What’s wrong with Infrastructure Decision Making?

 

This is by way of a ‘heads up’ to coming posts on infrastructure decision making.   In June last year, the Institute for Government  in the UK produced the report “What’s wrong with infrastructure decision making: conclusions from six UK case studies”

Major conclusions were:

  1. There is no national strategy for infrastructure investment
  2. Government does not devote enough time to assessing early options and seizes apon preferred projects too soon
  3. The more ambitious the project, the more questionable the model
  4. A failure to understand project risk
  5. The difficulty of making decisions which create ‘concentrated losers’ (which can and do become vocal opposition groups)
  6. Inadequate post project evaluation means we do not learn for future projects

You can probably identify with all of these problems in your own work.  The Institute draws on mega projects in the UK such as The Third Heathrow Runway, the High Speed 1 and 2 rail proposals and the ultra expensive Hinkley Point C nuclear energy plant proposal, amongst others.   But you can think of large and small projects in your organisation, state or country.

Over the next six posts we will consider each of these and then look more closely at the way we make our infrastructure decisions here in Australia. We are all familiar with studies that argue that government decision making is abysmal and should be replaced with private sector decision making, which is assumed to be so much better ‘because it is focussed on profit making’.  But when it comes to infrastructure, both economic and social infrastructure, ‘profit-making’ is not the goal.  Here, we are really looking at ‘the social value of shared resources’ in the terms of Brett Frischmann. 

It is important to bear this in mind as we consider these infrastructure decision making problems, no matter who is making them, for when an infrastructure decision is passed to the private sector to make, it is a public sector decision that makes this possible.

QUESTION:   What other problems beside these can you identify?

2 Thoughts on “What’s wrong with Infrastructure Decision Making?

  1. Thanks Penny. A very interesting post.

    What is indeed interesting about these 6 points is that they are all in the realms of Project Management. The Project Management Body of Knowledge (PMBOK) lists best practice tools and techniques to avoid making mistakes in these areas.

    Of course, each kind of project has its own domain-specific issues. When one does risk analysis for an Information Technology project, for example, the list of common issues is different than in a Civil Engineering construction project. So it is not as if the PMBOK will give us specific solutions to these questions; its processes merely recommend that we deal robustly with them – often from expert knowledge in the relevant domain.

    If we had to view these 6 points from a perspective of Project Management best practice, we might say something like this:
    * Points 1, 2, and 3 are failures in Project Selection – which is part of Project Scope Management.
    * Points 3 and 4 are failures in Project Risk Management.
    * Point 5 is a failure in Project Stakeholder Management.
    * Point 6 is a failure in Project Integration Management, especially in the Closeout Process.

    These 6 identified problems are common to projects of all kinds. But with infrastructure projects, any flaws and failures seem worse because of the higher visibility: the large public cost, long life, and impact on the public. In our own smaller projects, problems have a smaller audience. But when infrastructure projects go wrong, they are multi-million-dollar semi-permanent monuments to a failure of process.

    And this is nothing new. The first attempt at the Panama Canal (in 1881, before Theodore Roosevelt promoted it in 1904) was by a French public company. The attempt failed and the damage to the public shareholders was so severe that it toppled the French government in 1892. (The USA bought the French equipment and works in 1904 and pushed the project through.)

    Project Management takes on an enlarged dimension when new projects have to coexist with and to complement existing projects. Then we enter the realms of Portfolio Management. It occurred to me that Infrastructure Decision Making is never as simple as mere Project Management, but always has the additional challenges of Portfolio Management. When we build Infrastructure, we add to the mix.

  2. David Hope on February 28, 2018 at 11:12 am said:

    A seventh point is stakeholder engagement. It is often the case that ‘assumptions’ are made about what stakeholders want in terms of service delivery, without asking them. Their tastes, needs and wants change over time. Their perceptions of what can be made available in terms of services are constantly being updated and changing. Plus, it is important to have some focus on future stakeholders, today’s youth. Failure to address changing tastes, needs and wants and the potential needs of future stakeholders may well mean that the wrong services are delivered and the wrong infrastructure decisions are made. This does have some linkage with the fifth point.

    The sixth point is a very important issue and has been a significant contributor to wastage and inefficiency in the public sector. Monitoring and reviewing the outcomes of any decision is a critical task. Perhaps most readily seen when there has been a cost benefit analysis undertaken before a project is given the green light. When the project is complete, there is a sense of achievement, but little done in determining whether the benefits that were the basis for the decision have been achieved. Part of the reason for this is political – we don’t want the achievement undermined. However, failure to learn from under or over achievement means that future infrastructure decisions could be at risk.

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