Capital Project vs. Infrastructure

 

Courtesy: Alvarez & Marsal (A&M)

The term Capital Projects emphasizes on the monetary structure and investment cycle with a project; rather than technical or engineering contents or processing. Let's have a look, then to land on a conclusion..

The City of Portland - Oregon describes the Capital project as:

A Capital Project is a project that helps maintain or improve a City asset, often called infrastructure. To be included in the Capital Budget, a project must meet ONE of the following requirements (criteria):

• It is a new construction, expansion, renovation, or replacement project for an existing facility or facilities. The project must have a total cost of at least $10,000 over the life of the project. Project costs can include the cost of land, engineering, architectural planning, and contract services needed to complete the project.    
• It is a purchase of major equipment (assets) costing $50,000 or more with a useful life of at least 10 years.        
• It is a major maintenance or rehabilitation project for existing facilities with a cost of $10,000 or more and an economic life of at least 10 years.

While the Commonwealth of Virginia, a capital project is currently defined as one that creates at least 5,000 gross square feet of building space, or exceeds $3 million in total project cost. Below these thresholds, a project may be treated as a non-capital project or an operating expense.

Investopedia states that Infrastructure means:

The term infrastructure refers to the basic physical systems of a business, region, or nation. These systems tend to be capital intensive and high-cost investments, and are vital to a country's economic development and prosperity. In economic terms, infrastructure often involves the production of public goods or production processes that support natural monopolies. Examples of infrastructure include transportation systems, communication networks, sewage, water, and electric systems. Projects related to infrastructure improvements may be funded publicly, privately, or through public-private partnerships.

Aditya Ramamurthy - Hazen and Sawyer

Cambridge Dictionary defines the Capital Projects as:

a large and expensive project to build or improve a capital asset such as a Factory, Power Plant, Bridge, etc.

IBM designed a management flowchart of Capital project, as:

The capital project management overview flowchart describes the high-level overview of the capital project management process as delivered by the TRIRIGA® application. The first phase identifies the capital project management setup. The second phase identifies the creation of capital projects. The third phase identifies the planning of capital projects. The fourth phase identifies the procurement for capital projects. The fifth phase identifies the authorization and execution of capital project work. The sixth phase identifies the closeout of completed capital projects.

Nicholas Papayanis and Rosemary Wakeman at encyclopedia.com define the Urban Infrastructure may include any and all public services, the essential elements of the urban infrastructure during the nineteenth century, the formative period of the modern city, consist of new streets and boulevards, mass transit, new sewage systems, and the provision of gas, water, and electricity.

Yet, I believe that Capital Projects are considerably and practically different from Urban Infrastructure projects for the followings:

• The Capital Projects are those projects that are ruled by benefits and ROI; which necessarily based on investments and opportunities.
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• The Urban Infrastructure are the necessary and critical utilities to make homes habitable and livable; so are the cities.
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• The Capital Projects are not cordially related to specific location or community, but determined by chain of supply, logistics and distribution.
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• It is not deniable that some Capital Projects had triggered the creation of some cities and enabled growth and prosperity of others.
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• Initiating the Urban Infrastructure as Capital Projects will increase the cost of living and jeopardize the prosperity and social balance.
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• City is not an arena for investment and money making opportunity, yet it host the persons who are indispensable for wealth creation..