Major infrastructure projects are delivered over many years and require major investments in skills and equipment from companies in the sector. Political and infrastructure timelines often do not work well together and have led to many cancelled and severely delayed projects over the years. With project funding rising and falling often around political cycles it becomes a roller coaster, making it difficult to plan long-term and invest in the skills and technology needed to drive productivity improvements in the sector.
A clear, evidence-based approach to prioritizing infrastructure ensures that the risk around projects being cancelled or delayed is significantly reduced. As this report shows, these practices are becoming more common in North America.
Uncertainty is very challenging for companies in the infrastructure sector. For a major project such as a large bridge or transit line, participating in a procurement process can cost millions and absorb the time of critical employees, without any guarantee of winning work. Unstable markets that become known for project cancellations or frequent delays become less attractive places to bid and the best talent is often posted to other locations or industrial and commercial projects as a result. For Canada and the United States, the multiple layers of government and their respective elections add significant risk and uncertainty.
Another issue created by political cycles is the undulating nature of funding for infrastructure. Infrastructure funding typically ramps up before elections and is scaled back shortly after, often as budgets are raided to plug gaps in funding for service delivery. In reality this means as work dries up, companies delivering the infrastructure are forced to lay off workers and cut back on investment in new equipment or technology. This uncertainty also ripples all the way through the construction supply chain.
Across the United States and Canada state and provincial governments are developing more structured approaches to infrastructure planning and delivery. These approaches are building more solid foundations for a strong, innovative infrastructure market that can deliver greater value for taxpayers and better services for people.
The following are excerpts from a report published by the Canada-US Infrastructure Council exploring some leading practices across provincial and state governments in North America and examines the approaches from Australia and United Kingdom to long-term planning and prioritization.
To read the full report including case studies from Canadian and international jurisdictions, click the icon below: