Australia is about to embark on one of the biggest infrastructure spends in its history.
State governments and delivery authorities are planning to deliver over $50 billion within the next few decades on major infrastructure projects across the country.
In 2008/09, enormous global turmoil was created as a consequence of the Global Financial Crisis. This adversely impacted many major infrastructure projects as a direct result of rising construction costs and reduced budgets.
This occurrence in the market created a compelling platform for change which drove major structural changes in how infrastructure projects were implemented.
Lessons from the UK
In the UK, the government invited a panel of experts to develop and implement a framework called the Project Initiation Routemap to ensure it successfully delivered its multi-billion pound infrastructure program.
Recessions force people to think differently and this is what saved some of the UK’s biggest infrastructure projects from falling off the rails or being deferred. Industries in the UK now understand that lessons from a crisis can be used to good effect.
Australian and global markets are moving into uncertain times and need reinvention to ensure the success of major projects.
Project Initiation Routemap – a framework for success
The Routemap streamlined the construction process and thereby made it significantly more efficient. The fundamental principles are still relevant today - clients are still seeking more control, transparency, certainty of outcomes and are more informed as a direct result of access to advanced knowledge and data.
Three key tenets were identified to ensure the success of infrastructure projects: assess complexity, access capability and align these two areas.
A set of 12 factors were identified in the framework to assess complexity. These include interfaces, dependencies and extent of change. Early understanding of the complexity of the project, and reflection on its overall delivery, are essential for successful outcomes.
The Routemap also provides an objective means to assess the capability of the sponsor, client, asset manager and market. It enables users to identify capability gaps specific to the project or program as well as identify issues that will impede its success.
The alignment for success modules combine both complexity and capability. They review areas such as procurement, organisational design, execution strategy, governance and requirements.
Crossrail program accelerates with Routemap
The Routemap framework was implemented for several billion pound projects with excellent outcomes. The team implemented program and delivery management services for the £14.8 billion Crossrail program, which included 21 kilometres of new twin bore tunnelling and nine sub-surface stations. This project will span a decade.
The Routemap process identified potential program savings totalling £1 billion. The team led the delivery of the integrated baseline review involving the co-ordination of over 200 projects across all program stakeholders. They enabled the safe delivery of the overall program which was within budget and on time. The project has achieved full government backing and is fully funded.
A new approach is adopted by Anglican Water
Anglican Water is the biggest water provider in the UK and is valued at £4.5 billion. Between 2000 and 2015, the company undertook major capital programmes valued at over £5 billion that included 4,000 separate projects. These covered the full range of water and waste treatment and distribution as well as sewerage projects which ranged from £50,000 to over £1 billion.
The company had a mandate to focus on affordability. During the recession, when money was tight, it realized a new approach was necessary to successfully deliver its billion pound infrastructure program. In the last decade, it implemented foundational principles from the Routemap process on several projects which helped successfully drive a 30 per cent improvement in cost performance. The company adopted an intelligent alliancing model and collaborated with the supply chain to gain a strong cost performance across its business.
Think differently to reach greater levels
Infrastructure projects are sizeable and complex within a live environment. The UK went through the hardship of a recession that created a burning platform to do things differently and more efficiently.
As the mining downturn continues to put pressure on our Australian economy, there is an opportunity to tackle productivity which has been a thorn in the side of the construction industry.
Now is the time for government and industry to capitalise on these opportunities and ensure the $50 billion that will be spent on infrastructure is efficient and effective.