This week I joined the Institution of Civil Engineers (ICE)to talk about the evolving landscape in the infrastructure sector and the need to focus on lifting productivity.
The key takeaways for me were the need to evolve delivery models in the sector to focus on longer-term collaborative relationships between clients and their supply chain, the potential inertia that has built around industrial relations and productivity enhancements and the reinforcement that these challenges are global so we need to on the basics around project management and cost control, improve outcome definition and ensure it defines scope, pursue contract reform/efficiency and use digital tools to improve decision-making.
The timing of the event, on the eve of the release of Infrastructure Australia's next Market Capacity report, could not have been better.
The Market Capacity reform - now in its third year - points to the plateauing of demand with the previously forecast peaks beyond the capacity of the market to deliver without cost escalation. The plateau is the hidden story in the report with a lower peak and a longer tail meaning constraints will persist and therefore lifting long-term productivity is crucial.
The report also pointed to project-level cost increases having wider causes than input cost escalation. On the 20 largest projects geotechnical issues accounted for '+$2 billion average cost change', $960 million because of revised cost estimates, $320 million on scope change and $170 million on scope expansion.
#infrastructure #productivity
