How to get your share of the infrastructure pot of gold
How to get your share of the infrastructure pot of gold
I nfrastructure is where it’s at. More money than you can count is currently being pumped into major infrastructure projects throughout Australia – in particular the east coast.
The 2017-2018 Federal Budget committed more than $70 billion to infrastructure development across Australia. Infrastructure Australia has identified more than $ 55 billion worth of “nation-shaping projects” in its Infrastructure Priority List.
Current mega-projects on the go include the $16.8 billion WestConnex project and the $10.9 billion Melbourne Metro Rail project.
Flowing on from the bottomless pit of infrastructure spending is an expected national rise in construction growth and spending.
The Australian Industry Group-Australian Constructors Association Construction Outlook
Survey predicts major construction project growth through to 2019, driven by non-mining infrastructure and commercial and residential development work. The Sydenham to Bankstown Urban Renewal Corridor Strategy is a prime example.
Whether the infrastructure or construction projects relate to road, rail, tunnels, commercial buildings or houses, they all need a steady stream of material inputs to keep them on track and a produce a relentless stream of soil, spoil and construction wast – almost all of which is required to be transported by road.
Are you salivating for your share of this pot of gold yet?
How do you position yourself to increase your prospects of taking part in this growth and securing valuable business? Well, you look at the most significant pressures faced by the owners of infrastructure and construction projects and make sure that you are part of the solution rather than the problem.
The 2017 Teletrac Navman Global Construction Benchmark Report
identified the three biggest concerns or constraints within the construction and infrastructure sector as:
• Managing costs
• Improving efficiencies
• Reducing safety breaches/incidents.
As always, the primary criterion is money. Costs are one of the biggest factors affecting project return, so input pricing is always going to be a key concern. I will leave that to you to manage, as you are much more experienced than I am.
Apart from cost, efficiency is the next biggest driver of project return.
Time is money and one of the biggest causes of cost blowout is delay and disruption to project timelines, as this always has massive flow- on effects to the multiple moving parts necessary to deliver any project.
Here, the focus is on quality assurance, underpinned by good business practices and often by appropriate use of technology solutions. For example, adoption of vehicle telematics systems that allow for up-to-the-minute vehicle allocation, scheduling and tracking.
Finally, safety is the third-largest concern on any project.
Apart from the ‘goodwill to all men and women’ aspect, the reason is that nothing shuts a project down quicker and more comprehensively than a safety incident. An additional safety element is that, under the chain of responsibility (COR) laws, vehicle, load and driver safety is a shared responsibility right along the road transport supply chain, meaning that breaches by transport operators can drag project principals down with them.
It shouldn’t surprise you that the three are not just independent considerations but are also linked.
Safe transport businesses are less subject to disruption and downtime, meaning they are more operationally efficient and increase costs savings, rather than increase costs.
For example, the Austroads 2008 Analysis of the Safety Benefits of Heavy Vehicle Accreditation Schemes report found that heavy vehicles enrolled in industry accreditation schemes, such as TruckSafe, were between half and three quarters less likely to be involved in crashes than non-accredited vehicles.
“Safe transport businesses are less subject to disruption”
Likewise, accredited operators found that claims costs were 57 per cent lower within two years of obtaining accreditation. Fewer crashes and fewer claims mean more time hauling freight and meeting project milestones.
What all of this boils down to is assurance. In order to be awarded more of this valuable work, transport operators need to provide project principals with greater assurance, in terms of cost certainty, operational efficiency and safety, than the next transport operator.
Assurance in relation to compliance is increasingly becoming a non-negotiable component of any tender or award of work.
Many of the major projects have started adopting detailed compliance assurance frameworks into their tender process – imposing mandatory requirements for detailed COR management plans to be submitted for evaluation before work is awarded.
On the project principal’s side, they require a high level of assurance that contractors and subcontractors have proper awareness of and systems designed to ensure compliance with their COR obligations
On the contractor’s side, it is important, and quickly becoming essential, that you are able to clearly and convincingly demonstrate that you compliance is up to speed and you do not pose a compliance risk to the project before you get any work.
Essential criteria included in many of these project requirements include:
• Hazard identification and risk analysis of the COR compliance breaches
• Pre- qualification COR compliance screening of any subcontractors
• COR compliance terms in all supply chain contracts
• Incident reporting, response and
• Systems for providing effective induction, training and awareness of COR compliance requirements and practices for your own employees and suppliers/subcontractors
• Systems in place for monitoring and measuring your and your partners’ COR compliance performance and for reporting it up the tree. So, in order to increase your prospects of gaining more project work, start thinking more from the perspective of what assurance you can provide to project principals to alleviate the pressures that impact on their business.
It also helps to have this information readily to hand and in a concise and well-presented package, rather than presenting them with a document dump and saying ‘ find it yourself ’.
Nathan Cecil is a partner at Holding Redlich T: 02 8083 0429 M: 0405 239 402 E: email@example.com