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Unlocking the benefits of infrastructure investment

Valencia, Spain

Unlocking the benefits of infrastructure investment

Valencia, Spain

Infrastructure has a role to play in helping the economy recover from coronavirus. Given the scale of disruption, we have an obligation to see taxpayer funds used as effectively as possible.

In times of crisis, government often turns to infrastructure to stimulate economic recovery. Throughout 2020 – a year of constant crisis – infrastructure investment was again recognised as a way of maintaining economic activity and protecting jobs. This led to governments across the world, increasing spend on existing projects and finding additional funds to bring new projects to market sooner.

Importantly, throughout the pandemic, project staff were classified as essential workers enabling the design and construction of major transit projects to continue at pace. Together, these factors managed to shore up sector confidence, protect jobs and soften the financial impact of lockdowns.

But success throughout 2020 served to highlight and, in many cases, exacerbate, pre-pandemic challenges relating to shortages of talent and materials, risk imbalances and pipeline uncertainty. All these factors contribute to cost overruns, project delays and capacity concerns.

Encouragingly, there has been a return to more collaborative, alliance-style contracting models in many jurisdictions, perhaps a recognition of their effectiveness in procuring most of the mega metro and transit projects. That said, the transit industry thrives on certainty, and there is at present a lack of it across three main areas:

Certainty of delivery model: considering the length of time mega projects take to be scoped and procured providing certainty to the industry about the commercial model is likely to create more competitive interest from the market and a better outcome for the taxpayer

Certainty of timing: enhanced pipeline visibility allows better resource planning

Certainty of design: a detailed and rigorous reference design can help respondents better understand and manage risks that they are expected to own

With more certainty – projects can be delivered with more confidence. Collaboration is the key

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