Most of our public infrastructure isn’t a cheerful sight these days. At both sides of the Atlantic, civilians suffer from delays, outages, minimal comfort…because the critical infrastructure they rely on, on a daily basis is in such an appalling state.
Roads, bridges, tunnels, stations…all suffer from the same. This didn’t happen suddenly, and we can identify 2 main reasons for this:
- The classical ‘tendering’ contracts, based on mere price competition, drive general contractors (GCs) to build an asset at a ‘low as possible’ cost. This leads to minimal (sub 1%) margins and leads to heavy compromises in quality.
Infrastructure isn’t sexy and issues nor their solutions seldom come with short-term gains. As a result, central governments have been cutting back heavily on maintenance budgets and have regularly outsourced very critical maintenance tasks, pushing necessary decisions forward.
No silver bullet has been identified yet, but promising signals can be found when authorities start implementing DBFM(O) or PPP types of contracts (Design, Build, Finance, Maintain and Operate) or (Public Private Partnership).
In this case the contractor has the responsibility to design and build the structure, but also is required to maintain and operate it for 25 to 30 years. As such, the need for a high-quality construction is placed at the same entity that will be responsible for its maintenance for many years to come.
The incentive is clear, as when the asset is inaccessible or in an ill-shape, the contractor will not receive its monthly rent, or even be penalized: clear and transparent. For many contractors this is a new playing field, but luckily an approach consisting of continuous sensor-based monitoring and data analysis allows them to detect degradation in an early stage. As such, small interventions at low cost can be scheduled, preventing large and costly major overhauls.
Have questions? Feel free to get in touch