Infrastructure

Infrastructure refers to the fundamental facilities and systems serving a country, city, or area, including the services and facilities necessary for its economy to function. It typically characterises technical structures such as roads, bridges, tunnels, water supply, sewers, electrical grids, telecommunications, and so forth, and can be defined as "the physical components of interrelated systems providing commodities and services essential to enable, sustain, or enhance societal living conditions."

History

Main article: History of infrastructure

According to the Online Etymology Dictionary, the word infrastructure has been used in English since at least 1887 and in French since at least 1875, originally meaning "The installations that form the basis for any operation or system".

The word was imported from French, where it means subgrade, the native material underneath a constructed pavement or railway. The word is a combination of the Latin prefix "infra", meaning "below", and "structure". The military use of the term achieved currency in the United States after the formation of NATO in the 1940s, and was then adopted by urban planners in its modern civilian sense by 1970.

The term came to prominence in the United States in the 1980s following the publication of America in Ruins, which initiated a public-policy discussion of the nation's "infrastructure crisis", purported to be caused by decades of inadequate investment and poor maintenance of public works. This crisis discussion has contributed to the increase in infrastructure asset management and maintenance planning in the US.

That public-policy discussion was hampered by lack of a precise definition for infrastructure. A US National Research Council panel sought to clarify the situation by adopting the term "public works infrastructure", referring to:

"... both specific functional modes – highways, streets, roads, and bridges; mass transit; airports and airways; water supply and water resources; wastewater management; solid-waste treatment and disposal; electric power generation and transmission; telecommunications; and hazardous waste management – and the combined system these modal elements comprise. A comprehension of infrastructure spans not only these public works facilities, but also the operating procedures, management practices, and development policies that interact together with societal demand and the physical world to facilitate the transport of people and goods, provision of water for drinking and a variety of other uses, safe disposal of society's waste products, provision of energy where it is needed, and transmission of information within and between communities."

In Keynesian economics, the word infrastructure was exclusively used to describe public assets that facilitate production, but not private assets of the same purpose. In post-Keynesian times, however, the word has grown in popularity. It has been applied with increasing generality to suggest the internal framework discernible in any technology system or business organisation.

Economics

Main article: Infrastructure and economics

Infrastructure may be owned and managed by governments or by private companies, such as sole public utility or railway companies. Generally, most roads, major ports and airports, water distribution systems and sewage networks are publicly owned, whereas most energy and telecommunications networks are privately owned. Publicly owned infrastructure may be paid for from taxes, tolls, or metered user fees, whereas private infrastructure is generally paid for by metered user fees. Major investment projects are generally financed by the issuance of long-term bonds.

Hence, government owned and operated infrastructure may be developed and operated in the private sector or in public-private partnerships, in addition to in the public sector. In the United States for example, public spending on infrastructure has varied between 2.3% and 3.6% of GDP since 1950. Many financial institutions invest in infrastructure.

"Hard" and "soft" infrastructure

Further information: Hard infrastructure and Soft infrastructure

"Hard" infrastructure refers to the large physical networks necessary for the functioning of a modern industrial nation, whereas "soft" infrastructure refers to all the institutions which are required to maintain the economy, health, and cultural and social standards of a country, such as the financial system, the education system, the health care system, the system of government, and law enforcement, as well as emergency services.

Uses of the term

Engineering and construction

Engineers generally limit the use of the term "infrastructure" to describe fixed assets that are in the form of a large network, in other words, "hard" infrastructure. Recent efforts to devise more generic definitions of infrastructures have typically referred to the network aspects of most of the structures, and to the accumulated value of investments in the networks as assets. One such effort defines infrastructure as the network of assets "where the system as a whole is intended to be maintained indefinitely at a specified standard of service by the continuing replacement and refurbishment of its components".

Civil defense and economic development

See also: Civil defense by country

Civil defense planners and developmental economists generally refer to both hard and soft infrastructure, including public services such as schools and hospitals, emergency services such as police and fire fighting, and basic financial services. The notion of Infrastructure-based development combining long-term infrastructure investments by government agencies at central and regional levels with public private partnerships has proven popular among Asian- notably Singaporean and Chinese, Mainland European and Latin American economists.

Military

Military strategists use the term infrastructure to refer to all building and permanent installations necessary for the support of military forces, whether they are stationed in bases, being deployed or engaged in operations, such as barracks, headquarters, airfields, communications facilities, stores of military equipment, port installations, and maintenance stations.

Critical infrastructure

Main article: Critical infrastructure

The term critical infrastructure has been widely adopted to distinguish those infrastructure elements that, if significantly damaged or destroyed, would cause serious disruption of the dependent system or organization. Storm, flood, or earthquake damage leading to loss of certain transportation routes in a city, for example bridges crossing a river, could make it impossible for people to evacuate, and for emergency services to operate; these routes would be deemed critical infrastructure. Similarly, an on-line booking system might be critical infrastructure for an airline. These elements of infrastructure are often the focus of recovery efforts in the aftermath of natural disasters. Damage to critical infrastructure could also result in a public safety hazard.

Urban infrastructure

Urban or municipal infrastructure refers to hard infrastructure systems generally owned and operated by municipalities, such as streets, water distribution, and sewers. It may also include some of the facilities associated with soft infrastructure, such as parks, public pools, schools, hospitals and libraries.

Green infrastructure

Main article: Green infrastructure

Green infrastructure is a concept that highlights the importance of the natural environment in decisions about land use planning. In particular there is an emphasis on the "life support" functions provided by a network of natural ecosystems, with an emphasis on interconnectivity to support long-term sustainability. Examples include clean water and healthy soils, as well as the more anthropocentric functions such as recreation and providing shade and shelter in and around towns and cities. The concept can be extended to apply to the management of stormwater runoff at the local level through the use of natural systems, or engineered systems that mimic natural systems, to treat polluted runoff.

Marxism

In Marxism, the term infrastructure is sometimes used as a synonym for "base" in the dialectic synthetic pair base and superstructure. However the Marxist notion of base is broader than the non-Marxist use of the term infrastructure, and some soft infrastructure, such as laws, governance, regulations and standards, would be considered by Marxists to be part of the superstructure, not the base.

Other uses

In other applications, the term infrastructure may refer to information technology, informal and formal channels of communication, software development tools, political and social networks, or beliefs held by members of particular groups. Still underlying these more conceptual uses is the idea that infrastructure provides organizing structure and support for the system or organization it serves, whether it is a city, a nation, a corporation, or a collection of people with common interests. Examples include IT infrastructure, research infrastructure, terrorist infrastructure, employment infrastructure and tourism infrastructure. the transportation of crude oil and petroleum products is being taken care by ONGC

Related concepts

The term infrastructure is often confused with the following overlapping or related concepts.

Land improvement and land development

Main articles: Land improvement and Land development

The terms land improvement and land development are general terms that in some contexts may include infrastructure, but in the context of a discussion of infrastructure would refer only to smaller scale systems or works that are not included in infrastructure because they are typically limited to a single parcel of land, and are owned and operated by the land owner. For example, an irrigation canal that serves a region or district would be included with infrastructure, but the private irrigation systems on individual land parcels would be considered land improvements, not infrastructure. Service connections to municipal service and public utility networks would also be considered land improvements, not infrastructure.

Public works and public services

Main articles: Public works and Public services

The term public works includes government owned and operated infrastructure as well as public buildings such as schools and court houses. Public works generally refers to physical assets needed to deliver public services. Public services include both infrastructure and services generally provided by government.

Infrastructure in the developing world

According to researchers at the Overseas Development Institute, the lack of infrastructure in many developing countries represents one of the most significant limitations to economic growth and achievement of the Millennium Development Goals (MDGs). Infrastructure investments and maintenance can be very expensive, especially in such as areas as landlocked, rural and sparsely populated countries in Africa. It has been argued that infrastructure investments contributed to more than half of Africa's improved growth performance between 1990 and 2005, and increased investment is necessary to maintain growth and tackle poverty. The returns to investment in infrastructure are very significant, with on average thirty to forty percent returns for telecommunications (ICT) investments, over forty percent for electricity generation, and eighty percent for roads.

Regional differences

The demand for infrastructure, both by consumers and by companies is much higher than the amount invested. There are severe constraints on the supply side of the provision of infrastructure in Asia. The infrastructure financing gap between what is invested in Asia-Pacific (around US$48 billion) and what is needed (US$228 billion) is around US$180 billion every year.

In Latin America, three percent of GDP (around US$71 billion) would need to be invested in infrastructure in order to satisfy demand, yet in 2005, for example, only around two percent was invested leaving a financing gap of approximately US$24 billion.

In Africa, in order to reach the seven percent annual growth calculated to be required to meet the MDGs by 2015 would require infrastructure investments of about fifteen percent of GDP, or around US$93 billion a year. In fragile states, over thirty-seven percent of GDP would be required.

Sources of funding

Currently, the source of financing varies significantly across sectors. Some sectors are dominated by government spending, others by overseas development aid (ODA), and yet others by private investors.

In Sub-Saharan Africa, governments spend around US$9.4 billion out of a total of US$24.9 billion. In irrigation, governments represent almost all spending. In transport and energy a majority of investment is government spending. In ICT and water supply and sanitation, the private sector represents the majority of capital expenditure. Overall, between them aid, the private sector, and non-OECD financiers exceed government spending. The private sector spending alone equals state capital expenditure, though the majority is focused on ICT infrastructure investments. External financing increased in the 2000s (decade) and in Africa alone external infrastructure investments increased from US$7 billion in 2002 to US$27 billion in 2009. China, in particular, has emerged as an important investor.

See also

• Airport infrastructure
• Asset Management Plan
• Critical infrastructure
• Green infrastructure
• Infrastructure as a service
• Infrastructure asset management
• Infrastructure security
• Land improvement
• Logistics
• Megaproject
• Pseudo-urbanization
• Project finance
• Public capital
• Public service
• Public works
• Sustainable architecture
• Sustainable engineering

References

Nurre, Sarah G. "Restoring infrastructure systems: An integrated network design and scheduling (INDS) problem." European journal of operational research. (12/2012), 223 (3), p. 794 - 806.

Bibliography

• Larry W. Beeferman, "Pension Fund Investment in Infrastructure: A Resource Paper", Capital Matter (Occasional Paper Series), No.3 December 2008
• A. Eberhard, "Infrastructure Regulation in Developing Countries", PPIAF Working Paper No. 4 (2007) World Bank
• M. Nicolas J. Firzli & Vincent Bazi, "Infrastructure Investments in an Age of Austerity : The Pension and Sovereign Funds Perspective", published jointly in Revue Analyse Financière, Q4 2011 issue, pp. 34– 37 and USAK/JTW July 30, 2011 (online edition)
• Georg Inderst, "Pension Fund Investment in Infrastructure", OECD Working Papers on Insurance and Private Pensions, No. 32 (2009)

External links

• Body of Knowledge on Infrastructure Regulation
• Next Generation Infrastructures international research programme
• Report Card on America's Infrastructure