Ensure your infrastructure project is shovel-ready & -worthy
With an expected $125 billion in extra federal funding for infrastructure over the next 10 years, infrastructure has become as sexy as tech….well maybe not quite. A wastewater project is never going to capture the public eye like an app that helps track the best tasting beer but it is fair to say the public benefit may be somewhat greater. There is also an immediate need for infrastructure spending, particularly in terms of recapitalizing existing infrastructure. The 2016 Canadian Infrastructure Report Card notes that “one third of our municipal infrastructure is in fair, poor, or very poor condition, increasing the risk of service disruption.“
The problem lies in projects that are shovel-ready and shovel-worthy. There were hundreds of millions left unspent from the previous government’s infrastructure program because infrastructure projects take time to plan properly, depending on their size which can take several years. In order to inject this infrastructure investment into the economy, these projects should have already progressed to the point that funds can be granted.
There has been a lot of discussion over projects not just being shovel-ready but shovel-worthy. There should be no distinction between the two. If a project has been vetted effectively throughout the various stages of the project life-cycle then it should be shovel-worthy, unfortunately this is often not the case.
What needs to be done to ensure projects are shovel-ready and shovel-worthy?
- There needs to be data that can be used to monitor the performance of our infrastructure
The data should be standardized and regularly updated and preferably publically available. It can be used to develop metrics that monitor the performance of our infrastructure. This data will provide leading indicators as to where problems exist and a strong basis to plan.
- There needs to be clear service standards or benchmarks established for infrastructure services
This is more easily accomplished for some infrastructure services. However, regardless of the value of the information collected from step one it only provides half the story unless there is a mandated benchmark to assess performance over time. This has recently been identified in Australia as a key recommendation by its independent infrastructure body, Infrastructure Australia, made up of government officials, top business people and academics. Service standards are a key guide to future planning and development. We shouldn’t shy away from using this advice.
- There needs to be a clear, independent business case.
An independent business case articulates the need, the various options to address, the costs and the benefits, financial and non-financial aspects. The chances of project funding are dramatically improved when backed by an objective and rigorous business case assessment. If there is publically available data and standardized set of service standards or benchmarks for infrastructure services then this will allow for projects to be compared and contrasted between jurisdictions. Coupled with strong project governance and a vigorous internal review process, these projects will have the best chance of meeting Federal Government criteria and allow the funds to flow.
The new Government has stated that they will develop a new framework for how it handles infrastructure projects, including giving more autonomy to municipalities to identify their infrastructure priorities. The Government is also expected make the process more transparent, ensure that project criteria are easier to understand, and speed up approvals for projects.
However, municipalities don’t need to wait for this. They can put their own systems and standards in place and make it easier to get funding into critical infrastructure projects sooner.