Improving Delivery Models

Why improve infrastructure delivery?

We are failing to deliver infrastructure well, yet we need it more than ever.

Infrastructure plays a central role in most of the stimulus recovery plans post COVID-19. Investing in infrastructure delivers a clear and tangible dividend. GI Hub analysis undertaken for the G20 in 2020 found that for every $1 invested in infrastructure, $1.5 is returned to the economy. Forthcoming GI Hub work shows that Governments are aware of this and have committed USD3.2 trillion to infrastructure since the start of the COVID-19 pandemic.

Delivering public infrastructure can be challenging, and in recent years an increasing number of issues have emerged. Many of the challenges faced in delivering infrastructure can be traced back to the process of choosing the delivery model and the subsequent structuring of the project. In fact, the International Monetary Fund (IMF) found that 67% of cost overruns on infrastructure projects originate prior to contract award. GI Hub’s own stakeholder consultation with the public and private sector anecdotally validated this finding.

Furthermore, the IMF also found that on average 33% of project’s budget merely covers inefficiencies in the delivery process whilst the Inter-American Development Bank found that cost overruns account for 28% of the total infrastructure investment cost.

Aligned with the G20 Quality Infrastructure Investment Principles, this initiative aims to provide infrastructure decisionmakers and practitioners with proven delivery improvements to help ensure we ‘build back better’, avoid cost and time overruns, and deliver transformative infrastructure while ensuring the sustainability of the sector through co-operation and collaboration.

Key features

Improving Delivery Models showcases proven infrastructure delivery improvements made by governments and industry under the six themes of:

• Capability and capacity - Improving organisational ability to adequately plan, deliver, operate, and maintain quality infrastructure
• Cooperation - Partnering with other connected parties to achieve improved shared outcomes
• Efficiency - Optimising delivery to maximises outcomes 
• Finance - Identifying and securing funding and financing of infrastructure 
• Risk - Ensuring that risk in delivery is adequately planned, managed and allocated appropriately
• Sustainability - Considering the environmental sustainability impact infrastructure can provide.

Core components of this initiative are: Delivery Challenges and Improvements Framework; Contractual Models Overview; case studies and key references.

Delivery Challenges and Improvements Framework

The functions of the framework are to:

• Identify key infrastructure delivery challenges under six themes. These challenges existed prior to COVID-19 and their impact has been heightened as a result of the pandemic.
• Detail a selection of proven improvements to infrastructure delivery. The improvements span all infrastructure phases, and aim to strengthen planning and procurement through key enabling capabilities, behaviours, processes, and critical outcomes.
• Showcase infrastructure delivery improvements that are independent of the delivery model used. The initiative doesn’t promote one form of infrastructure delivery model, instead it outlines improvements that could be implemented independent of the infrastructure delivery model.

Delivery Models Overview

The overview describes the key functional differences between delivery models and provides guidance on circumstances to which each model is most suited. The number of infrastructure delivery models is constantly increasing, as hybrid models are designed and deployed. We outline the common models identified by the World Bank, describe their differences, and summarise appropriateness for various circumstances.

Case studies

The case studies include projects worldwide, and can be filtered by region and other characteristics.

Key references

The key reference section is a compilation of guidance documents and other resources developed by governments and organisations worldwide to improve infrastructure delivery. Given the increasing number of relevant resources being created, we have brought these together in one library for quick and easy reference.

How was Improving Delivery Models developed?

This initiative was developed through extensive literature research and consultation with stakeholders from G20 member countries and industry.

The initial scoping was informed by a series of stakeholder consultation sessions to discuss the purpose, need and scope. Once these were established, Jacobs was contracted to work with the GI Hub in developing the initiative. GI Hub and Jacobs undertook an extensive literature review identifying and collating the key infrastructure delivery challenges and improvement opportunities. Material considered can be found on the key references page.

An initial list of infrastructure delivery challenges and improvements were identified and then collated into common themes. A draft set of delivery challenges and improvements were documented and then subjected to extensive stakeholder review and comment, from a large array of public and private stakeholders across jurisdictions.

In parallel, GI Hub and Jacobs sourced 40 cases studies from G20 countries to illustrate each of the improvements. Cases studies were gathered from a range of different infrastructure sectors and jurisdictions. Where possible interviews were conducted with stakeholders for several case studies to gather further insight and understanding.

Feedback and comments from stakeholders have been incorporated into the initiative. GI Hub would like to especially thank the following stakeholders who provided comments and feedback to enhance the quality of Improving Delivery Models. These included:

• Government and infrastructure bodies: Hong Kong Development Bureau, Infrastructure Australia, Infrastructure Ontario, Infrastructure and Project Authority UK, PPP Unit Indonesia, and Victorian Department of Treasury and Finance
• Infrastructure delivery agencies: Sao Paulo PPP Unit, SNCF Gares et Connexion, Societe du Grand Paris, and Thames Tideway UK 
• Infrastructure professional bodies: Infrastructure Partnerships Australia, Institution of Civil Engineers UK, and Royal Institution of Chartered Surveyors
• International, multi-lateral and regional entities: European Bank for Reconstruction and Development, European Investment Bank's European PPP Expertise Centre, OECD, and the World Bank
• Private sector: Acciona, Allen & Overy, Bouygues, Dalkia, DLA Piper, Engie, John Holland, King & Wood Malleson, Lendlease, Plenary Group, SNC-Lavallin, and WeBuild.

For consideration

When using the Improving Delivery Models initiative it is important to consider the following:

• In the context of this initiative, ‘delivery’ should be understood in a broad sense. Delivery covers the myriad of considerations governments face in planning, procuring, constructing, and operating infrastructure. 
• The list of improvements and challenges is not exhaustive nor definitive. It is a selection based on the extensive stakeholder consultation and literature review.
• The choice of themes and the classification of challenges and improvements in each theme is an editorial choice based on the stakeholder consultation and literature review.
• The initiative is contractual model agnostic in that all contractual models are considered in a level playing field approach.
• It was developed with a predominate focus on the challenges and improvements observed in G20 economies. Although the majority of challenges and improvements can be applicable to many jurisdictions, the focus on G20 economies assumes the existence of highly sophisticated infrastructure markets. In the future, as the initiative evolves, we intend to capture more challenges and improvements applicable to less sophisticated infrastructure markets.
• The focus on G20 economies means the majority of case studies, examples and resources are from G20 economies. As the initiative evolves, the case study library will evolve too.
• Some challenges and/or improvements may only be applicable in certain circumstances. Implementation of improvements in some jurisdictions may not be possible without structural or legislative change to infrastructure delivery laws, regulations, or processes.