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Michigan’s Troubled Bridge Over Trade Waters

Regular readers of the Avenue have seen this blog more than once make the case for a national infrastructure policy, focused on strategic investments that boost our competitiveness in a global economy. We recognize that repetition doesn’t necessarily make the national infrastructure debate seem any less wonkish or abstract. But it’s playing out now in Michigan, where the state legislature is in the final throes of debating whether to build a modernized bridge connector between Detroit and Windsor, Ontario.

The Detroit metro is part of the largest bi-national trading corridor on earth, linking the U.S. and Canadian auto industries and other sectors with highly integrated, transport-dependent “just-in-time” supply chains. Thirty-five U.S. states count Canada as their largest export market, including every Great Lakes state.

More than a quarter of U.S.-Canadian trade flows through one single chokepoint: the Ambassador Bridge, built in 1929 to connect Detroit with Windsor. This is the largest exchange point--and commerce bottleneck--on the planet.

Recognizing the need for a new, better crossing, the U.S. and Canada, along with Michigan and Ontario, created the DRIC (Detroit River International Crossing) as part of a highly integrated multi-modal transportation plan, and a long overdue 21st Century overhaul, of this key crossing. The DRIC would yield long-run economic benefits by facilitating more trade and commerce through the region, and between our nations. It would be a particular boon for Detroit. If that battered metro is to be a serious force, rather than a bypassed backwater, in the global economy, it needs functional, efficient infrastructure at its international intersections.

This is what our global competitors understand. Shanghai, Singapore, Bangalore, London, Amsterdam and leading metro regions across the globe are putting in place spanking-new, highly functional infrastructure -- from bridges, to ports, to airports, to cyber/fiber, to high speed rail, that are catalysts for even greater economic growth, and also serve as markers that these metros are on the economic advance.

The DRIC is an expensive proposition, in total $3.75 billion dollars, but Michigan won’t have to pay a dime for it. The U.S. and Canadian governments will pay for the U.S.-side road and infrastructure, the span itself will be paid for by private investors who will be repaid by tolls, and the Canadians will pay for their side of the project.

A new report released by the Michigan Department of Transportation shows the new bridge, even accounting for a recent Great Recession-induced traffic drop-off, (which won’t last forever), will more than pay for itself through tolls within the next decades. In the short-term it is estimated to create $1.8 billion in investment to the Detroit-Windsor area, 10,000 sorely needed construction jobs, and another 30,000 indirect jobs locally.

The US wants it. Canada wants it, Detroit needs it. Even Ohio, for once, is rooting for Michigan. (The Ohio Legislature, passed a resolution saying, basically, “Michigan, please, please get this bridge done!”)

So what's the problem?

The Michigan Senate needs to pass the legislation that would enable the public-private partnership agreements with private investors for the construction of public infrastructure. (Other states and nations have used this system of finance for years, but it hasn’t been done before in Michigan). The House has passed the law already, and the governor is ready to sign it.  

But the owner of the Ambassador Bridge, a generous contributor to Michigan politicos, wants to build a second span for his bridge, and block the DRIC plan if at all possible. The Canadian government has said it won’t allow a second span to land in Windsor, but the owner could tie-up DRIC through lawsuits.

This is why it’s a bad idea to expect states to craft, by some invisible hand, a national, much less international, transportation strategy: they can’t be counted on to look beyond their immediate, often parochial interests and do what’s best for the nation as a whole, or even their own metros.

The DRIC could be a critical asset in our nation’s national export promotion, freight transportation, and overall economic strategy. The project represents a departure from the all-too-usual pork-barrel infrastructure “trough-feeding” that has been the norm in national transportation funding. DRIC was thoughtfully planned in partnership with Canada, and designed to tie into both community-based economic development efforts and regional/national multi-modal transportation plans.

So as Michigan’s state Senate makes it final call about whether to approve the public-private partnership agreement, it is worth considering that a second Ambassador span would be in some ways a bridge to the past--to an era when parochial interests dominated infrastructure decisions, when global trade and economic advantage was an afterthought. Detroit, Michigan, and frankly the whole Great Lakes and nation, need instead a bridge to the future, and right now that's the DRIC.