March 30, 2021
The Endeavour Programme has developed an artificial intelligence technology that can be applied to improve the performance of major projects.
- Throughout history, the construction industry has rapidly adopted ‘mechanical’ technology, but the management and design of projects is still dominated by humans using programmes such as excel, primavera and autocade
- An AI machine is like a mechanical mind. It uses billions of data points to predict the probable time and cost outcome of a project in ways that humans simply cannot do
- By gaining a greater understanding of this probable outcome, humans (AI machines don’t make choices!) can make more informed management decisions throughout the project lifecycle
- Used correctly, AI allows Governments to better understand the requirements of a project, and make better decisions on how it will allocate resources to match social need
- Important decisions now need to be made at the policy level. The data generated from infrastructure is valuable. Where Government has paid for the infrastructure, it should have open access to that data
March 15, 2021
Clare is an award-winning environmental expert and sustainability strategist.
- Although widely used, sustainability is a jargonistic word which is not immediately self-explanatory. ‘Wellbeing’ (social, indigenous, economic and environmental) is a term people can more closely relate to, measure and understand
- If the key project evaluation tools are economic (GDP contribution/IRR), the infrastructure delivered will prioritise these requirements (at the expense of broader long-term wellbeing)
- Government is responsible for setting the strategic wellbeing framework for large scale capital projects – the market then delivers to these standards. However, pressure from the business sector remains a key driver of business and government wellbeing practices
- The shift to a wellbeing (or sustainable) approach requires a top-down and bottom-up cultural shift. This can only be achieved through focused, structured and timely wellbeing training
February 18, 2021
Richard is the Global Head of Infrastructure at KPMG where he leads a team of nearly 3,000 people. Richard is an authority within the infrastructure industry.
- Infrastructure drives quality of life – society functions on the strength of its infrastructure
- Covid, and the rising societal awareness of climate change, is releasing the ability of Governments to be more radical than ever before
- Governments and the industry are facing three key challenges:
- How to prioritise investment
- How to leverage technology to improve delivery
- How to increase the long-term skills and resilience of the construction industry
- The quantum and speed of infrastructure funding required now outstrips the resources of Government – unlocking the trillions of dollars available from the private sector is a priority
- The energy (renewables) and transport (electrification, digital connectivity and automation) sectors are being transformed – the burning platform now exists to make wholesale changes to these markets
- Sustainability is a global issue – climate change cannot be isolated to a single industry or geography
January 18, 2021
Following the publication of “Know your options” Frank joined us to discuss what level of private sector participation a government can and should have in delivering long-term infrastructure projects.
- Although ‘Traditional’ models are compared to PPP, all models involve some level of private sector participation. This begs the question: What is the right level of participation for a specific project?
- To find the ‘optimal’ approach, Government must first agree and rank its objectives for a project. Common objectives often include the desire to transfer risk but deliver at the lowest possible cost – these are conflicting and need to be ranked to find an optimal solution
- The status quo must always be tested. External events (economic growth, Covid-19, new policy) result in constantly changing objectives for Government. The right level of private sector participation two years ago may not be the right level now
- Soft market testing can provide confidence in a new approach in a timely and efficient manner. For the cost of a coffee, potential issues with an approach can be identified early, and addressed before being released to the wider market
December 3, 2020
Following his excellent article ‘A 10 Point Public-Private Partnership Plan for National Economic Recovery in the USA’ (link in comments) David joined us to discuss the state of the infrastructure in the USA and how the acceleration of PPP programs can provide a solution.
- For decades, investment into new build infrastructure, or maintenance of existing infrastructure, has been deferred. This policy has created a modern-day infrastructure crisis in the US
- The level of investment now required is substantial, even within the context of the US economy
- Unless projects cross state boundaries (such as roads or bridges), the States control how infrastructure is procured. States operate autonomously in relation to State issues. Therefore, there are potentially 50 different approaches to how infrastructure is procured
- Taxation is central to the American psyche. Convincing the public or politicians to invest now and take the long-term social or economic view on payback is extremely challenging
- PPPs can be a solution to the crisis, but work is required to create a unified approach and provide investors with the confidence to enter this complex market
November 23, 2020
In this episode, we are joined by the team from Conexig to take an in-depth look at the infrastructure market in Latin America.
- Covid has significantly impacted economies across the region – with GDP expected to fall by 10% in 2020
- Across the region basic infrastructure is not fully developed. Although this creates a strong pipeline of opportunity, there are several sizable barriers preventing infrastructure delivery
- Politics dominates the infrastructure market with major international projects (such as Mexico International Airport which was in construction) being cancelled due to political pressure
- Corruption remains prevalent. The ongoing implications of Operação Lava Jato (commenced in March 2014) led to thousands of warrants and arrests across the region including Peru, Brazil, Colombia, Panama, and Mexico.
- The market is full of opportunities but it is both complicated and complex. Major international contractors have learned the hard way that local knowledge and insights are critical to success
November 9, 2020
This is the podcast version of our recent videocast https://youtu.be/EDnCJWurQIs
- We do not know where the bottom of the market is. However, we have seen upward curves in the US (Domestic) market, Europe (pre-lockdown), Mexico, Russia, and China. Private aviation is also performing strongly
- Consistency of Government policy in relation to travel bans, quarantine & pre-departure testing, and the economic recovery are all key to restarting the industry
- 2021 will be a turbulent year but we can expect to see:
- More airline failures
- Further staff reductions if conditions do not improve
- Asia leading the global economic recovery
- Airline fleets being righted size to reflect market conditions
- Potential opportunities for new entrants into specific markets
Recording date: 30 October 2020 (pre-second wave of lockdowns across Europe)
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October 20, 2020
The Economics of Infrastructure | Nigel Wilcock - Executive Director of the Institute of Economic Development and Managing Director of Mickledore
In today’s episode, we are joined by Nigel Wilcock to discuss the economics of infrastructure investment. This is a timely conversation as governments are increasingly turning to infrastructure to kick-start economic growth.
- The relationship between infrastructure and economic growth is clear – the economies of Rotterdam (Euro Ports), Dubai (Airport), or Lyon (TGV) would not have their global status without the infrastructure investment which has occurred
- No one single asset class will transform an economy – Government needs to examine where specific infrastructure is required (roads, rail, utilities, broadband, etc) and invest accordingly
- Governments, Developers, and Users (the ‘Three-Legged Stool’) all have different roles to play in the delivery of infrastructure – and this may change based on the nature of the asset being delivered
- Demand analysis is complex and extremely difficult to predict. Government policy, technology, or public sentiment all impact long-term demand for infrastructure. Accurately predicting demand is central to long term economic planning and success
September 23, 2020
Following his excellent article “RIP CBD. We’re coming home” (https://medium.com/@mattylawrence/rip-cbd-were-coming-home-2afe40f0c9ca), we discussed with Matty the future of the post-Covid CBD and the development of local business hubs:
- It is important to distinguish between the CBD and the City. CBDs will change but not necessarily at the expense of the City
- The need for central office space remains (for some the office is a crucial working environment) but the purpose of the office is likely to change – with an increased focus on social interaction, meetings and collaboration
- Space requirements are likely to decrease, placing pressure on landlords. Agents, tenants and landlords need to work together to develop flexible lease structures
- We are likely to see a significant growth of local business hubs, providing formal but flexible working facilities close to home
- There are significant opportunities for both the employer and employee. Employers can reduce accommodation costs and improve productivity and retention rates. Employees can take a hold of their lifestyle, be empowered to deliver their work effectively and interact more closely with their local community