Infrastructure prioritization and planning is rising up the agenda for governments, developers and investors around the world. In this roundtable discussion, we brought together industry experts from the UK, Brazil and South Africa to share their experiences and advice for improving the way infrastructure is planned and prioritized.
Tomas Bruginski de Paula is a Director with the Company for Partnerships at the State of Sao Paulo, Brazil; William Dachs is the COO of the Gautrain Management Agency in South Africa; and Bridget Rosewell is a highly-regarded UK infrastructure advisor and Commissioner for the independent National Infrastructure Commission.
In your opinion, what can be done to improve the way infrastructure investments are currently assessed and prioritized?
William Dachs: It may be a broad statement, but I think the big challenges often arise when governments try to translate policy into practical action. We get lots of wonderful policy papers – well thought out arguments on why public transport should get preference over private or road-based transport – but very little of that actually rolls down into real projects.
Tomas Bruginski de Paula: I think in Brazil – certainly in Sao Paulo State – one of the biggest challenges comes down to government capability and capacity to properly plan and assess projects. We’ve had a long period of very unstable investment into infrastructure in Brazil and that often means that we don’t have a stable enough pipeline to maintain and improve those capabilities.
Bridget Rosewell: The UK has a fairly mature assessment process. What is not being well addressed, however, is the role that infrastructure plays in a changing economy. People seem to understand that infrastructure matters and that it contributes to growth in the economy. What we haven’t yet pinned down is how we rationalize decisions differently as a result.
What role should economic benefit play in the business case development process?
Tomas: Particularly in the transport sector, economic benefit plays a massive role. When we go to the international stage for funding, international investors and institutions are very demanding when it comes to economic benefit. Economic benefit is also key to our own decision-making; we always want to ensure that our investments are going to the projects that deliver the best benefit in the long-run.
William: I’d absolutely agree. It’s not good enough to just say that you are going to improve mobility and accessibility. That’s not going to make the priority list. It’s got to have a massive social impact; it’s got to start moving people from the poorer satellite residential communities into employment areas and demonstrate the economic impact that will have. You can’t overstate the importance of socio-economic criteria.
Bridget: I think in the UK we are beginning to recognize that it’s about even more than just economic benefit. It’s about rationally selecting and then balancing a set of criteria that achieve the vision that you are trying to attain. The criteria need to be not only useful and measurable, but also something that our politicians can understand as being realistic.
What role should politics play in the infrastructure planning and prioritization process?
Bridget: I actually believe we need to find a model where political engagement is more incorporated than it is today. I think where we are going to see the most activity in that arena is at the city level. That’s where these trade-offs can happen in a more integrated fashion; in a more ‘small p’ political rather than ‘big p’ political fashion.
William: You can’t take away the politics even if you wanted to. Any manager operating in the infrastructure space must have political support. But what needs to stop are the sudden changes that often come from a change of party or policy. Once the planning has led to an investment decision, these decisions must be honored in the same way as a contractual agreement and that’s not always the case when politics is involved.
Tomas: I absolutely agree. Prioritizing investments requires a view of what you want to offer the next generation and that’s a political decision. The problem comes when politics starts to interfere with the details. You need to focus on finding the best technical approach to the project – maybe make minor adjustments based on relevant political issues – but the core decisions –including scope and financing must be technical ones.
What advice would you give to those involved in infrastructure planning and prioritization today?
Tomas: I think it’s about understanding what you can sustainably achieve. I think planners are afraid to reduce the scope of the project in fear of missing a big target. But if you can deliver a project – on time and on budget – that provides 80 percent of your goal, that’s much better than failing to deliver a project because you set an ambitious but unrealistic target.
Bridget: I think that’s absolutely right. And I’d say we need to start thinking more in terms of the risk scenarios. Maybe not trying to get the perfect outcome or right answer, but rather balancing the risks and developing the scenarios that help define what you need more of.
William: And I think that echoes for the broader prioritization process. A lot of countries get overambitious and try to solve all of their problems in one 10- year plan and the reality is that they just don’t have the resources, the investors or – frankly – the risk appetite to get it done.
To read more on this interview and other articles and case studies on economic prioritization, read our full report (PDF 2.5 MB).