridges are structurally deficient or functionally obsolete, and US truckers rate Michigan roads as third worst in the country.

Dams
Grade D
Over 90 percent of Michigan's 2,581 dams will reach or exceed their design life by 2020. Many dams are abandoned and pose safety hazards to downstream residents. No funding for improvements is currently available.

Transit
Grade D
Some form of public transportation is available throughout the state, but the capacities of most urban systems fail to meet demand. Improving public transportation services within the state is a key component in reviving Michigan's economy.

GPA = Grade D


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