Viewpoint: Facing the infrastructure cliff
By Rich Humphrey
Much has been said about the “fiscal cliff”, but the greater risk is the impending “infrastructure cliff” – the gap between the demand for infrastructure and the capabilities to fund and deliver our most critical infrastructure projects, the absence of which could result in dire consequences for public safety and economic growth.
However, considerable attention is being paid to innovations that can help close the infrastructure-funding gap. Methods that use private sector financing, such as public-private partnerships (PPPs) or Design-Build-Finance-Operate, are gaining popularity as a solution but will not solve the problem on their own. Among the obstacles to private investment are the risks inherent with infrastructure projects, like lengthy approval processes and errors in the field, which contribute to cost and schedule overruns. Moreover, private investors demand increased accountability, with higher expectations about project delivery and performance. Stakeholders are seeking the best outcomes possible, as soon as possible, to achieve the highest ROI.
The construction industry is at an inflection point. Infrastructure owners and their engineering consultants have fundamentally not changed how civil infrastructure projects are designed and delivered in many decades, and have seen essentially zero productivity gains in that same time period. At the 2012 CG/LA Global Infrastructure Leadership Forum presenters from McKinsey and Company singled out poor productivity as an important factor in eroding returns and making infrastructure less attractive for private investment and suggested a focus in this area to make the economic model more attractive to investors.
Building Information Modeling (BIM) is the obvious candidate for achieving dramatic gains in infrastructure sector productivity, with its ability to aggregate, organize, and analyze the enormous amounts of information related to infrastructure assets. BIM is an intelligent model-centric process that provides accurate, accessible, and actionable insight for all project stakeholders, helping to reduce risk and lower costs over the lifecycle.
When broadly applied throughout the infrastructure ecosystem (owners, engineering consultants, contractors, suppliers) BIM could close the gap in two ways: one, improving the industry’s ability to deliver and manage assets more cost-effectively with productivity, quality, and sustainability gains; and two, increasing the fundability of projects – providing investors with greater confidence in cost, delivery schedules and long term performance of infrastructure projects.
The approvals process provides a good case in point. Public engagement is vital to success, but the process can stall a project by years or decades. But if you can shrink the time to get projects approved and started, you’ve multiplied the number of projects that can get done and start paying off.
Consider these essential and substantial improvements over traditional methods:
Regulatory agencies need to understand and approve projects before they can be built. The approval process is slow and linear, often involving the review of 2D plans. But, by using web and mobile technologies to communicate, owners and consultants can take charge of the conversation from day one with a 3D model for review and comment from anywhere, at any time.
The ability an intelligent 3D model provides to simulate asset performance (such as traffic flow), simulate the construction process (build it virtually before you get on site), and experience the asset before it is real (e.g. drive the road virtually before it is built) all provide transparency about the project and improve predictability for potential investors.
Communicating with citizen groups or local businesses with 2D paper plans is not effective and can lead to confusion and frustration. Gaining public buy-in is easier when projects can be explored using realistic visualizations via web and mobile devices at the stakeholder’s leisure.
Easing the approvals process to get more projects in the pipeline is only one factor in an increasingly- complex landscape. The methods by which projects are delivered and assets are managed must undergo a fundamental change in order to meet critical objectives. Traditional ways of working are insufficient to meet the unrelenting need for new and rehabilitated infrastructure amid today’s economic realities. To avoid the “infrastructure cliff” the industry needs to apply the BIM process as a foundation for business process transformation enabled by technology.
Rich Humphrey is Senior Director of Industry Strategy & Development at Autodesk, Inc., focused on the Engineering, Natural Resources, & Infrastructure Industry.