A WORD FROM INFRASTRUCTURE AUSTRALIA

EARLY ACTION, ADAPTABILITY AND NEW SERVICE MODELS:

HOW COVID-19 IS SHAPING INFRASTRUCTURE USE

by Romilly Madew AO FTSE, CEO, Infrastructure Australia

Infrastructure Australia has released its findings from research into how the COVID-19 pandemic is changing the way Australians use infrastructure, the impact on long-term planning and development, and the key trends that have emerged.

As the COVID-19 pandemic spread, Australia's governments took early action, introducing travel bans, lockdowns and border controls, and supporting domestic supply chains. Communities adopted social distancing and moved to working from home.

While these early measures successfully contained national case numbers, they prompted profound changes to the way people moved, consumed and worked, which changed patterns of infrastructure use.

The continuation of infrastructure construction across major projects was a key source of economic activity and employment at the height of the COVID-19 pandemic in Australia. However, months of lockdowns, social distancing and working from home has driven sweeping changes in how Australians use critical infrastructure.

Although the pandemic put our infrastructure to the test over the past year, Australia’s governments and infrastructure providers navigated dramatic changes to community behaviour and network requirements, and rapidly adjusted their service provision across the transport, telecommunications, digital, energy, water, waste and social sectors.

Infrastructure Australia’s new report, Infrastructure Beyond COVID 19: A national study on the impacts of the pandemic on Australia, found that compared with other OECD countries, our infrastructure networks have proven to be resilient under pressure and open to innovation.

Developed in collaboration with L.E.K. Consulting, our report presents a moment-in-time snapshot of how the pandemic has changed the way we use infrastructure, and considers which of these changes could have lasting impacts on how we plan, fund and deliver the services we all rely on.

It finds that while COVID-19 has put a pause on the traditional driver of infrastructure – Net Overseas Migration – the pace of change in the sector has generally increased, with new emerging trends.

Major shifts in how Australians work, travel and consume goods and services in the wake of COVID-19 has driven the redistribution of existing demand, mode or channel switches, and acceleration of longer-term trends that were already underway.

A RAPID SHIFT TO DIGITAL SERVICE DELIVERY

We estimate that around four million Australians have been working from home since March 2020, representing 30 per cent of the total workforce. Our report found that a third of those people would like to continue doing so at least once a week, suggesting a permanent move towards a hybrid structure that will see a split of working time between the office and home – with significant impacts for infrastructure use.

Add to this 17.2 million telehealth consults between March and June 2020, teaching curricula and students moving online, and countless Zoom meetings, the past year has been characterised by a rapid shift from physical to virtual interaction with our health and safety front of mind.

Not surprisingly, this put significant strain on our broadband networks, with spikes in NBN bandwidth congestion growing to an average 60 minutes per week per

service at the height of the lockdowns in March 2020, and increased instances of customer complaints – particularly from small to medium-sized businesses.

The impact of large-scale remote working led to a surge in usage, with telecommunication providers responding by leveraging extra capacity in the network.

Latent broadband capacity was released to cope with the surge in demand – an example of responsive repurposing of infrastructure and assets that speaks to the resilience and adaptability of the network.

However, some suburban areas experienced network outages, and many regional Australians experienced internet access issues during lockdown restrictions, impacting their ability to work from home or undertake schooling remotely.

Working from home also catalysed a rapid uptake of digital collaboration tools – accelerating developing trends and triggering investment in cloud-based systems and cyber security.

Australians also accelerated their move to online retail channels and digital services, resulting in a substantial uplift in online sales and increased broadband network congestion.

The pandemic drove a 100 per cent growth in monthly online retail, five times the annual growth recorded in 2019, resulting in a growth in parcel delivery and micro-freight.

RENEWED VIBRANCY IN REGIONAL AREAS

As a result of social distancing and work from home opportunities, some households embraced the opportunity to move away from dense metro areas, resulting in a 200 per cent increase in net migration from capital cities to regional areas. This caused an immediate increase in capital city vacancies, while rental demand increased in regional and coastal towns including Newcastle, Wollongong and the Sunshine Coast.

Some regions are also seeing a local boom of regional tourism and population growth, and are experiencing less severe COVID-19 impacts. Strengthened regional cities, huband-spoke service models, and improvements to liveability and affordability can refocus regional investment.

The longevity of these changes is uncertain, however the impacts are likely to persist for some time as Australians continue to seek more affordable housing outside of the inner metro areas. If this trend continues, we could see reduced demand for urban transport and increased pressure on broadband networks in regional centres.

RECOGNISING THE VALUE OF PARKS AND RECREATION

In 2020, Australians have evidently cherished greenspaces, both in metro areas and national parks.

There has been a 23 per cent increase in our use of national parks and greenspaces nationally. Research also shows that 87 per cent of Australians have noticed a positive shift in community attitudes towards urban green space, particularly amongst those living in high-density areas.

In a survey conducted by the NSW Department of Planning, Industry & Environment, 46 per cent of respondents claimed to have spent more time in parklands and gardens with many (94 per cent) using these spaces to undertake personal exercise.

Further, 72 per cent of NSW survey respondents cited that local parks have been ‘especially useful’ or ‘appreciated more’ during COVID-19, with Hermitage Foreshore, Western Sydney Parklands and Centennial Park visits up by around 144 per cent and around 100 per cent respectively compared to the previous year.

Generally, increased local activity including intense use of local greenspace could lead to reduced demand on toll roads. Policy reforms and programs supporting access and uptake could drive even greater sustainability.

MAPPING THE LONG-TERM IMPACTS ON PUBLIC TRANSPORT USE

Across the country, public transport providers moved quickly to support social distancing and hygiene measures, making improvements such as increased cleaning, and applying real-time occupancy data to public transport in line with social distancing initiatives.

However, in a reversal to the earlier trend of increasing public transport use, patronage in most cities fell to 10–30 per cent of normal levels in the initial lockdown and settled at a ‘new norm’ of 60–70 per cent of pre-COVID-19 levels. Traffic levels rebounded quickly, along with an uplift in second-hand car purchases, potentially indicating that higher car mode share may persist for some time.

A key focus for government and industry in 2021 will be to understand the structural impacts of COVID-19 on travel demand within Australia.

Together with the Bureau of Infrastructure and Transport Research Economics, Infrastructure Australia has convened a COVID-19 Cross-jurisdiction Roundtable to facilitate the exchange of ideas, techniques and tools for considering the long-term impacts of COVID-19 in travel demand models.

Taking a collaborative approach, we are working with industry, sector experts and thought leaders across government to understand how COVID-19 has changed the way we use infrastructure.

This will inform the Australian Infrastructure Plan, a major reform document that will provide a roadmap for the infrastructure sector to support recovery from the impacts of the pandemic, due for release in mid-2021.

DO WE NEED PRIVATE INVESTMENT TO FUND RECOVERY?

by Marie Lam-Frendo, CEO, Global Infrastructure Hub

As stimulus spending ramps up, a ten-year trend study shows private investment in new infrastructure has declined since 2010.

Infrastructure is the backbone of developed and emerging economies worldwide. Yet, even as many countries turn to infrastructure stimulus to help drive COVID-19 recovery, the $15 trillion global infrastructure financing gap stands as a stark reminder of what the public sector has not been able to achieve alone.

The latest Global Infrastructure Hub (GI Hub) report, Infrastructure Monitor 2020, shows declining private sector investment in new infrastructure, despite the appealing riskreturn profile of infrastructure investments. Private investment in infrastructure through primary market transactions is only about US$100 billion per year, down from US$156 billion in 2010. This figure is a drop in the ocean compared to the US$15 trillion global infrastructure financing gap that the GI Hub calculated in 2017 based on projections to 2040.

Currently, the industry is taking a hard look at its objectives and practices in light of what the pandemic has taught us about the role infrastructure plays in inclusivity, resilience and other essential aspects of society. This presents a unique opportunity for the public and private sectors to build on their alignment of purpose to increase investment and close, together, the financing gap.

GATHERING MOMENTUM AROUND SOCIAL IMPACTS

A 2019 Global Infrastructure Investor survey by GI Hub revealed that 97 per cent of investors now believe environmental, social and governance (ESG) factors are important considerations in infrastructure investment decisions, an increase from 86 per cent in 2016.

This widespread recognition by infrastructure fund managers, lenders and investors appears only to have strengthened since the global pandemic. There is a distinct shift in emphasis from viewing ESG factors as useful considerations to seeing them as future-focused must-haves. This can only work in infrastructure’s favour for attracting private investment. SOME CHALLENGES REMAIN IN ATTRACTING PRIVATE INVESTORS

There are a few reasons why investors are looking the other way when it comes to investing in infrastructure. Firstly, there are limited opportunities for investment as the number of public-private partnerships (PPPs) shrinks globally. Infrastructure Monitor showed that private participation in PPP projects has gradually declined as a share of private infrastructure investment – falling from 36 per cent in 2010 to 28 per cent in 2019. There is also a shortage of bankable projects and fewer privatisations coming to market.

Secondly, risk-adjusted returns have become less attractive over the last decade with returns dropping due to serious competition among providers. The risk of infrastructure projects for investors is perceived to be high, particularly if the private sector is being asked to carry the burden of excessive risk. This perception is challenged by Infrastructure Monitor, as it found that infrastructure loans on average perform like an investment grade security by year ten in high-income countries, and by year 14 in middle and low-income countries, and even faster in PPPs.

From a performance perspective, our industry can raise awareness that infrastructure does not perform like other asset classes in having increasing default rates over time. And increasingly, we have the data to show this. In addition to the composite view provided in our Monitor 2020 report, there are the annual Moody’s publication of default and recovery rates of over 7,000 projects, and the EDHECinfra infra300 index of how unlisted infrastructure performs. The data is clear that once through the initial higher-risk phase (i.e. construction), infrastructure that is contracted or regulated by the state generally provides long-term, predictable and stable yields.

This finding is a clear signal to the world that infrastructure is a safe environment to play in, and the time is ripe for private investors to move away from focusing only on high-yield investment. By investing in infrastructure, the private sector

can diversify its portfolio, have a longer retainer and have a social license to play.

Lastly, the industry can break barriers to private investment by understanding how the public sector can be a deterrent to private investment. Capital charges associated with infrastructure investment can push investors towards other asset classes, and low interest rates make investment by the state more attractive and affordable.

FINDING A WAY FORWARD

As part of our work for the G20, the GI Hub recently conducted a market scan to understand the key challenges to mobilising private capital. We spoke to more than 40 investors, policymakers and market experts globally and identified three primary actions associated with attracting investment into infrastructure.

1. Ensure the availability of programmatic pipelines

Governments need to develop a clear vision for their infrastructure development agenda and goals. Without the required clarity, they will not be able to develop a robust and properly prioritised pipeline of projects. A good example of an infrastructure project pipeline is the online Mexico Project Hub. Launched in 2017, the pipeline aims to accelerate private investment in Mexican infrastructure development. The first of its kind in the world, it has quickly strengthened Mexico’s ability to fund multiple large projects across the nation.

2. Navigate regulatory, political and economic uncertainty

Infrastructure development is often politically complex, requiring the approval of multiple, diverse and sometimes competing stakeholder groups. Misaligned interests can inhibit projects. Therefore, governments need to create the proper regulatory frameworks and economically robust environments if they are to nurture trust in their infrastructure programs.

One government that succeeded in this is Azerbaijan. Our InfraCompass, which quantifies the strength of countries' enabling environments, found it had the most improved regulatory framework of any InfraCompass 2020 country. In 2018, Azerbaijan made resolving insolvency easier by making insolvency proceedings more accessible for creditors and granting them greater participation in the proceedings, improving provisions on the treatment of contracts during insolvency and introducing the possibility to obtain postcommencement financing. Then, in 2019, Azerbaijan made resolving insolvency even easier by providing for the avoidance of preferential transactions (transfers or payments made to unsecured creditors that result in a creditor receiving a preference over the remaining unsecured creditors at a time when the debtor was insolvent).

3. Develop projects with attractive risk-weighted return profiles

Governments can keep in mind two key principles in the creation of their programs and projects: value creation (ensuring all projects have strong revenue potential) and value capture (ensuring key risks are mitigated and projects are appropriately financed to secure profitability). Projects that do not include plans for the fair and equitable generation and distribution of revenue will struggle to attract willing investors.

Activating private capital is key to closing the global infrastructure financing gap. The industry currently has an opportunity to explore investment options and create stronger partnerships between the public and private sectors, helping drive economic recovery in the short term while also driving longer-term economic and social outcomes.

About Global Infrastructure Hub

The Global Infrastructure Hub (GI Hub) supports the G20 to drive an ambitious agenda on sustainable, resilient and inclusive infrastructure through action-oriented programs. Based in Sydney, Australia and Toronto, Canada, the GI Hub team provides data, insights and best practice to create a common language on infrastructure. Strategic partnership is at the core of what the GI Hub delivers through events, thought leadership and tools. It is the G20’s only dedicated infrastructure entity. Find out more and engage with the Hub at www.gihub.org.

FIXED AND PORTABLE INTERNET FOR REMOTE INFRASTRUCTURE PROJECTS

Reliable, business-grade internet is critical to the ongoing operations of infrastructure projects. The necessity of connectivity for continued operation is just as pressing for permanent, fixed sites as it is for temporary, field sites.

The increasing adoption of remote monitoring systems and near real-time analysis of data flows to-and-from facilities has necessitated a constant, reliable internet service on every site. Activ8me Business Services’ satellite solutions can ensure sites can be connected online no matter how limited the local connectivity options may be.

With consistent data flows being a standard requirement both for operational functionality and safety and compliance, isolated locations can present significant challenges for infrastructure projects, with ongoing work dependent on continuous internet service in regions with very limited or no existing communications infrastructure.

With unlimited satellite internet for fixed and portable infrastructure sites, Activ8me’s custom-built hardware facilitates business-grade communications anywhere, with auto-aligning satellite dishes able to have a service operational in under ten minutes.

FIXED SATELLITE SOLUTIONS

With custom contention rates and enhanced business SLAs, Activ8me’s solutions enable continuous, uninterrupted service, which is a common requirement both for operational functionality as well as safety and compliance.

Services can be customised based on requirement, however a typical service includes a 30Mbps download/5Mbps upload speed tier on a 20:1 contention.

Services are augmented to meet the unique requirements of clients, taking into account expected usage of the connection, the volume of users, types of applications and much more to ascertain bandwidth requirements.

IoT connections, for instance, are configured to handle the large amounts of small data packets, routinely transferred to-and-from IoT networks every few seconds. For IoT, a connection of 5Mbps down/5Mbps up with 35:1 contention provides optimal connectivity.

Up to 20 users, or hundreds of small IoT devices, can share a 'pipe,' with customised contention and speed tiers coordinated to best suit the operational aim of the network.

DRP SOLUTION

The solution can be used as a redundancy network to backup existing fibre-optic or microwave networks, ensuring that operations can stay up and running in the event of a primary network failure.

PORTABLE INTERNET

These same satellite data services are available in portable solutions, allowing for easy transport and relocation. The satellite dish can be mounted on a vehicle or trailer, be set up using a non-penetrable ground mount, or even built into a case.

This Mobile-On-The-Pause solution is perfect for projects with changing locations or remote project teams. WiFi networks are built into Activ8me’s portable satellite hardware, with optional WiFi antenna for extended range of up to 100m.

BESPOKE SOLUTIONS

With an in-house R&D team, Activ8me often designs customised hardware to meet the unique demands of clients and additional functionality can be built into existing hardware when required.

Point-to-Point and extended WiFi can offer connections over extended distances, while WiFi-Mesh networks and LoraWAN technology can also be incorporated into network architecture.

Utilising these various technologies, Activ8me can formulate an end-to-end networking solution to suit practically any infrastructure project.

REPLACING CRITICAL ASSETS

IN A PANDEMIC

With COVID-19 restrictions significantly decreasing passenger numbers across all Australian airports in 2020, it became a suitable time to complete large maintenance and construction projects that would have otherwise caused extensive shutdowns. Brisbane Airport used this time to replace the entirety of its skylight that spans the length of the Domestic Terminal to maintain safety compliance.

As the gateway to Queensland for domestic and international visitors, Brisbane Airport's terminals have been designed to create a unique sense of space that makes a welcoming and lasting impression.

This sense of space encapsulates Queensland perfectly, capturing the warmth and light of the Sunshine State by bringing the outdoors in. At Brisbane Airport’s Domestic Terminal, visitors are welcomed by natural light that floods in overhead from the extensive skylight spanning 480m across the terminal’s ceiling. This architectural masterpiece has been a feature of the Domestic Terminal since its construction in the 1980s, providing opportunity for airlines and retailers to reap the resulting ambience and atmosphere.

Like all structures exposed to the elements, the skylight had reached the end of its life and required replacement in order to comply with relevant safety standards and protect the terminal from the elements.

Throughout the COVID-19 pandemic, Brisbane Airport Corporation (BAC), the operator of Brisbane Airport (BNE), reassessed all projects within the pipeline in order to prioritise those that were essential to ongoing operations.

Robert Scodellaro, Head of Project Services at BAC, said the skylight replacement project was identified as essential in order to ensure ongoing compliance of the Domestic Terminal.

“Construction for the replacement commenced in June, with practical completion being reached in October," Mr Scodellaro said.

FLEXIBLE CONSTRUCTION

Despite COVID-19 not having a significant impact on the project, the decreased passenger numbers did allow for some flexibilities around construction.

“The skylight project could only be accessed from the roof of the terminal itself, with all materials being craned to that location.

“In order to have a crane operating in an active airside environment, there are a number of complexities to overcome, including the need for both internal and external exclusion zones.

“With reduced passengers and flights, the removal of aircraft bays from the allocation plan to enable the required exclusion zones resulted in a reduced impact to airlines," Mr Scodellaro said.

Though it wasn’t only the aircraft bays that were affected. Despite operating in a heavily reduced capacity due to border restrictions, Brisbane Airport remained open and operational throughout the pandemic.

“Despite a significant decrease in passengers throughout the terminals, customer experience remained top-of-mind for any construction activities at the airport,” Mr Scodellaro said.

“This meant that all disruptive activities had to occur outside of operational hours, so they largely took place between 10pm and 4am."

RISK MITIGATION AND SAFETY PARAMOUNT

The Principal Contractor, Box & Co, took each of these challenges in their stride, delivering the project on time and with an impeccable safety record. Box & Co’s Managing Director, Simon Box, said the project came with its challenges, but the team committed to a collaborative approach with BAC to find solutions.

“As a proud local business, safety is always our priority and this project gave us the opportunity to really practice what we preach and prove our capability.”

With 1,090 glass panels and nearly a kilometre of roofing flashing that needed replacement, Box & Co facilitated 168 crane lifts to the rooftop, all from the airside environment.

“Prior to commencing on site, we worked through risk mitigation and safety procedures. Ultimately, we knew we had to send people to work from a rooftop at night in a really niche environment, so there were a number of challenges we had to design out of the process before we could commence,” Mr Box said.

“On top of the external environment, we were also very aware that the works were occurring above critical airport infrastructure such as check-in counters. We knew that any issues during the night shift could have an impact on airport operations the following morning.

“Scaffold harnessing and catch nets for dust and debris beneath the skylight internally are examples of the types of risk mitigation measures utilised throughout the project."

With the strong team dynamic at Box & Co, Simon Box knew he had the right people on board who would be able to deliver this project to a high quality, and most importantly, safely.

“We are a small company, and we were in the height of a global pandemic – utilising local suppliers who we have built relationships with over the years was critical to us,” Mr Box said.

“Knowing that we were giving additional work to trusted suppliers made the project a little sweeter in a time that was so unknown for the building industry.

“Box & Co is extremely happy to say that we were able source 93 per cent of construction materials from South East Queensland, with more than 90 per cent of the total employees working on this project living in South East Queensland.

“That not only includes the Box & Co team, but also subcontractors working on various aspects of the works," Mr Box said.

As Brisbane Airport looks to recovery, the newly replaced skylight at the Domestic Terminal will be sure to give passengers a warm welcome to the Sunshine State.

THE CRITICAL INFRASTRUCTURE SUMMIT IS BACK IN APRIL 2021

After a huge inaugural event in 2020, the Critical Infrastructure Summit – Australia’s premier event for the whole infrastructure lifecycle – is back to bring infrastructure professionals the latest news, innovations and thought-leading discussion on the industry’s most pressing issues.

In 2021, the Critical Infrastructure Summit will feature four Virtual Conferences over two weeks from 13–22 April.

Brought to you by the team behind Infrastructure magazine, the four free-to-attend conferences will explore the industry’s biggest challenges and predictions across the entire infrastructure lifecycle – construction, asset management and disaster resilience.

The 2021 conferences include:

♦ Critical Infrastructure: State of play – 13 April ♦ Asset Management for Critical Infrastructure – 15 April ♦ Disaster Management – 20 April ♦ The Future of Infrastructure – 22 April WHY ATTEND?

The infrastructure industry is set to play a major role in Australia’s post-COVID recovery, creating enormous growth and opportunities, but also new challenges and pressure to meet demand.

This means it is critical for infrastructure professionals to stay informed on the latest in the industry, from projects to technologies, innovations and the future outlook.

Topics across the four events for 2021 include: meeting COVID recovery demand in 2021; funding; the project pipeline; the last six months in the infrastructure industry; state of the airport sector; operating models and organisational design for success in asset management; digital asset management industry panel; bushfire mitigation; cyber security; futureproofing infrastructure; digital twins; building our future cities – connected, sustainable and accessible; and much more.

As well as the four major Virtual Conference events, the Summit will also feature online networking opportunities, enabling delegates to make genuine connections with other industry professionals.

WHAT’S NEW FOR 2021?

Building on the high-quality content from the 2020 event, 2021’s Summit will feature a new expert speaker lineup of leaders from across the infrastructure industry.

We want to give delegates more of what they liked best about the inaugural event, so we’ll be dedicating more time for delegate interaction and speaker Q&As. This means greater participation, with attendees becoming a part of the discussion and having greater access to senior industry figures.

NEW LIVE NETWORKING EVENTS

COVID-19 made it impossible to network with other infrastructure professionals due to restrictions, but in 2021 we’re introducing a live networking element to the event.

Attendees can still enjoy the entire Summit from the comfort of their homes or offices, but for those who want to get extra value from meeting up with peers in the real world, there will also be two live networking events to make connections and build new relationships.

Pending COVID restrictions, the live networking events will be held on Thursday 15 April in Melbourne and Thursday 22 April in Sydney.

This is the chance for delegates to network with like-minded infrastructure professionals in a fun and informal environment.

CONSTRUCTION’S COVID-19 OPPORTUNITY FOR REFORM

by Jon Davies, Chief Executive Officer, Australian Constructors Association

With great optimism, I anticipate 2021 will be the year that marks the turning point in the quest for a more sustainable construction industry. We have a unique opportunity to achieve real and lasting reform, but it will require the support of the entire sector.

Governments are relying heavily on the construction industry to lead the economy out of recession, but our industry is sick. Profitability is at an alltime low and productivity growth over the last 30 years trails that of other significant industries by 25 per cent. Women make up only 12 per cent of the construction workforce, and construction workers are six times more likely to die from suicide than a workplace incident.

There is a broad consensus that this sustainability crisis must be addressed for the construction industry to deliver the planned pipeline of projects efficiently, with the resources available, whilst leveraging opportunities to increase training, local procurement and engagement of indigenous and social enterprise.

In late-2020, the ACA published a series of documents that charted a clear way forward. Starting with an analysis of the most pressing problems facing the industry, we then developed a framework for a more sustainable sector, followed by an industry charter comprising ten commitments to reform embraced by Australia’s leading construction and infrastructure contracting companies.

Amongst other things, we identified that a sustainable construction industry is one built on the three key pillars of: equitable and aligned commercial frameworks; a strong positive culture; and the capability, capacity and skills to execute the projects it is called upon to deliver.

CONSTRUCTION’S COVID-19 OPPORTUNITY FOR REFORM

All three pillars are interlinked, and therefore improvement in one requires improvement in all. As an example, it is widely understood that adversarial commercial frameworks negatively impact culture, and a positive industry culture is a key factor in attracting people into the industry.

EQUITABLE AND ALIGNED COMMERCIAL FRAMEWORKS

Part of the solution to the challenges faced by the industry is greater use of contracts that promote a collaborative industry culture and incentivise innovation. True value can only be achieved when all the parties' interests on a project are aligned, and when open and transparent sharing of information is encouraged.

This is not a call for widespread use of alliance contracts, although the use of alliance contracts to deliver the Level Crossing Removal Program in Melbourne is delivering an exceptional outcome. There will always be instances where the use of lump sum or design and construct contracts are more appropriate. However, there is no reason why these traditional commercial frameworks cannot be drafted to contain more collaborative and equitable provisions, particularly regarding management of project risk.

More collaborative and equitable forms of contracts are in use elsewhere in the world and could easily be adopted here to save time and effort developing new contracts or amending existing forms. The best example of which is the NEC suite of contracts from the UK.

POSITIVE INDUSTRY CULTURE

While there have been some improvements to industry culture in recent times, construction workplaces and behaviours need to take a quantum leap if we are to make our industry a more resilient and attractive sector to work in, particularly for women.

The Construction Industry Culture Taskforce will shortly start consultation on a draft Culture Standard that seeks to align all parts of industry on the requirements necessary to make this leap.

SUFFICIENT CAPACITY, CAPABILITY AND SKILLS

To avoid capacity and capability constraints in the long term, there needs to be increased collaboration between government and industry to better identify potential skills shortages well in advance. This can be achieved through skills mapping and transparent, accurate project pipeline data. The data could then be used to smooth resource peaks by amending project start dates or to inform training initiatives to address potential shortfalls.

In the short term, with closed international borders and long lead times to train new people, we need to focus on increasing the efficiency of our procurement and delivery processes.

For example, we should put our valuable resources to work optimising designs and de-risking projects through advance works, rather than tying them up at tender producing volumes of information that add little or no value.

THE OPPORTUNITY

If we could just halve the gap in productivity growth that has been created between the construction industry and other industries over the past 30 years, we could construct an extra $10 billion of infrastructure every year for the same level of expenditure! This will be vital in a post-COVID-19 world with high levels of government debt, but no less of a requirement to construct productivity-enhancing infrastructure.

As a starting point, we need more collaborative partnerships between state governments and the private sector to enhance the three pillars supporting the sustainability of the industry. To fully realise this opportunity, the Federal Government needs to take a more active role in defining and incentivising the use of best practice procurement and delivery processes. The Construction Playbook, recently published by the British Government, accompanied by a direction to use it or explain why not, is a good example of how this could be done.

In comparison to many other countries, Australia has done a remarkable job in managing COVID-19. In part, this is the outcome of strong collaboration between the public and private sectors. This collaboration is transferable, and it is incumbent upon us all to grasp this unexpected opportunity for change with both hands in order to rebuild trust and develop a more sustainable industry for the benefit of all Australians.

For more information, and to view ACA’s document series and industry charter, please visit www.constructors.com.au/initiatives/industry-reform.

As the industry voice for design, advisory, and engineering businesses in the built and natural environment sectors, Consult Australia has been working with members to build the case for a greater focus on social value in considering infrastructure investments, which we see as critical to Australia’s COVID-19 economic response.

IT’S TIME TO FOCUS ON THE

SOCIAL VALUE OF INVESTMENTS

by Nicola Grayson, CEO, and James Robertson, Australia’s Policy Lead (People and Pipeline), Consult Australia

Despite sometimes being seen as such, the social value from infrastructure investments is not distinct from its economic value. Instead, an increased focus on social value can help shape and inform our investment decisions, ensuring that what we spend our money on results in economic benefits in areas of greatest community need. We see this as a ‘dual-lens’ approach, as a way to align future growth opportunities from investments with the values, objectives and priorities of our communities – the end users of these assets.

To deliver social value from investments and maximise community benefits, we must consider social impacts as early as possible in infrastructure projects – particularly in the business case phase of a project, where we look at whether an investment stacks up.

Social impacts are the consequences, both positive and negative, experienced by people due to changes in their surroundings from a project. While these social impacts can sometimes be difficult to consistently measure, they are no less real for those experiencing them. The earlier we think about them, the more influence we can have on the social value of a project, which in turn can improve the outcomes from a project and ultimately save time and money.

If we spend more time coming up with better ways to fully understand the impacts on how people live and interact, as well as the community’s composition and sense of place during the business case phase of a project, then we have a more complete picture of the ‘problem’ we are seeking to solve through the investment. This will inform whether or not the proposal is the right solution, and importantly, help refine and shape the proposal to align well with community needs.

NEW APPROACHES TO BUSINESS CASES

It is also important to note that following this process in itself leads to greater social value because it helps create greater community acceptance and lowers the risk of conflict as the project proceeds through its various stages. Arguably, a failure to follow this process is a significant cause for many projects around the country being cancelled or delayed, rather than a failure in the projects’ merits.

So how can we increase our focus on social value through infrastructure business cases?

Many of our members are developing clever ways to better understand social value by utilising new technology and innovative practices – both from a community-wide perspective and for certain cohorts.

The key lesson we are seeing showcased in these new approaches is the need to move away from a one size fits all approach, or cost-benefit analysis thinking, and instead be more flexible and considerate of the context and objectives.

For example, how we consider the social impacts in a business case for a rail project in a rural area should not be applied to a business case for an arts precinct in an inner urban area. The approach taken must be more tangible and specific to the problem or the opportunity that the business case is looking at.

We have also considered the benefits of bringing forward what happens later in the project to the business case development stage – primarily social impact assessments, which usually happen alongside environmental regulatory approvals once the business case is finalised.

Much can also be learned by looking at some of the practices that sit outside typical ‘infrastructure projects’, such as mining projects, as these have a long history of considering the social value and licence to operate from the community. We believe many of these practices are transferable to infrastructure projects.

One example is the NSW Department of Planning, Industry and Environment’s Social Impact Assessment Guidelines, which apply to state significant resource projects. Positively, an updated version of this guide is currently being proposed for all state significant projects, including new infrastructure proposals.

COVID-19 AS A CATALYST

Consult Australia has published a report looking at this topic in more detail which can be viewed at www.consultaustralia.com.au/home/advocacy/pipeline.

We hope that the report adds to the growing public debate about how we can extract more social value from infrastructure investments. We believe Australia’s economic response to COVID-19 is the catalyst to improve how we assess the investments that are important to us as users of infrastructure, and the legacy that we would like to create for future generations. As such, improving how we consider and shape social value from investments is essential.