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Constructing tomorrow’s infrastructure
The document discusses the key challenges and solutions in constructing smart infrastructure, highlighting weaknesses in project prioritization and the need for resilient design and lifecycle performance. It emphasizes the importance of strategic management, innovation in financing, and post-disaster frameworks to enhance urban resilience. A new infrastructure paradigm focusing on consolidation and multi-infrastructure frameworks is proposed to address these issues effectively.
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Constructing tomorrow’s infrastructure
- 1. Constructing Tomorrow’s Infrastructure BobPrieto September 14, 2015 The Global Forum on Urban and Regional Resilience Next Generation of SMART Infrastructure
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- 4. Framing the Problem Project prioritization methodologies are weak Two out of three large projects “fail” Construction productivity unchanged Barriers to improved delivery persist Time is not valued Assets are not well or consistently maintained Life cycle performance not a guiding principle Resilience to respond to a changing future lacking Post disaster environment not provided for Systemic innovation absent
- 6. Financing the Problem Fundingand Financing confused Tax exempt debt preference limits capital Disparity of covenants Tax policy does not reward longest term ownership Federal tools good but not sufficient Secondary markets immature Post disaster funding requires building back better
- 8. Fixing the Problem Robuststandard on infrastructure prioritization – Outcomes focused vision – Consistent methodology • Doing the right things • Doing enough of the right things • Doing right things right – Classes of factors to be considered – Portfolio approach • Maintenance • Productivity • Growth • Innovation
- 9. Fixing the Problem StrategicManagement – Strengthened Foundations • Owner’s readiness not just project readiness • Optimism bias addressed by reference class forecasting • Realistic risk registers, models and modeling White space risk; fat tail distributions; assumption migration; constraint coupling • Recognize, address and measure complexity – New theory of large complex projects • Semi-permeable boundary; emergent outcomes • Focus on Flows – transformational, influencing, induced • Engage, not manage - Sentries, scouts, ambassadors – Decouple by minimizing precedences – Contingency management
- 11. Fixing the Problem Buildfor the lifecycle – BODX – Expanded Basis of Design (BOD) • CBOD – design to build • O&MBOD – design to operate, maintain and replace – Life cycle performance based standards – Manufacture vs construct • Standardize, optimize, automate, build lean Nuts & bolts; 3rd Gen modules; knowledge assemblies – Optionality as a resilience strategy
- 12. Fixing the Problem Removethe handcuffs – Facilitate contractual innovation • Federal $$$ = No preclusions by law or regulation – Facilitate means, methods, materials innovations • SAFETY Act equivalent Value time – Include escalation and cost of schedule risk in all estimates and budgets • Include economic value of time – revenues, costs • Life cycle view – One stop permitting process for critical infrastructure • Limit period for filing lawsuits – Consolidate procurement steps – Recognize the true cost of disruption
- 13. Fixing the Problem Postdisaster construction framework changed – Labor, materials, equipment – Logistics – Damaged construction infrastructure – Extensive temporary works – Overwhelmed regulatory and administrative agencies – Changed contracting frameworks – Good Samaritan challenges – Bonding requirements – Evolving codes and standards
- 15. Fixing the Problem Encourageindustry consolidation and global leadership – Horizontal and vertical • Competition of supply chains • Essential for systemic innovation – Supportive international tax policy • Personal and business
- 16. Fixing the Problem Newfinancial construct – Eliminate tax exempt infrastructure financing • Opens broader capital markets (pension funds) – Reward long term infrastructure investment • Reduced capital gains on 15 year or longer investments – Create a subordinated debt infrastructure bank with public and private shareholders – Require life cycle maintenance and debt service coverage ratio covenants • Funding mechanisms must be pre-established to support
- 18. Fixing the Problem Postdisaster requires improving resilience of urban environments – Government funding and insurance typically focused on in kind restoration – Pre-existing long term plans required to provide context and minimize delayed decision making – Improvements must carry a life cycle covenant
- 19. Fixing the Problem New infrastructure paradigm – Consolidate • Multi-infrastructure framework required ROW as an increasingly valuable asset – Prioritize • Security/ Resilience • Discretionary • System Enhancements • State of Good Repair – Manage • Enterprise or portfolio management approaches – Improve • Incentivize R&D and provide liability protection for initial deployments of innovations – Monetize • What is the value of the nation’s infrastructure assets? Trillion $$$ example • Create secondary financial markets
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