Challenges and Improvements Framework

Capability and Capacity

Challenge

Limited delivery capability or capacity of some government line agencies.

IMPROVEMENTS

Establish a dedicated public delivery authority Use infrastructure delivery models where the private sector provides its delivery management expertise Use an Intelligent Client Model Implement Major Project Leadership training Seek Overseas Development Assistance Use Project Preparation Facilities

Challenge

Retention of delivery knowledge over a program of works and ensuring price competitiveness.

IMPROVEMENTS

Create a program-based specialised national agency Use a Delivery Partner model over an infrastructure program Create a construction costs database

Challenge

Lack of workforce diversity in infrastructure.

IMPROVEMENTS

Produce procurement guidelines with mandatory targets

Challenge

Inadequate skills and labour available to deliver the increasing number of infrastructure projects.

IMPROVEMENTS

Establish integrated infrastructure skills and employment centres Establish high demand skills training centres Provide a transparent pipeline of projects

Challenge

Consistently apply a structured infrastructure investment decisionmaking framework and process.

IMPROVEMENTS

Use a Gateway Review Process
Cooperation

Challenge

Insufficient early project planning and consultation leading to poor procurement outcomes for projects with a high level of complexity.

IMPROVEMENTS

Perform early market sounding with potential contractors, consultants, and suppliers Use Early Contractor Involvement Implement a co-design method to infrastructure design

Challenge

Lack of a co-operative approach between client and contractor teams (design or build teams).

IMPROVEMENTS

Use a Progressive Design-Build (PDB) Use Integrated Project Delivery or Alliances Co-locate client and design and construction delivery teams Foster a co-operative mindset regardless of infrastructure delivery model Use dispute resolution boards (DRBs) Use client collaboration groups

Challenge

Conventional operations and maintenance arrangements can lack collaborative planning leading to cost overruns or sub-par performance.

IMPROVEMENTS

Establish longer term partnerships
Efficiency

Challenge

Achieving an appropriate level of project design during planning stage.

IMPROVEMENTS

Ensure a sufficiently detailed level of design

Challenge

Construction stage is the primary focus of infrastructure decisions rather than a whole of life approach.

IMPROVEMENTS

Appraise and select the procurement model based on a full and balanced understanding

Challenge

Inflexible selection and choices of contractual models and overreliance on the contractual model to solve construction and delivery issues.

IMPROVEMENTS

Use an agnostic approach

Challenge

Under-estimation of the importance of the procurement and packaging decisions

IMPROVEMENTS

Recognition that the procurement strategy

Challenge

Infrastructure budgets are based on early cost estimates. Early cost estimates are often understated (based on ratio at early stage of the design process). Actual project costs substantially exceed approved budgets due to variations and claims.

IMPROVEMENTS

Use properly funded contingencies Undertake early contractor engagement Compare against a database

Challenge

Infrastructure innovation and improvement is constrained by procurement procedures preventing a proper dialogue having a singular focus on price and procuring outputs rather than outcomes

IMPROVEMENTS

Engage in a competitive dialogue or innovative procurement

Challenge

Infrastructure not keeping pace with future population growth and changes in user behaviour.

IMPROVEMENTS

Consider bundling smaller assets together Use Output Specifications

Challenge

High cost of bidding projects.

IMPROVEMENTS

Reimburse a portion of bidder costs Allow government to conduct planning and third-party due diligence Ensure efficient procurement processes

Challenge

Lack of digital readiness constrains the ability of infrastructure projects to achieve whole of life efficiency gains from digital capabilities.

IMPROVEMENTS

Produce a coherent digital plan

Challenge

Land acquisition issues in Infrastructure delivery.

IMPROVEMENTS

Use a land pooling scheme
Finance

Challenge

Fiscal capacity of governments adversely impacted by COVID-19.

IMPROVEMENTS

Use Asset Recycling Programs Use an asset lease and concession agreement Combine a private sector partnership delivery approach

Challenge

Demand and usage uncertainty of infrastructure.

IMPROVEMENTS

Diversify the funding streams of projects Have the client take the usage risk on the asset

Challenge

Lack of appropriate funding envelope.

IMPROVEMENTS

Split the project business case into two parts

Challenge

Lack of private sector investment due to projects being too risky or ‘un-bankable’.

IMPROVEMENTS

Consider all levers Provide a sovereign guarantee
Risk

Challenge

Imbalanced risk allocation between client and contractor due to a lack of investigative works or consultation in the planning process.

IMPROVEMENTS

Use early works to de-risk pre-construction Carefully consider seeking to transfer risks to contractors Use collaborative contracting and target price contracts Use market sounding Use a risk allocation approach

Challenge

Interface risk in complex projects is often understated.

IMPROVEMENTS

Package parts of a project
Sustainability

Challenge

Meeting changing community expectations of infrastructure with regards to ethical use of materials and labour, sustainability, and inclusive growth.

IMPROVEMENTS

Use ethical sourcing of labour and materials Plan and identify social value outcomes

Challenge

Procuring competent, qualified, and authorised contractors and suppliers and avoiding corrupt purchasing practices.

IMPROVEMENTS

Use an Anti-Corruption Construction System (CCS)

Challenge

Use infrastructure to contribute to achieving sustainability and emissions reductions targets and outcomes.

IMPROVEMENTS

Achieve decarbonisation and sustainability outcomes Make use of existing assets Establish an independent sustainability monitoring body

Challenge

Cascading social investment from the infrastructure project down to affected communities.

IMPROVEMENTS

Connect with communities through project volunteering programs Use community spaces

Improving Delivery Models