World View : Global Spending Spree to Expand Roads, Rails : Trillions of dollars are budgeted for public works over several years, promising vast changes in how things work.

By PATRICK LEE

Dec. 22, 1992 12 AM PT

TIMES STAFF WRITER

There is no road so level as to have no rough places, Cervantes wrote.

Some four centuries later, it appears that government leaders from Topeka to Tokyo are agreeing. Those leaders have announced plans to spend trillions of dollars over the next several years to refurbish roads and bridges, lay tracks for high-speed trains, finance new communications networks and modernize airports.

President-elect Bill Clinton promises to “rebuild America.”

If all those plans are carried out, it will mean a burst of public works spending that one economic historian compares with the initial building of the railroads, or the electrification of the countryside.

Aside from invigorating limping economies, eliminating traffic jams and collapsing bridges, this surge in public works projects may change the global landscape. In Europe, for example, new high-speed rail networks promise to tie together the whole continent in a manner comparable to the U.S. interstate highway system, said Lowell Christy, a senior fellow at the Economic Strategy Institute in Washington.

The buzzword for all the new programs is “infrastructure investment”--spending on the basic facilities and installations that, like muscles and arteries in the human body, enable communities and nations to function in modern society.

“Infrastructure is the growth market of the future,” said Christy.

Among specific spending plans:

* Japan has already embarked on an ambitious program to pump $3.2 trillion into public works during the current decade--one of the most spectacular infusions of money ever.

* Meeting in Edinburgh for their semi-annual summit a few days ago, leaders of the 12 European Community countries approved a two-pronged package of public works spending that EC officials estimated would mean an extra $37 billion in continental infrastructure spending during the next few years, beyond what individual governments and private enterprises would otherwise spend.

* Germany is expected to spend more than $1 trillion during the ‘90s to rebuild the former Communist east. Although a large chunk of this will go toward job subsidies and other social benefits, much of the rest is for modernizing and expanding the area’s road, rail, waterways and telecommunications networks. The largest single chunk is $325 billion earmarked for transportaton improvements that extend to western Germany as well.

* In the United States, a cornerstone of Clinton’s economic recovery program is to boost spending by $20 billion a year over the next four years for roads and bridges, a new telecommunications network, environmental technologies and conversion of defense facilities for civilian production. That would be on top of a six-year, $151-billion transportation program passed by Congress last year to finance new mass-transit systems and repair roads and bridges.

* The countries of East and Southeast Asia say they will spend $600 billion on infrastructure over the next several years. And the former Soviet satellite nations of Eastern and Central Europe have already gotten hundreds of millions of dollars in Western loans to begin modernizing their communication, transportation and other basic systems.

The reasons for these spending plans vary from country to country. In some cases, the motive is no more complicated than that existing systems are worn out or behind the times. Despite its international competitiveness and economic dominance, for example, Japan has infrastructure that possibly ranks as among the worst in the highly industrialized world: cheap, old and insufficient housing stock; inadequate sewage systems; overcrowded airports. It’s mostly two-lane road system is so congested that the two-hour drive from Tokyo to Matsumoto can stretch to eight hours during traffic peaks.

“Everyone knows Japan is a rich economy, but in the provision of infrastructure, it still leaves a lot to be desired,” said Graeme McDonald, an analyst with James Capel & Co. in Tokyo.

The bulk of the highway spending in Germany at present is concentrated in the east, repairing and upgrading long stretches of autobahn and secondary highways that have been largely neglected through four decades of Communist rule.

The short, sharp exits and on-ramps that characterized much of the eastern highway network--adequate for the slow-moving East German Trabants--generated a string of accidents after unification, when traffic accelerated to Western speeds. Of the 8,000 autobahn bridges in the former East Germany, roughly 5,000 were regarded as unsafe on the day the two Germanys unified.

In New York during a seven-week period in 1989, underground steam pipes exploded in three separate incidents, showering streets with cancer-causing asbestos and killing three. Meanwhile, in Chicago last spring, river water surged into aging subterranean service tunnels, flooding 200 downtown buildings and shutting down the Loop for days.

The stories go on and on, as do assessments of the cost of such decay to world economies, many of which are already reeling from recession.

Economist David Alan Aschauer has argued that reduced U.S. public works spending over the last 25 years has played a central role in the nation’s low productivity growth, depressed corporate profits and sluggish private investment.

In Britain, traffic congestion costs British companies about $30 billion a year, according to a report issued earlier this month by the Confederation of British Industry.

But these new public works programs often have broader political and economic goals as well.

Japan, for example, has pledged to boost its spending on infrastructure in connection with the so-called Structural Impediments Initiative trade talks with the United States. In addition to possibly generating export business for U.S. firms, such spending in Japan is meant to give enough of a boost to the economy that it increases domestic demand for products that might otherwise be exported to trading partners such as the United States, which is irritated over trade imbalances.

In Europe, new infrastructure is seen as a means to speed economic unity. The EC’s programs, for example, are to be managed by the European Investment Bank, a Luxembourg-based institution that provides loans and loan guarantees for “trans-European” public works projects such as improved air traffic control systems or the tunnel being built under the English Channel between France and Britain.

In the United States, public works spending redresses past neglect and boosts competitiveness.

Everywhere, it seems, public works programs are viewed as a quick and effective tonic to create new jobs and spur investment at a time of widespread economic stagnation. Also, nations with the most advanced transportation and communications systems--with the most accessible harbors and airports, speediest rail systems and best highways--stand to gain the most from growing international trade.

Technology is another factor.

Robert Heilbroner, an economic historian at the New School for Social Research in New York, talks about change that “pushes out what the economists call the ‘production possibility frontier,’ or what you can do. They change the map. . . . And then growth really takes on a sort of wonderful dynamic.”

In the United States, he adds, such growth occurred during the building of canals in the 1820s, then when transcontinental railroads were built in the 1880s, then again when rural areas were electrified in the early 20th Century. This time around, he says, the infrastructure spending is occurring in part to adopt new high-speed rail or electronic telecommunication technologies.

The 1950s-era, U.S. interstate highway system is a particular concern due to inadequate spending on maintenance through many years, according to Heilbroner. “The (other industrialized) countries never allowed themselves to let their infrastructure fall into disrepair,” he said. “The roadbed on which the economy rolls is much better abroad than here. So we have a very big catch-up job here.”

But there are obstacles to new public works projects: fears of exacerbating national deficits, bureaucratic foot-dragging, construction delays and citizen protests.

In Germany, the combination of increased traffic generated by the fall of Eastern European travel restrictions and the growing number of construction sites increasingly has turned Germany’s much-loved pastime of long-distance driving into a nightmare.

Work on the main arterials connecting Berlin with areas to the west began two years ago and generated chaos. Last summer, construction along the Nuremberg-Berlin autobahn generated traffic backups of eight miles or longer on 13 different occasions.

The $130-billion plan to upgrade eastern Germany’s neglected rail net is in part geared to easing pressure on highway traffic, where a seemingly endless line of trucks now renders the right lane of main autobahns useless for other traffic.

Transportation Ministry spokesman Gert-Juergen Scholz calls eastern Germany’s railroad system “Europe’s biggest construction site.”

Taiwanese officials had a different concern this summer when they put a leash on a proposed six-year, $303-billion infrastructure plan, fearing that the program would divert money from other sectors of the nation’s economy or increase levels of debt. The program’s spending is now subject to annual budget reviews.

Around Brussels, numerous bridges and highway intersections were built in the 1970s as part of a planned system of urban superhighways. But then the city decided on environmental grounds not to build the highways, leaving behind a series of bridges to nowhere and junctions that do not join anything.

And in Britain, despite the fact that road-building is years behind demand, environmental concerns mean that any new superhighway proposal is held up for years before ubiquitous planning boards.

“Nobody ever wants a motorway running through their back yard,” said a Transport Department official. “Often local groups have the power to stop construction.”

The rail link between London and the Channel Tunnel is another case in point. The government has been backing and filling on the location of a high-speed rail line, and only a tentative decision has been reached on a route that pleases no one.

British Rail officials admit that a new rail line won’t be laid down until the 21st Century--even though the French side of the channel will have ultra-high-speed trains to provide what was meant to be fast service between London and Paris.

There’s also no guarantee that new infrastructure projects will turn out the way they were planned. Consider, for example, the case of the Tokyo Bay bridge.

The new bridge was meant to attract more business, tourism and residents. But somehow, it wound up about 10 feet lower than it should have been. As a result, one of the ocean liners the redevelopment was meant to attract--the Queen Elizabeth II--can’t pass under it.

The story recalls another old saying--the one about the paving material on the road to hell.

This story was reported by Joel Havemann in Brussels, Patrick Lee in Los Angeles, Tyler Marshall in Berlin, Janet Stobart in Rome, Rone Tempest and Sarah White in Paris, William Tuohy in London and Teresa Watanabe in Tokyo. It was written by Lee.

What $100 Million Can Buy

Shopping for some infrastructure on a budget? Here’s what you can get:

1) 10 miles of a six-lane interstate

2) One mile of the Century Freeway in Los Angeles

3) 10 miles of subway

4) 67 miles of commuter rail

5) 50 Amtrak passenger cars

6) One-tenth of Pittsburgh’s new airport

7) 10 telephone switching stations, each serving 50,000 to 100,000 people. NOTE: Figures are approximate and vary by U.S. region and project design. SOURCES: Construction industry spokesman; Times staff and wire reports

Measuring Up

Despite its economic might, Japan ranks relatively low on several measures of infrastructure.

ROADS

% of roads paved

Japan: 65.4%

U.S.: 90

Britain: 100

Germany: 99 SEWERS

% of homes connected to sewers

Japan: 44%

U.S.: 73

Britain: 96