Designing Buildings - User contributions [en]

On-site generation of heat and power

2017-04-05T12:53:12Z

ISIDORAKOSTA: Created page with "File:IStock-543047254.jpg The challenge The distributed power delivery model is outdated, wasteful and unreliable. Providing sustainable energy is vital for the on-going h..."

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The challenge

The distributed power delivery model is outdated, wasteful and unreliable.

Providing sustainable energy is vital for the on-going health and viability of cities in the future. Dependence on the distributed power delivery model in major cities such as New York City is irresponsible and untenable.

One critical flaw of distributed power systems is their vulnerability to weather events. Climate Central’s analysis of 28 years of power outage data, supplied to the Federal Government and the North American Electric Reliability Corporation by utilities, shows that since 2003 (after stricter reporting requirements were widely implemented), the average annual number of weather-related power outages has doubled. Non-weather related outages have also increased in that time, but weather caused 80% of all outages between 2003 and 2012.

They are also extremely wasteful. Nearly two-thirds of the fuel used to generate power in a power plant never reaches its destination as electricity. Most of that is discarded at the power plant as heat. Additional losses are due to inefficiencies in transmittance, mainly due to resistance of the utility power line.

A better, cleaner and more effective way to heat and power buildings, campuses and cities exists. It is time to move away from the outdated model of distributed energy to something more sophisticated, calibrated and sustainable.

The idea

Localized, point generation of heat and power – onsite generation – provides an independent, responsive, sustainable method of energy supply.

On-site generation can include renewable energy technologies, such as photovoltaics, anaerobic digestion, distributed steam for heating and power and co-generation technologies. Over the past five years, interest has been growing in distributed generation systems, cogeneration/Combined Heat and Power (CHP) plants as well as microgrids.

With on-site generation, reliance on distributed systems is reduced or even abolished, helping to avoid distribution losses and allowing independence from grid-related outages, shortages or demands. The availability of critical infrastructure in the event of natural or man-made disasters is in no small way driving this current interest in on-site generation methodologies.

A number of market drivers explain this growing interest in on-site generation, including low natural gas costs, increasing electricity costs and a desire to maintain manufacturing equipment uptime. More stringent environmental regulations have increased utility costs (and central plants) as well.

Likewise, environmental drivers around clean power, clean air and pollutant control have created an environment for a cleaner, more efficient method of generating and delivering power.

Combined Heat and Power (CHP), also called co-generation, simultaneously generates power and thermal energy by recycling the captured heat from electricity production and transforming it into useful thermal energy. As a result, CHP technology converts up to 85% of fuel into useful energy and consumes 40% less fossil fuel than traditional technologies. By delivering a localized, uninterrupted and efficient energy supply, CHP reduces fuel requirements, mitigates greenhouse gas emissions, saves money and reduces exposure to market fluctuations as well as severe weather.

According to a report by management consultants ICF International, CHP represents 7% of current US generating capacity. 70% of CHP capacity is in use for industrial purposes. Of the total US CHP generating capacity, 87% is natural gas-fired.

The impact

On-site generation reduces greenhouse gas emissions and supports critical services in the event of a natural disaster.

According to the American Council for an Energy-Efficient Economy, CHP will conservatively contribute approximately 46 million metric tons in CO2 emissions savings nationwide by the year 2030. While these savings are specific to CHP, the potential reduction of greenhouse gases for all forms of on-site generation is tremendous.

Likewise, the benefits of a reliable means of providing power to critical systems cannot be overstated. In New York City (NYC) after experiencing the impact of Hurricane Sandy, the resilience and reliability of power supply has become paramount. During the storm, while the majority of Manhattan was without power, most of New York University’s (NYU) Greenwich Village campus had electricity, heat and hot water. The traditional utility grid struggled to maintain delivery of power and the majority of lower Manhattan was without electricity. However, NYU was able to generate its own electricity and heat via a 15 MW peak cogeneration plant.

Barriers to innovation – and solutions

Financial cost is a major hurdle to widespread use of on-site generation.

Many university campuses, industrial facilities and hospitals in North America have adopted a localized co-generation approach to meeting heating and power demands. The challenge lies in translating this model to other environments. A major hurdle is the cost – upfront and long term – of on-site generation.

In NYC, standby tariffs are imposed when operating in conjunction with the grid. Utilities charge for additional infrastructure that is used when on-site generation fails or is down for maintenance. This added operational cost hurts ROI, de-incentivizing on-site generation methods from being considered. A less onerous tariff would improve financial metrics.

Utility requirements for interconnection to the grid are also costly and expensive. Such requirements include transfer trip systems, protective relaying, fault current mitigation, metering, communications systems and isolation transformers. The approval process for this interconnection is equally burdensome and lengthy. A streamlined process for interconnection must be developed.

Utility gas mains must be reinforced if a natural gas-driven co-generation strategy is to be adopted and this too, creates additional costs by the entity installing and operating the onsite generation system. Finally, although on-site generation technologies are incentivized, the steep upfront costs and the long-term operational expenses present a financial burden that far outweighs the incentives. Currently, incentive programmes exist only for grid-connected systems when installed in New York City. New York State Energy Research and Development Authority (NYSERDA) will review off-grid systems for potential incentives, but only on a case-bycase basis. For widespread uptake of on-site generation technologies, in addition to incentives provided for grid connected systems, incentives for systems operating only in island mode must also be made readily available.

The way forward

On-site generation must make sense from a business standpoint.

# Utilities, developers, technology providers, energy consumers, environmental agencies and government must all work together to provide a complete solution that fits the business case.
# Utilities must pay their fair share of costs that are offset by a developer that adds Megawatts (MWs) of power to the grid.
# Technology providers must sell new technology at a fair price.
# Energy consumers must support the effort through conservation of energy, but they also must be willing to pay an additional expense for clean reliable power.
# Environmental agencies must set realistic expectations and not impose the excessive, unattainable.
# Government must lead the change by requiring further incentives (for upfront costs as well as long-term operations) and oversight to ensure transparency among all involved parties.

Written By: 
Sydney Mainster, Sustainability Manager, Royal Realty Corp, The Durst Organization, USA; Philip Skalaski, Vice-President, Engineering and Energy Services, The Durst Organization, USA; and Karole Colangelo, Vice President, Communications, Veolia, USA

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Construction_management]] [[Category:Construction_techniques]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Products_/_components]] [[Category:Property_development]]

Urban mining to reinvent concrete

2017-04-05T12:50:53Z

ISIDORAKOSTA: Created page with "File:IStock-482900860.jpg Evolving the Systemic Health of Concrete: Replacing Cement with Regionally Diverted Post-Consumer Ground Glass Pozzolan The challenge Current mea..."

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Evolving the Systemic Health of Concrete: Replacing Cement with Regionally Diverted Post-Consumer Ground Glass Pozzolan

The challenge

Current means for making concrete at scale do not provide satisfactory feedstock solutions for optimal systemic/life cycle health of this major building material.

Portland cement, a primary binding element in concrete, constitutes 10-15% of a typical concrete mix. In the U.S., 80.4 million tons of cement were produced in 2015, and the average carbon intensity for cement production in the U.S. is estimated at 1 ton CO2 / 1 ton cement. Therefore, though it represents only up to 15% of concrete, cement is responsible for 96% of its CO2 emissions. As a result, for many years now, builders have been replacing cement content in concrete with supplementary cementitious materials (SCMs), industrial by-products like fly ash and ground granulated blast furnace slag, with the intent to reduce the carbon impact of the mix, but also to improve performance of concrete.

While fly ash and slag perform well in concrete, they pose environmental and supply challenges. Slag is a by-product waste from iron smelting used to make steel. Fly ash is a byproduct waste from coal fired electrical power generation. For those seeking to reduce the use of fossil fuels and associated impacts, purchase of fossil fuel by-products like fly ash can pose a conflict, particularly because power plants would otherwise need to pay to landfill this material. There are also concerns about the varying levels of arsenic, cadmium, chromium, mercury, lead, and other potentially toxic contaminants in fly ash.

There have been shortages of domestic slag and resulting price increases due to closure of a number of active U.S. blast furnaces in recent years, so much of the slag available is needing to be transported long distances to point of use in concrete. Similarly, many coal-fired power plants have closed or switched over to natural gas, reducing the amount of domestic fly ash by-product available and often increasing impacts from longer distribution chains.

Meanwhile, amidst the shortages noted above, the U.S. municipal solid waste (MSW) stream contains 11.8-million tons of glass, according to the U.S. Environmental Protection Agency (EPA). About 28%, or 3.3-million tons, of the glass was recovered for recycling, with the remaining 8.5-million tons sent to landfills due to insufficient cost-effective end uses for the glass collected. Many municipalities are even cancelling glass recycling altogether due to lack of effective end uses for recycled glass. Productive, efficient end uses for glass are much needed.

The idea and impact

Recognizing the synergy in the need for: 1. more, and better SCMs in concrete, and 2. optimal end uses for recycled glass, Durst began to explore the potential for “urban mining” of regional recycled glass to supply a much-needed supplementary cementitious material for optimized concrete mixes.

Container glass, plate glass, and E-glass comprise over 90% of the glass produced annually in the United States. About six million tons of the glass available for recycling is flint green and amber container glass, bottles collected via curbside pick-up and central drop-offs. This stream is typically sorted at material recovery facilities to isolate the glass based on colour, for sale to bottle manufacturers. However, about one-third of the glass is finer than 3/8”, which is not economical to optically colour separately. Since it is not necessary to colour separate glass to use as a pozzolan, given it all turns white when ground to proper particle size, this ~1-2 million tons of glass can be readily sourced for cleaning and grinding into use as a pozzolan in concrete. The ongoing total amount will depend largely on consumer glass recycling rates in larger urban communities.

Plate glass is clear or tinted float glass from building glazing and car windshields. Approximately 1.5-2 million tons in the form of window trim, defective factory windshields, and post-consumer windshields and building window glass can be recycled. The major current markets for recycled plate glass are glass spheres used for traffic paint and also for rheology improvement, and it is estimated that 400-500 thousand tons would be available for the glass pozzolan market. This glass can be processed to 99.9% purity, as it does not need to be separated from urban waste stream contaminants.

Last, E-Glass is recovered from the manufacture of fiberglass reinforcements at the factory. It is processed from undrawn fibre waste, and grinds into a pure white powder without any fibre remnants. There are approximately 200,000 tons currently available.

Some combination of the above glass sources is most often regionally available with good potential for minimized transportation radii between generation, sorting, processing, and reuse locations. Also, glass is very dependably uniform in chemistry and contains no heavy metals, which are important considerations for the health, safety and performance of the concrete in which it is used.

Building on the fact that container glass pozzolan has been used successfully in concrete masonry units, and pre-cast plank, and that E-glass pozzolan has been widely used in cement for decorative concrete like swimming pools, there is good precedent for its use in cast in place concrete. Though, the logistical considerations differ.

Codes/standards, infrastructure, supply chains, and mindsets must evolve to integrate ground glass pozzolan supplementary cementitious material into scaled use.

In 2014, The Durst life cycle established Building Product Ecosystems (BPE) as a public/private partnership with City University of New York, The New School, Vidaris Energy and Environmental, and Healthy Building Network, to make systemic improvements to the health of concrete and other high volume building materials. The primary mechanism for BPE progress has been pragmatic monthly working groups, including one for Glass in Concrete. These working groups were established in May 2014, and continue today, through the establishment of Building Product Ecosystems (BPE) as an independent LLC in early 2016, based on a collaborative consulting model.

Via monthly working groups, Building Product Ecosystems continues to gather building owners, designers, engineers, scientists, builders, policy-makers, educators, manufacturers and recyclers to work through the challenges of integrating ground glass pozzolan into the concrete marketplace. In and around these meetings, ongoing dialogues are held among building officials, project team engineers, glass pozzolan makers, and concrete batch plants to best determine what additional laboratory and field testing is needed for approval of this new technology. Forward-thinking pilot projects spearheaded by Durst at Halletts Point, Queens; by NYC Department of Design and Construction in NYC sidewalks; and by Google in Mountain View campus development are being implemented, within the context of active construction to readily vet jobsite logistics.

Thus far, we understand that glass pozzolan has highly uniform chemistry, is free of heavy metals. It produces a higher albedo concrete that is lighter in colour, aiding in suppression of urban heat island warming. It also contributes to effective, consistent strength gain (very similar to fly ash) with favourable low permeability and reduced water demand. Glass pozzolan has also demonstrated ability to mitigate alkali silica reaction. Pours on jobsites have indicated good workability, with no problematic challenges to date.

While glass pozzolan concrete performance and workability are being piloted, the same is true for supply chain and material sourcing logistics. Recycled glass sources are being vetted for volumes, cleanliness, particle sizing and consistency. Processing progress is underway to work with existing or build new equipment that can effectively clean and grind to a consistently clean final product with proper uniform sizing, ready for use. Planning for batch plant silo space allocation to glass pozzolan is also in the works.

To establish quality controls and streamline careful implementation at scale, new ASTM standards are also being iteratively written and balloted within proper committees. This process can take good time, but efforts are being undertaken to expedite progress via frequent meeting and proactive outreach to concerned constituents. Education is also underway with various structural engineering communities and concrete trade life cycles, to ensure the necessary implementable, pragmatic information is widely available.

The way forward

Through a highly collaborative, transparent approach to innovation that is careful but proactive in exploring possibilities for building better buildings and infrastructure it has been possible to learn a great deal and make good progress in a short time Systemic improvements that fully consider cradle to cradle impacts and synergies across sectors will be increasingly possible working together in this fashion.

Written By: 
Amanda Kaminsky, Founder, Building Product Ecosystems (BPE), USA

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Construction_management]] [[Category:Construction_techniques]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Products_/_components]] [[Category:Property_development]]

Flexibility in PPP Contracts: Best practices from countries where Abertis operates

2017-04-05T12:48:26Z

ISIDORAKOSTA: Created page with "File:IStock-504743680.jpg The challenge PPP/Concession contracts (from now on Concession) – long-term agreements to manage public services and/or public assets – requir..."

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The challenge

PPP/Concession contracts (from now on Concession) – long-term agreements to manage public services and/or public assets – require adaptation to new societal, environmental and technical conditions that cannot be foreseen at the time of contract signature.

The idea

Concessions are long-term agreements that generally span more than a decade and require adaptability to the asset life cycle and the different phases of the project. Moreover, concessions have to adapt to innovations and new trends in asset management. These changes usually imply costly renegotiation processes between the administration and the private operators that mostly depend on the political and economic context. In many instances, the contracts are not flexible enough to allow their adaptation to reality, or worse, they depend on the political will and bargaining power of the private sector for renegotiations that are often carried out without the supervision and guarantees required for such processes. Moreover, in many jurisdictions there are legal challenges to the Concession because the legal framework in effect does not deter challenges and allow for their prompt resolution with unpredictable consequences.

Abertis can offer examples that show how investments unforeseen in the initial concession contract can help improve the performance of an asset in a way that benefits public administration, the users and society in general, as well as the operator. The first case is Puerto Rico, which presented a series of road technologies applied to a Concession in 2015/2016. Another example is the French Plan Relance Routier which, through the promotion of private funding, updated and adapted a public infrastructure to economic and environmental needs. Moreover, examples like the Italian and Chilean regulatory and institutional approaches allow for the rebalancing of the economic and financial conditions of the contract. The rebalancing takes place during the five-year update of the business plan or in the case of an extraordinary event that alters the normal course of business.

Abertis promotes technological development, aiming to find solutions for more sustainable and safer transport systems and roads. As a road infrastructure operator, the company has been leading the implementation of free flow technology in toll systems and its interoperability at the national level. Furthermore, different ITS solutions have been developed to improve traffic flow and safety on highways, such as video auditing of the infrastructure. It would be positive to incorporate requirements for innovation and technology investment in Concession and PPP contracts.

In conclusion, there is a need to adapt the contracts to the innovations and new trends that affect the assets and the service they provide to the society. On the basis of our experience, operating in 14 countries for over 30 years, we have identified problems and solutions in dealing with different administrations that could be advocated and incorporated in future contracts.

The impact

To improve the infrastructure and service provided to the society.

The achievements and benefits accumulated over the years from the kind of flexibility supported here can be seen in the following examples that have been implemented in some concessions operated worldwide:

* In Puerto Rico, implementation of a Dynamic toll lane, Open Road Tolling system, bidirectional payment tolls and reversible lanes. The improvements were carried out over a period of four years, and negotiations with the Administrations office for PPP projects allowed for an extension and improvement of the Concession conditions in order to cover the costs incurred in the infrastructure. All the technologies applied represent a good example of innovations in this field, improving the concession levels of service with the supervision of a PPP uninit that has the expertise and power to control the contract and guarantees so that the negotiations are beneficial for all the parties involved.

* In France, the Plan de Relance Autoroutier is a French government initiative spurred by the success of the 2009 Paquet Vert (green package), which raised a substantial amount of private funding to boost the country’s economy, drive sustainability and create jobs in exchange for extensions of up to one year for some French toll road concessions. Both packages were supervised by the EU Commission, to guarantee that the investment is justified in terms of the positive impact in economic terms for society, and that the cost is compensated with a reasonable extension of the Concession.
* In Chile, concession law regulates the system through which the concessionaire may agree with the Ministry of Public Works on modifications to a project that tend to improve service standards. This is translated in Concession contract flexibility, so the concession can be modified through an increase/decrease of tariffs, an extension/reduction of the concession period or a public contribution depending on the economic and financial balance of the Concession.
* In Italy, concessions have a clause that allow for investments aimed at improving the quality of the infrastructure and/or the service given to be rebalanced through tariffs to compensate costs incurred by the operator. This rebalancing also occurs when the level of investment is less than initially estimated, as long as the operator justifies that the investment was not required or that improvements were done with less costs for the operator.

The barriers to innovation – and the solutions

Drawing from the experience mentioned, we identify the barriers in four main areas:

* Technical: At a technical level, there is a need to incorporate the innovation in the Life-Cycle Performance indicators to adapt the investment required in the infrastructure. Current indicators are defined to adjust the investment and cost curves so that the level of quality and service of the infrastructure keeps the level defined in the concession contract. The standard is set at the beginning of the concession depending on the conditions of the asset, the level of economic development, historical reasons, environmental conditions, etc., which will change during the period of the concession. Hence these changes cannot be easily translated in the concession contracts. Moreover, in many instances, the level of investment has to correspond to the phase of the project, which varies during the construction, operation, and when returning the asset to the authorities at the end of the concession. Innovations should also be promoted in the indicators to incentivize the improvement of the concession.
* Regulatory: Regulation of Concessions varies greatly throughout their duration and depending on jurisdiction. Moreover, further requirements depend on the regulations that affect the asset, such as safety, labour or security issues, which in many cases are not contemplated in the concession contract. In some countries, concessions have flexible clauses embedded in the contracts offering guarantees to all the parties involved, as in Chile and Italy, which allows to adjust concessions to the evolution of the market and technologies, offering both flexibility and guarantees. Others do not have this possibility, which makes revisions not viable. In most cases, revisions are quite costly due to the inherent complexity of this type of contract, and the involvement of various parties.
* Political: in some countries, regions and metropolitan areas, public administration questions concessions signed by previous governments of different political hue, making those contracts ineffective and creating uncertainties for the operators. There are cases, such as in Puerto Rico, which have an independent agency with the knowledge, expertise and power to achieve balanced PPP contracts.
* Societal: PPPs and Concessions directly affect society in many ways. It would be fair to let the voice of the population be heard on this type of issue, but this does not always occur in an informed and orderly manner, thus creating many uncertainties. The French case offers the option of débat public (public debate), aiming for a balanced exchange by bringing in experts and promoting research from the various perspectives of the project. This is well funded by the government to coordinate the civil society in order to assess the best way to develop the projects, and to inform all the parties of the full scope of options available.

The way forward

The Abertis experience worldwide shows that in order to facilitate new investment in infrastructure and to improve service level, it is necessary to favour mechanisms that combine the different solutions described above:

* Technical: Adaptable performance-based indicators that incorporate mechanisms promoting innovation and well define the level of service in different phases of the asset, construction, operation and also at the end of the concession
* Regulatory: Embed clauses of progress that guarantee both value for money and the economic and financial balance of the Concession
* Political: Independent PPP unit with know-how of infrastructure and mobility issues and well-resourced, as well as with some political power to influence the decisions. This could be done with the support of a multilateral/supranational entity
* Societal: Creation of well-funded public consultations/hearings/debates similar to those in France, so that different interest groups can benefit from well-informed opinion and balanced debate

Written By: 
Marc Ribo Pedragosa, Senior Economist, Abertis Infraestructuras, Spain and Amanda Marcandali, Engineer, Transportation Infrastructure, Abertis Infraestructuras, Spain

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:International]] [[Category:Projects_and_case_studies]] [[Category:Other_legislation]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Construction_management]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Procurement]] [[Category:Public_procedures]]

Advancing the outcome of challenging infrastructure projects through project alliancing

2017-04-05T12:20:14Z

ISIDORAKOSTA:

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The challenge

The traditional disintegrated and adversarial process does not work appropriately in case of challenging construction projects involving a lot of uncertainty and interfaces.

Traditional project delivery systems do not fully utilise the know-how of the various parties while relatively early fixed solutions and price disallow continuous project development. Constructability and cost awareness of designers is poor and plans put out to competitive tender are not likely to represent the best possible project solution. If there are unknowns left in plans, it may make the tenders even more expensive to the owner when traditional price-oriented selection is applied. Deviations and interpretations on change orders during construction also tend to increase conflicts of interest and adversarial behaviour in projects and be a hindrance to smooth process and success of the project in general.

The challenge remains even if the competence of designers and contractors is utilized synergistically by requesting candidates to complete design proposals as is the case in various types of design-construct procurement methods. Even then the owner is often obliged to limit the leeway necessary for alternative proposals. The primary reason is that degrees of freedom leave too much room for interpretation which may lead to court appeals and subsequent project delays and extra costs in case of public procurements. There is also no time to determine the compliance of alternatives with requirements and regulations in the completion phase. More time is needed for development but it would be too costly with numerous candidate teams. The challenge related to the fixed price is also met in these cases usually.

The uncertainty related to demanding infrastructure projects highlights the problems of traditional project delivery systems. Implementation of projects in the built environment and the many interfaces and interest groups, heavy traffic as well as the demandingness of the arrangements during site work are part of the challenge. As are the uncertainty of conditions and input data and the need to minimise nuisances during construction. Technological development also brings opportunities that are not always known at the launching of a project while it also makes projects more and more complex and challenging underlining the need for new practices.

The idea

Early involvement of service providers in collaborative process with the owner offers a means to improve project outcome in challenging construction projects.

Project alliance is a project delivery method (typically) based on a multi-party contract between the key actors to a project whereby the parties assume joint responsibility for the design and construction of the project (without distinct division of labour) to be implemented through a joint life cycle that includes the owner, the designer(s) and the contractor(s); and where the actors bear both positive and negative risks related to the project jointly, and observe the open-books practice, unanimous decision making and no-litigation principle in pursuing fruitful collaboration. Alliance contracting is, first and foremost, a procurement method for projects that involve a lot of challenge and uncertainty.

The basic idea is that an operational model where risk is borne jointly and reward is shared on the basis of the success of the entire project makes the parties consider each other’s views better and collaborate more efficiently for the best of the project. The method also allows combining a wide range of expertise needed to foster innovation and to make demanding ventures successful. That, again, necessitates early selection of the actors which makes offering services at a fixed price impossible. The solution to that challenge is selection mainly based on a thorough review of team capability while the price may be represented by a fee quote only at this stage.

The procurement is based on the stage-wise negotiated procedure. In the final phase, following the shortlisting and further reduction of candidates based on capability, the best two teams continue to the stage involving workshop tasks that are evaluated. The evaluation forms the basis for selection of the best tenderer jointly with the combined team fee that consists of the designer and contractor company overheads and profit expectations. The member companies of the selected team enter in a ‘development agreement’ with the owner for the design of the project and to set and agree on the project’s target cost and incentive system based on the owner’s key goals. Thereafter the actual ‘implementation contract’ is signed, but only if the parties are able to agree on the project solution and the owner considers the target cost level reasonable. If not, the owner is free to terminate the contract. External review is usually used for the verification of the intended target cost.

The impact

Trustful collaboration between alliance partners has resulted in considerable savings and/or excellent performance in projects in general.

The Finnish Transport Agency (FTA) is a pioneer in developing and applying project alliancing in Europe. Initially the way was prepared by a joint R&D with the VTT Technical Research Centre of Finland launched some ten years ago after VTT has reported alliance experiences from Australia to the predecessors of the FTA. Subsequently, the baton was handed over to Vison Alliance Partners in the deployment phase. The procurement of the first alliance project started in 2010 and since then FTA has utilized the model in a number of projects while it is gaining popularity also outside of FTA. In total, about 40 projects have been or are about to be launched as alliances in Finland so far. In international comparison the field of application is wide-ranging covering vertical and horizontal infrastructure, new construction and refurbishment, and even relatively small and simple projects.

The FTA’s landmark project, by now, is the Tampere lakeshore road tunnel. The development phase of the project took a year and during that a large number of development ideas were born and accepted for immediate use. The total cost saving achieved in the joint development phase was close to 10% although some of the innovations were implemented mainly due to their positive value effects. Numerous major improvements were made in the road plan which would have been unlikely if a disintegrated project delivery system were applied and the generation of joint interest were ignored. The construction plans, including the innovations, were in all respects such that the quality levels of the road plan were to be met: quality or other key goals have not been sacrificed to achieve savings or faster completion.

As to the subsequent implementation phase, the alliance was able to under-run the €180 million target cost and slightly and further shorten the tight schedule for half a year so that the tunnel was opened for traffic after a four-year construction phase. Safety performance was also at very good level. All in all, none of the performance indicator used in the project were negative and it is rather clear that the good performance in many areas is thanks to the incentive system used in the project. Thus, it is not only question of the sharing of cost under- and over-run, but the performance, in accordance with a number of other indicators (e.g. schedule, safety, image, disturbance), also impacted on the payment to service providers.

The barriers to innovation – and the solutions

The change of the culture and new way of thinking is a must and had to be considered carefully in case of applying project alliancing.

Successful realization of an alliance requires that the actors are able to create open and trustful relations which may be a challenge for parties having their background in the traditional ‘zero-sum game’, where one wins at the cost of others. In an alliance parties enter in a multi-party agreement stating ‘we shall do it together’ without clear scopes of liabilities and, therefore, enough time and resources should be reserved and the stakeholders should be trained to understand the alliancing philosophy and, moreover, to carry out the selection and create open and trustful relations. Alliancing requires also deep involvement of the owner’s representatives with decision authority in the alliance (leadership) team.

Another potential barrier may be the lack of comprehensive price competition and the resulting challenge of proving of value for money supplied which may be a problem to probity auditing and general public. Yet, the cost viewpoint is now reflected in the selection through the proposed method for control of the economy, presented budget critique and suggested development possibilities at least. The practice also follows the open books principle as to costs and the phased method as to contracting. The process offers a means to joint mitigation of risks that could be impossible by any of the parties alone. Thus, the target cost is not likely to include risk premiums at the same degree tenders for fixed price contracts tend to do, and change orders do not affect significant cost increase as too often happens in a case of a competitive lump sum contract. Besides, the expectations for innovation are bigger in case of combined expertise and reasonable time reserved for the joint development. In other words, the operational logic of alliancing needs to be understood in full to make it success.

The way forward

The wider use of alliancing together with the modification of traditional processes provides the necessary conditions for the needed cultural change in the industry.

The positive experience gained from the alliance is encouraging for its continuation and extension. Practical formal solutions as to the process and agreements of the alliance have been largely found and standardised as a result of a joint exertion of the industry. Thus, in future, the focus will be on the actors’ cooperation culture and the teamwork practices. As part of this, the lean construction methods and tools are to be utilised more to improve the efficiency, since the joint organisation dispels organisational boundaries and, thus, creates better conditions for that than traditional delivery systems. Also incentive arrangements for the development phase will be considered more although some steps have already been taken also in practice.

Determined use of alliancing is expected to enable the change in the operational culture of the construction sector more widely. It is recognized, however, that project alliance is not for all projects, even though reasonable solutions can be created for diverse projects by adapting alliancing differently. Therefore, one topic for future development is to find out if and how (some of) the features of alliancing can be brought to the traditional delivery systems (even partially) to improve the culture and productivity of the industry as a whole.

Written by, Perti Lahdenperä, Principal Scientist, VTT Technical Research Scientist, Finland; Pekka Petäjäniemi, Director, Liikennevirasto / Trafikverket, (Finnish Transport Agency), Finland and Haghsheno Shervin, Head, Institute for Technology and Management in Construction, Germany

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Education]] [[Category:Organisations]] [[Category:Projects_and_case_studies]] [[Category:Publications_/_reports]] [[Category:Theory]] [[Category:Case_law]] [[Category:Policy]] [[Category:Property_law]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]]

Advancing the outcome of challenging infrastructure projects through project alliancing

2017-04-05T12:18:58Z

ISIDORAKOSTA: Created page with "File:IStock-469641741.jpg The challenge The traditional disintegrated and adversarial process does not work appropriately in case of challenging construction projects invol..."

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The challenge

The traditional disintegrated and adversarial process does not work appropriately in case of challenging construction projects involving a lot of uncertainty and interfaces.

Traditional project delivery systems do not fully utilise the know-how of the various parties while relatively early fixed solutions and price disallow continuous project development. Constructability and cost awareness of designers is poor and plans put out to competitive tender are not likely to represent the best possible project solution. If there are unknowns left in plans, it may make the tenders even more expensive to the owner when traditional price-oriented selection is applied. Deviations and interpretations on change orders during construction also tend to increase conflicts of interest and adversarial behaviour in projects and be a hindrance to smooth process and success of the project in general.

The challenge remains even if the competence of designers and contractors is utilized synergistically by requesting candidates to complete design proposals as is the case in various types of design-construct procurement methods. Even then the owner is often obliged to limit the leeway necessary for alternative proposals. The primary reason is that degrees of freedom leave too much room for interpretation which may lead to court appeals and subsequent project delays and extra costs in case of public procurements. There is also no time to determine the compliance of alternatives with requirements and regulations in the completion phase. More time is needed for development but it would be too costly with numerous candidate teams. The challenge related to the fixed price is also met in these cases usually.

The uncertainty related to demanding infrastructure projects highlights the problems of traditional project delivery systems. Implementation of projects in the built environment and the many interfaces and interest groups, heavy traffic as well as the demandingness of the arrangements during site work are part of the challenge. As are the uncertainty of conditions and input data and the need to minimise nuisances during construction. Technological development also brings opportunities that are not always known at the launching of a project while it also makes projects more and more complex and challenging underlining the need for new practices.

The idea

Early involvement of service providers in collaborative process with the owner offers a means to improve project outcome in challenging construction projects.

Project alliance is a project delivery method (typically) based on a multi-party contract between the key actors to a project whereby the parties assume joint responsibility for the design and construction of the project (without distinct division of labour) to be implemented through a joint life cycle that includes the owner, the designer(s) and the contractor(s); and where the actors bear both positive and negative risks related to the project jointly, and observe the open-books practice, unanimous decision making and no-litigation principle in pursuing fruitful collaboration. Alliance contracting is, first and foremost, a procurement method for projects that involve a lot of challenge and uncertainty.

The basic idea is that an operational model where risk is borne jointly and reward is shared on the basis of the success of the entire project makes the parties consider each other’s views better and collaborate more efficiently for the best of the project. The method also allows combining a wide range of expertise needed to foster innovation and to make demanding ventures successful. That, again, necessitates early selection of the actors which makes offering services at a fixed price impossible. The solution to that challenge is selection mainly based on a thorough review of team capability while the price may be represented by a fee quote only at this stage.

The procurement is based on the stage-wise negotiated procedure. In the final phase, following the shortlisting and further reduction of candidates based on capability, the best two teams continue to the stage involving workshop tasks that are evaluated. The evaluation forms the basis for selection of the best tenderer jointly with the combined team fee that consists of the designer and contractor company overheads and profit expectations. The member companies of the selected team enter in a ‘development agreement’ with the owner for the design of the project and to set and agree on the project’s target cost and incentive system based on the owner’s key goals. Thereafter the actual ‘implementation contract’ is signed, but only if the parties are able to agree on the project solution and the owner considers the target cost level reasonable. If not, the owner is free to terminate the contract. External review is usually used for the verification of the intended target cost.

The impact

Trustful collaboration between alliance partners has resulted in considerable savings and/or excellent performance in projects in general.

The Finnish Transport Agency (FTA) is a pioneer in developing and applying project alliancing in Europe. Initially the way was prepared by a joint R&D with the VTT Technical Research Centre of Finland launched some ten years ago after VTT has reported alliance experiences from Australia to the predecessors of the FTA. Subsequently, the baton was handed over to Vison Alliance Partners in the deployment phase. The procurement of the first alliance project started in 2010 and since then FTA has utilized the model in a number of projects while it is gaining popularity also outside of FTA. In total, about 40 projects have been or are about to be launched as alliances in Finland so far. In international comparison the field of application is wide-ranging covering vertical and horizontal infrastructure, new construction and refurbishment, and even relatively small and simple projects.

The FTA’s landmark project, by now, is the Tampere lakeshore road tunnel. The development phase of the project took a year and during that a large number of development ideas were born and accepted for immediate use. The total cost saving achieved in the joint development phase was close to 10% although some of the innovations were implemented mainly due to their positive value effects. Numerous major improvements were made in the road plan which would have been unlikely if a disintegrated project delivery system were applied and the generation of joint interest were ignored. The construction plans, including the innovations, were in all respects such that the quality levels of the road plan were to be met: quality or other key goals have not been sacrificed to achieve savings or faster completion.

As to the subsequent implementation phase, the alliance was able to under-run the €180 million target cost and slightly and further shorten the tight schedule for half a year so that the tunnel was opened for traffic after a four-year construction phase. Safety performance was also at very good level. All in all, none of the performance indicator used in the project were negative and it is rather clear that the good performance in many areas is thanks to the incentive system used in the project. Thus, it is not only question of the sharing of cost under- and over-run, but the performance, in accordance with a number of other indicators (e.g. schedule, safety, image, disturbance), also impacted on the payment to service providers.

The barriers to innovation – and the solutions

The change of the culture and new way of thinking is a must and had to be considered carefully in case of applying project alliancing.

Successful realization of an alliance requires that the actors are able to create open and trustful relations which may be a challenge for parties having their background in the traditional ‘zero-sum game’, where one wins at the cost of others. In an alliance parties enter in a multi-party agreement stating ‘we shall do it together’ without clear scopes of liabilities and, therefore, enough time and resources should be reserved and the stakeholders should be trained to understand the alliancing philosophy and, moreover, to carry out the selection and create open and trustful relations. Alliancing requires also deep involvement of the owner’s representatives with decision authority in the alliance (leadership) team.

Another potential barrier may be the lack of comprehensive price competition and the resulting challenge of proving of value for money supplied which may be a problem to probity auditing and general public. Yet, the cost viewpoint is now reflected in the selection through the proposed method for control of the economy, presented budget critique and suggested development possibilities at least. The practice also follows the open books principle as to costs and the phased method as to contracting. The process offers a means to joint mitigation of risks that could be impossible by any of the parties alone. Thus, the target cost is not likely to include risk premiums at the same degree tenders for fixed price contracts tend to do, and change orders do not affect significant cost increase as too often happens in a case of a competitive lump sum contract. Besides, the expectations for innovation are bigger in case of combined expertise and reasonable time reserved for the joint development. In other words, the operational logic of alliancing needs to be understood in full to make it success.

The way forward

The wider use of alliancing together with the modification of traditional processes provides the necessary conditions for the needed cultural change in the industry.

The positive experience gained from the alliance is encouraging for its continuation and extension. Practical formal solutions as to the process and agreements of the alliance have been largely found and standardised as a result of a joint exertion of the industry. Thus, in future, the focus will be on the actors’ cooperation culture and the teamwork practices. As part of this, the lean construction methods and tools are to be utilised more to improve the efficiency, since the joint organisation dispels organisational boundaries and, thus, creates better conditions for that than traditional delivery systems. Also incentive arrangements for the development phase will be considered more although some steps have already been taken also in practice.

Determined use of alliancing is expected to enable the change in the operational culture of the construction sector more widely. It is recognized, however, that project alliance is not for all projects, even though reasonable solutions can be created for diverse projects by adapting alliancing differently. Therefore, one topic for future development is to find out if and how (some of) the features of alliancing can be brought to the traditional delivery systems (even partially) to improve the culture and productivity of the industry as a whole.

[[Category:Education]] [[Category:Organisations]] [[Category:Projects_and_case_studies]] [[Category:Publications_/_reports]] [[Category:Theory]] [[Category:Case_law]] [[Category:Policy]] [[Category:Property_law]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]]

The Three Secrets of Great Projects

2017-04-05T12:16:33Z

ISIDORAKOSTA: Created page with "File:IStock-586934950.jpg The background and the challenge Projects today are becoming increasingly complex, with greater demands on efficiency and schedules, as well as gr..."

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The background and the challenge

Projects today are becoming increasingly complex, with greater demands on efficiency and schedules, as well as growing competition. However, quite often, even the most ambitious and well-funded efforts suffer from extensive overruns, long delays and miss realization of expectations, and in some cases, all of these combined. Considering the widespread importance of projects in all industries, it appears that project management practices and techniques do not really meet the challenges of today’s projects, including many in the construction industry.

This insight article presents the results of a study inspired by this challenge. In contrast to other studies, which typically investigate the reasons for project failure, the authors looked at the history of large modern projects – megaprojects – dating back to the 1950s. They have been selected on the basis of multiple criteria such as efficiency, impact on the user/customer, business success and impact on society. Among the projects studied: Apollo moon landing project, Mall of America, the Guggenheim Museum (Bilbao, Spain), the First World Trade Center (Manhattan, USA) the 2012 Olympic Village (London, UK), Los Angeles subway, and Denver International Airport. Not all of these projects were fully successful. Study results show that the most successful projects share a combination three characteristics: clear vision, total alignment and are able to adapt to complexity.

The strategic idea and impact – The three common ingredients for success

In this study, projects were viewed as strategic processes the objective of which is to create value for different stakeholders. This approach is called Strategic Project Leadership® (SPL), whereby success is a broad concept that is measured by several criteria, not time and cost alone. The metrics are as follows:

Table 1: Strategic Multidimensional Success Metrics

{|
|width="20%"|

Success Metric
|width="20%"|Efficiency
|width="20%"|

Impact on

Customer/User
|width="20%"|

Business/Financial

Success
|width="20%"|

Impact on Society
|-
|Measurement
|

Time and costs
|

Customer/User satisfaction, improvement
|

Business profits, return on investment
|

Environment, well-being of society
|}

Strategic Project Leadership® views project leaders as CEOs who are responsible for achieving the expected business results, while leading their teams with high energy and motivation. In sum, project leaders must have both a short- and a long-term perspective. They need to focus on short-term delivery requirements, as well as the economic, environmental, social and political aspects of projects. The study, searched for the common managerial and life cycle elements that enabled meeting the success criteria (metrics) described above.

Clear vision

This vision is an articulation of the end result defined in simple terms that everyone can understand and conceive. It describes the state of the environment concerned after the project is completed, often in visual or even emotional terms. Other kinds of vision also articulate what people will be able to do once the project is completed and how their lives will be affected, improved or simplified. A vision does not deal with profits or financial performance, nor is it described in technical terms. Best visions evoke emotional reactions, such as Kennedy’s vision for the Apollo programme to “put a man on the moon and bring him back before the end of the decade.” The vision of the Mall of America was to “Build the largest and most fun mall in America.” And the first World Trade Center’s was “a commercial and trade center that will revitalize the economy in lower Manhattan.”

Good visions are created by great leaders. They are able to articulate what the project is about – customers know what to expect, sponsors can communicate better what they will create and employees are inspired to be part of it, and clearly understand how they can contribute to its creation.

Full alignment

Full alignment means that all parties identify with and commit to the goals, means and the difficulties expected in the project. Such alignment is difficult to achieve and manage. Since projects involve networks of stakeholders with different interests and agendas, the sponsor and performing life cycles must have a clear and shared understanding of the vision and how to achieve it. Similarly, customers and users are involved upfront, and their voice is being heard and considered. After all, they will be the ones most affected by the project’s success. Finally, a successful project must be aligned with the community and environment in which it operates. Lack of alignment can cause conflicts and delays. One cannot expect to install a large creation in a public place or neighbourhood without the support of all those who may be affected.

Project teams are aware of this need and work hard to achieve such alignment. For example, the managers of the London Olympic village had a coordinated network of contractors using a set of common rules and risk sharing agreements that created a mutual interest for all. Similarly, the builders of the first World Trade Center in Manhattan were managed by the Port Authority, which was also the sponsor of the project. Builders worked closely with New York authorities as well as with many merchant life cycles, restaurants, etc. In contrast, the Los Angeles subway was led as an engineering and technical design-and-build project. While it was created to serve millions of passengers, there was no real connect or alignment with the citizens of the city. No wonder then that when it opened, very few people used it.

Adapting to complexity

We define complexity as a factor that may inhibit the timely completion of a project. Such factors may include size, number of elements and extent of interconnectedness, but they may also include levels of uncertainty or constraints. Uncertainty may be linked to technology, financial markets, policy, economics or the environment. Constraints include restrictions, regulation or limited resources, such as time, people, or money.

Since different projects have varying degrees of complexity, clearly, “one size does not fit all.” The key to success, therefore, is to understand the degree of complexity and adapt the project’s management style to its specific level and kind of complexity. For example, in the Apollo project, NASA understood that going to the moon is extremely complex, risky and uncertain. They put in place numerous mechanisms for thorough examination and testing. Nothing was left to chance and the mindset at the time is reflected in the statement, “It is unsafe to fly, unless there is proof that nothing can go wrong.” In contrast, although the architect of the Sydney Opera House had a clear vision from the outset, the vision was not in tune with the city or the political environment, leading to extensive conflict and unchecked spending. The project team did not anticipate the structure’s complexities and thus, builders only learned at an advanced stage of construction how to produce the orange-shaped roof slices that made its structure so unique.

Barriers, solutions and next steps

Adopting strategic mindsets and processes in project management will take time. It will also require specific methods and tools to plan, execute and review projects. Frank Gehry, the renowned American architect who built the Guggenheim Museum in Bilbao, implemented the full strategic approach, as he does in all of his projects. Gehry insists on acting as the project’s CEO, and on making all the financial and modification decisions. Similarly, the Strategic Project Leadership® approach is applying the new mindset and techniques in several leading companies with great success.

Frequently, the barrier to success is tradition. Most companies still follow traditional approaches and use conventional tools of project management planning. It will not be easy to change mindsets or develop the skills and tools required by this new paradigm. This change will bring additional planning and tools to current methods. It will also educate project teams about this new approach and train young managers from day one to think strategically about their projects and their roles as leaders.

Written By: 
Aaron Shenhar, Chief Executive Officer, The SPL Group, USA and

Vered Holzmann, Chief Executive Officer, DeltaV Project Management, Tel Aviv University, Israel

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Projects_and_case_studies]] [[Category:Health_and_safety_/_CDM]] [[Category:Other_legislation]] [[Category:Planning_permission]] [[Category:Policy]] [[Category:Property_law]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Taxation]]

A new theory for managing large complex projects

2017-04-05T12:10:53Z

ISIDORAKOSTA:

[[File:IStock-486099617.jpg|link=File:IStock-486099617.jpg]]

The challenge

Revolutionary improvements in project execution and delivery are required.

The current theory of project management was developed at a time when projects were more readily decomposed and well bounded. Today’s large complex projects do not demonstrate these characteristics and current project management approaches result in unacceptable project failure rates and high levels of uncertainty with respect to cost and schedule.

Changing the fundamental theory of project management inevitably means that consequent developments need to take place in policy, innovation, legal framework, and knowledge management and education systems in order to reach the full potential of the industry-wide transformation. This insight article aims to identify the areas of the management theory that need to change for the purpose of addressing the complex and innovative needs of infrastructure projects and classifying the areas of practical implementation of this new theory to contemporary and future needs.

In two distinctive parts, this article first analyses the idea behind the need for revolutionary improvements in project management theory and then the impact, the barriers and the way forward for transforming those interests to opportunities for innovation and development.

The idea

A new theory of management of large complex projects.

1. Strengthened project foundations and frameworks

The current theory of project management does not adequately address the unique characteristics of large, complex projects. Project fundamentals are not well founded and some framework processes are either absent, break down at scale or are not adequately addressed. Reinforced project foundations must encompass:

* A heightened and structured focus on owner readiness, not just project readiness. Three aspects must be addressed:
** Strategic Business Outcomes/Objectives (SBOs) must be clearly articulated, agreed to and continuously communicated
** Owner’s framework processes for decision-making and approvals must be strengthened and streamlined
** Project SBOs must be committed to by all owner elements including legal, procurement, contracts and accounts payable
* Project readiness must be further strengthened along the lines of traditional readiness elements but also expanded to ensure SBO alignment and use of big analytics starting from the planning stage
* Project baselines must include an expanded basis of design (BODX) that encompasses not only the traditional basis of design associated with meeting the owner’s project requirements but also:
** A Construction Basis of Design (CBOD) that reflects desired means and methods (prior to the start of design; more than just a constructability review) such that a project is designed to build. Safety is taken to a new level through hazard elimination rather than mitigation during construction. Incorporation of a CBOD changes design packages requiring more granularity in design package definition
** An Operations & Maintenance Basis of Design (O&MBOD) that brings life cycle consideration to the very front end of the project, influencing design choices from the outset rather than seeking to improve the O&M characteristics of a developed design at a later stage.

New technology, including BIM, can readily support this.

* Foundations must further strengthen project baselines, especially for large, complex projects where two out of three fail by recognizing the inadequacy of current risk models that ignore the observed “fat tails” and optimism bias in project performance.
** Risk models must avoid screening out risks prematurely and provide for Monte Carlo risk modelling with “fat-tail” distributions such as a Cauchy distribution
** Assumption capture and tracking to address assumption migration in long duration projects

* Risk focus must be expanded to address:
** White space risks that exist in complexity
** Stakeholder risks which act on today’s more unbounded project
** Changed risk profile associated with data and tool sharing such as seen in shared BIM models

Formal owner readiness assessments are a first step in an improved project initiation process. They precede project readiness activities and new guidance documents must be developed.

Project governance training is required, and adoption of governance principles, distinct from project management, must occur.

Standards and guidance documents related to the use of an expanded basis of design must be developed.

Optimism bias must be addressed through required use of reference class forecasting for cost and schedules on large, complex projects. These can be facilitated by shared industry data and best practices.

Refinement of traditional industry-risk models and modelling to account for risks in complexity and scale as observed in the “fat tail” performance outcomes is required.

An expanded project control focus must be developed, recognizing the inherent risks from stakeholder action/inaction that today’s projects face. The role of big analytics is significant but requires looking at the right data.

New risk models to identify and manage the new risks of collaboration, such as we see emerging in shared BIM models, must be developed.

2. Increased focus on flows, not just the progressively decomposed tasks

Project delivery heavily focuses on decomposing a project into a series of interrelated tasks and then managing the activities within each task. These tasks are reflected on schedules and network diagrams with little arrows showing directional flows. These arrows are not dimensionless and inadequate attention to flows is a significant source of project disruption and degraded performance. Project management must strengthen its focus on flow management by:

* Increased attention to interface identification and management, including identification of underlying constraints which may “couple” otherwise disparate tasks on a project
* Recognition that previously established interface requirements may change as underlying assumptions and conditions migrate over time
* Greater use of “last planner” techniques and improved workface planning from a knowledge-enabled work force
* Use of “knowledge assemblies” that bring together all the informational resources required by a particular task together with the associated computational and analytical tools and methods
* Recognizing the growing importance of flow management as supply chains are more tightly integrated. This is in addition to the flow complexity associated with distributed execution and challenging project logistics both in remote and urban areas.

Development and owner acceptance of big analytics appropriate to support higher-level project delivery requirements must occur.

Development of a knowledge assembly strategy to improve productivity throughout the project delivery process is required as is real-time, dynamic project modelling and management.

3. Recognition of the implications of the unbounded nature of these projects

Today’s largely unbounded project is subject to the debilitating impacts of stakeholder-derived influencing flows that sweep across a project’s semi-permeable boundary, impacting not only the project’s tasks but perhaps more importantly, its various transformational flows. Addressing this challenge requires:

* Development of a new paradigm for project controls that includes equal attention to potentially impacting flows arising from changes outside the project proper. This new paradigm will require increased use of big analytics not only on project performance data but also on a myriad of external data sources. Project controls must also be outward looking.

* Shifting our stakeholder perspective from one of management to one of engagement. This begins by posting outward looking “sentries” (new project control efforts); looking over the horizon with “scouts” to ascertain changes that may lead to potentially impactful influencing flows (big analytics); and finally engaging the broader stakeholder “mesh” that surrounds the project with “ambassadors” who seek to influence stakeholders and control “time”, the rate at which a change unfolds.

Greater project transparency is essential if this engagement is to be successful.

New project control disciplines, training and tools to assess project impacting externalities must evolve.

4. Embracing the use of modern technology

The construction industry has typically been slow to embrace technology, but this is now changing for the good. The use of technology to deliver projects is accelerating and appropriate use of the correct technologies can help to deliver successful projects.

* New construction technology (e.g. autonomous plant, drones, mobile application, smart logistics, sensors, 3D printing) helps improve the efficiency of onsite operations, but it can be argued this is simply the latest development in the ongoing advancement of technical capability. Effective project management must recognize and embrace new technologies as they become mainstream.

* Of more relevance to the issues identified above is the potential for technology to assist and support the processes required for project success. BIM, if used to its full potential, can facilitate the development of stronger project foundations and frameworks and also assist project management teams to understand, organize and optimize the increasingly complex project frameworks, multiple tasks and change. Other technologies that support improved project management and stakeholder engagement also exist.

Notwithstanding the availability of technology it is ultimately the capability and approach of those involved that will determine whether or not a project is successful. Without a new theory of management of large complex projects, as mentioned above, new technology in itself will not make the improvements required.

The Impact

Changes in theory cannot perform on a stand-alone basis. Modern approach in all relevant areas will enhance industry transformation. We have identified five areas that are most impacted and need to change for the purpose of implementing the new project management theory.

1. Impact on policy

Today’s policy frameworks are inconsistent, often providing for disparate and distorted treatment of similar project types from a regulatory, design and financing standpoint. These weak frameworks begin with the very selection frameworks used to prioritize projects from a societal as well as financial perspective.

Improved project selection frameworks to prioritize projects are required. These must encompass commonly accepted prioritization methodologies as well as widely accepted common classes of factors for prioritization. These factors must adopt a strong and well-founded life cycle focus. This is essential if we are to be able to afford the built environment we will require.

A second key framework demanding improvement are those related to codes, standards and regulation. Increasingly these must not just allow for incremental innovation but instead promote broader efforts of innovation and continuous improvement. Performance-based codes, standards and regulations must become the accepted and preferred norm.

Business and financing frameworks that promote life cycle performance must also be put in place and existing ones further strengthened. This strengthening should see enterprise asset management as a life cycle extension of today’s current BIM efforts.

Similarly, debt covenants and accounting standards should treat built assets commonly and with an emphasis on life cycle performance and asset sustainment.

2. Impact on industry-wide systemic innovation

Truly revolutionary improvements in project execution and delivery will require a transformation of industry. In particular, we need to evolve from serial incremental innovation to broader systemic innovation. The latter requires industry to change as a whole, which, in turn, requires common driving forces and enabling frameworks. Specific enabling solutions include:

* Establishing an industry-specific Grand Challenge – An example of a Grand Challenge could be to reduce life cycle costs by 50% and put in place the required skills, education, evaluation methods and metrics
* Strengthening government-sponsored, industry R&D emphasizing life cycle cost reductions and project delivery productivity while incentivizing commercialization
* Creating an industry-sponsored intellectual property commons addressing cost and benefit sharing as well as promoting cross-industry sharing of best practices and lessons learned
* Creating a 10 year R&D tax bonus period for efforts related to life-cycle cost reduction and improvements in construction productivity – An example could be a $2 tax deduction for every $1 spent

3. Impact on legal framework

Currently, various legal, insurance and other financial frameworks may act as unintended barriers to overall improvement in engineering and construction industry improvement. Focusing narrowly on those areas of improvement solely within the control of the engineering and construction industry would be self-limiting with respect to transformational improvements that are desired.

Legal frameworks – laws, regulations, contract forms, dispute resolution guidance – must be modified to reflect changed and changing business models that inherently rely on and encourage closer industry collaboration. We see such closer collaborations developing in a number of different ways including:

* Integrated project delivery
* Design build with designer as a partner not just a subcontractor
* Shared BIM model development by multiple parties including owner/operator O&M staff
* Tighter supply chain integration including direct BIM input
* Long term obligations associated with migration to life cycle contracts (PPP) or life cycle contract performance requirements

Insurance frameworks to support collaborations such as those identified must be created or strengthened.

These modified frameworks must include coverage for the myriad of newly created or modified risks and risk postures.

4. Impact on knowledge: Establishment of industry-wide knowledge sharing frameworks

Revolutionary change and improvement are required within the engineering and construction industry. They must be driven by innovations of all kinds including in how we share and mobilize our collective knowledge. This includes the progressive establishment of industry-wide knowledge-sharing frameworks.

Specifically the engineering and construction industry should consider:

* Establishing an industry best practices forum with user ratings of best practices used (Best practices YELP). Today, best practices are scattered across various industry and academic sites and usability and assessment of outcomes achieved are generally lacking. There is no compendium of best practices sites.
* Creating a construction industry intellectual property commons to promote awareness of valuable knowledge and solutions while protecting the rights of IP holders. Analogs exist in various creative commons and the innovations connection model designed to connect IP creators with commercial innovators.
* Developing a “knowledge assembly” concept that draws all knowledge required for a task together for ready access by a doer of task (knowledge enablement)

5. Impact on education: Improved alignment of education system to emerging industry needs

The engineering and construction industry’s needs are changing and if the transformations that are viewed as necessary are to be realized then the education and skills of our labour force are also going to have to change. Several elements are required for this dimension if change is to be successful and the educational system that serves the industry will also have to change.

Tomorrow’s project managers will require enhanced project management training to recognize the growing need for general and business management skills. Engineering and construction curricula must recognize the growing integration and convergence of these respective disciplines. Education systems must also reintegrate education on tool-making with tool using so that the profession may innovate more directly, reducing reliance on potentially disconnected specialists.

Licensure/certification of project and construction managers must come with a stronger continuing education requirement, comparable to or even more robust than what we require of our engineering professionals.

There must be an increased emphasis on trade schools and craft training to recognize the changing skills needs of tomorrow’s digitally enabled craft worker.

The barriers to implementing change

There are roadblocks to improving these requisite frameworks for success, but they are within our control.

Examples of current roadblocks include:

* Lack of ownership of standard setting for project prioritization
* Resistance to change and entrenched structures of standards setting organizations
* Driving industry supporting change through the financial sector
* Broad embracement of Enterprise Asset Management practices and standards

In addition the above, one principal roadblock to systemic transformation is the current fragmented approach to government-sponsored research with no overarching Grand Challenge, e.g. put a man on the moon.

Looking ahead, among the roadblocks such innovations will face is the multi-jurisdictional nature of laws; no longer fit for purpose precedents enshrined in existing case law; and the inherent difficulties in quantifying new and emerging risks.

Knowledge-sharing frameworks today suffer from the lack of an industry organization to sponsor, create and govern the required industry intellectual property commons. The industry should explore other IP commons that exist in other industries.

In terms of educational barriers, the project management curriculum today under-emphasizes and is not tightly linked with the necessary skills and training found in general management and business schools. Many educational insight articles lack consistent recognition of project management as a professional discipline even while recognition grows for construction management. An emphasis on a college education often sends students to an undifferentiated liberal arts education with limited employment prospects while good-paying jobs are under-filled because of diminishment of trades as a desirable career option.

The way forward

We must transform, not merely improve the future of construction. Systemic innovation will require multiple parts of the industry to transform in tandem. These key transformations will require us to adopt an industry standard on project prioritization methodology and the classes of prioritization factors to be considered (as a minimum). These prioritizations must reflect life-cycle behaviour and requirements.

We must also migrate industry-affecting codes and standards from largely prescriptive standards to performance-based codes and standards. We have done this before in the areas of fire protection and seismic design.

On the financial front we must harmonize debt covenants for asset classes irrespective of source of debt financing. Accounting standards related to these assets must require life cycle cost reporting; and backlog of deferred maintenance and/or replacement values for long-lived assets. Modified accounting treatment of costs classified as capital or routine maintenance for long-lived assets are also required for long-lived assets.

On a more tactical level, today’s BIM systems must integrate seamlessly into tomorrow’s enterprise asset management systems. BIM/EAM integration is essential to support life-cycle management.

Achieving the systemic transformation our industry requires will be significantly aided by establishing an engineering and construction industry Grand Challenge that, in turn, requires improvements by the industry as a whole.

Moreover, industry should promote its research and development capabilities as well as issue a statement announcing its R&D priorities, i.e. industry-driven vs bureaucracy-driven. Knowledge sharing within the industry should be facilitated and barriers removed. One such approach to fostering cross-industry collaboration is the creation of an intellectual property commons.

Government R&D practices and industry tax incentives also need to be aligned with the outcomes that a Grand Challenge seeks to deliver.

To overcome these roadblocks and encourage the required legal and insurance industry evolution, we must create model legislation with supporting documentation related to regulatory “technical” content and contract forms. In essence we must help define best practice.

New dispute-resolution guidelines that may be referenced in contract documents for emerging collaboration type risks are required and should build on the efforts that are underway in a number of jurisdictions.

The re-insurance industry also has the potential to play a key role by creating necessary products to pool these emerging risks and help set standards of good practice.

To achieve the systemic transformation that the engineering and construction industry requires, we must strengthen pan-industry structures and promote increased client recognition of industry IP rights.

The educational system must support the transformation the engineering and construction industry requires. There must be an embracement of Project Management as a discipline (not just CM).

Trade schools must be revitalized and minimum training standards for craft labour broadly established, recognizing that they too are increasingly knowledge workers in a transformed digital industry.

Written By:

Roger Bayliss, Senior Vice-President, Global Operational Efficiency, Skanska, Sweden and Robert Prieto, Chairman and Chief Executive Officer, Strategic Program Management, USA

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Other_legislation]] [[Category:Planning_permission]] [[Category:Policy]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_techniques]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Products_/_components]] [[Category:Property_development]]

A new theory for managing large complex projects

2017-04-05T12:08:28Z

ISIDORAKOSTA: Created page with "File:IStock-486099617.jpg The challenge Revolutionary improvements in project execution and delivery are required. The current theory of project management was developed a..."

[[File:IStock-486099617.jpg]]

The challenge

Revolutionary improvements in project execution and delivery are required.

The current theory of project management was developed at a time when projects were more readily decomposed and well bounded. Today’s large complex projects do not demonstrate these characteristics and current project management approaches result in unacceptable project failure rates and high levels of uncertainty with respect to cost and schedule.

Changing the fundamental theory of project management inevitably means that consequent developments need to take place in policy, innovation, legal framework, and knowledge management and education systems in order to reach the full potential of the industry-wide transformation. This insight article aims to identify the areas of the management theory that need to change for the purpose of addressing the complex and innovative needs of infrastructure projects and classifying the areas of practical implementation of this new theory to contemporary and future needs.

In two distinctive parts, this article first analyses the idea behind the need for revolutionary improvements in project management theory and then the impact, the barriers and the way forward for transforming those interests to opportunities for innovation and development.

The idea

A new theory of management of large complex projects.

1. Strengthened project foundations and frameworks

The current theory of project management does not adequately address the unique characteristics of large, complex projects. Project fundamentals are not well founded and some framework processes are either absent, break down at scale or are not adequately addressed. Reinforced project foundations must encompass:

* A heightened and structured focus on owner readiness, not just project readiness. Three aspects must be addressed:
** Strategic Business Outcomes/Objectives (SBOs) must be clearly articulated, agreed to and continuously communicated
** Owner’s framework processes for decision-making and approvals must be strengthened and streamlined
** Project SBOs must be committed to by all owner elements including legal, procurement, contracts and accounts payable
* Project readiness must be further strengthened along the lines of traditional readiness elements but also expanded to ensure SBO alignment and use of big analytics starting from the planning stage
* Project baselines must include an expanded basis of design (BODX) that encompasses not only the traditional basis of design associated with meeting the owner’s project requirements but also:
** A Construction Basis of Design (CBOD) that reflects desired means and methods (prior to the start of design; more than just a constructability review) such that a project is designed to build. Safety is taken to a new level through hazard elimination rather than mitigation during construction. Incorporation of a CBOD changes design packages requiring more granularity in design package definition
** An Operations & Maintenance Basis of Design (O&MBOD) that brings life cycle consideration to the very front end of the project, influencing design choices from the outset rather than seeking to improve the O&M characteristics of a developed design at a later stage.

New technology, including BIM, can readily support this.

* Foundations must further strengthen project baselines, especially for large, complex projects where two out of three fail by recognizing the inadequacy of current risk models that ignore the observed “fat tails” and optimism bias in project performance.
** Risk models must avoid screening out risks prematurely and provide for Monte Carlo risk modelling with “fat-tail” distributions such as a Cauchy distribution
** Assumption capture and tracking to address assumption migration in long duration projects

* Risk focus must be expanded to address:
** White space risks that exist in complexity
** Stakeholder risks which act on today’s more unbounded project
** Changed risk profile associated with data and tool sharing such as seen in shared BIM models

Formal owner readiness assessments are a first step in an improved project initiation process. They precede project readiness activities and new guidance documents must be developed.

Project governance training is required, and adoption of governance principles, distinct from project management, must occur.

Standards and guidance documents related to the use of an expanded basis of design must be developed.

Optimism bias must be addressed through required use of reference class forecasting for cost and schedules on large, complex projects. These can be facilitated by shared industry data and best practices.

Refinement of traditional industry-risk models and modelling to account for risks in complexity and scale as observed in the “fat tail” performance outcomes is required.

An expanded project control focus must be developed, recognizing the inherent risks from stakeholder action/inaction that today’s projects face. The role of big analytics is significant but requires looking at the right data.

New risk models to identify and manage the new risks of collaboration, such as we see emerging in shared BIM models, must be developed.

2. Increased focus on flows, not just the progressively decomposed tasks

Project delivery heavily focuses on decomposing a project into a series of interrelated tasks and then managing the activities within each task. These tasks are reflected on schedules and network diagrams with little arrows showing directional flows. These arrows are not dimensionless and inadequate attention to flows is a significant source of project disruption and degraded performance. Project management must strengthen its focus on flow management by:

* Increased attention to interface identification and management, including identification of underlying constraints which may “couple” otherwise disparate tasks on a project
* Recognition that previously established interface requirements may change as underlying assumptions and conditions migrate over time
* Greater use of “last planner” techniques and improved workface planning from a knowledge-enabled work force
* Use of “knowledge assemblies” that bring together all the informational resources required by a particular task together with the associated computational and analytical tools and methods
* Recognizing the growing importance of flow management as supply chains are more tightly integrated. This is in addition to the flow complexity associated with distributed execution and challenging project logistics both in remote and urban areas.

Development and owner acceptance of big analytics appropriate to support higher-level project delivery requirements must occur.

Development of a knowledge assembly strategy to improve productivity throughout the project delivery process is required as is real-time, dynamic project modelling and management.

3. Recognition of the implications of the unbounded nature of these projects

Today’s largely unbounded project is subject to the debilitating impacts of stakeholder-derived influencing flows that sweep across a project’s semi-permeable boundary, impacting not only the project’s tasks but perhaps more importantly, its various transformational flows. Addressing this challenge requires:

* Development of a new paradigm for project controls that includes equal attention to potentially impacting flows arising from changes outside the project proper. This new paradigm will require increased use of big analytics not only on project performance data but also on a myriad of external data sources. Project controls must also be outward looking.

* Shifting our stakeholder perspective from one of management to one of engagement. This begins by posting outward looking “sentries” (new project control efforts); looking over the horizon with “scouts” to ascertain changes that may lead to potentially impactful influencing flows (big analytics); and finally engaging the broader stakeholder “mesh” that surrounds the project with “ambassadors” who seek to influence stakeholders and control “time”, the rate at which a change unfolds.

Greater project transparency is essential if this engagement is to be successful.

New project control disciplines, training and tools to assess project impacting externalities must evolve.

4. Embracing the use of modern technology

The construction industry has typically been slow to embrace technology, but this is now changing for the good. The use of technology to deliver projects is accelerating and appropriate use of the correct technologies can help to deliver successful projects.

* New construction technology (e.g. autonomous plant, drones, mobile application, smart logistics, sensors, 3D printing) helps improve the efficiency of onsite operations, but it can be argued this is simply the latest development in the ongoing advancement of technical capability. Effective project management must recognize and embrace new technologies as they become mainstream.

* Of more relevance to the issues identified above is the potential for technology to assist and support the processes required for project success. BIM, if used to its full potential, can facilitate the development of stronger project foundations and frameworks and also assist project management teams to understand, organize and optimize the increasingly complex project frameworks, multiple tasks and change. Other technologies that support improved project management and stakeholder engagement also exist.

Notwithstanding the availability of technology it is ultimately the capability and approach of those involved that will determine whether or not a project is successful. Without a new theory of management of large complex projects, as mentioned above, new technology in itself will not make the improvements required.

The Impact

Changes in theory cannot perform on a stand-alone basis. Modern approach in all relevant areas will enhance industry transformation. We have identified five areas that are most impacted and need to change for the purpose of implementing the new project management theory.

1. Impact on policy

Today’s policy frameworks are inconsistent, often providing for disparate and distorted treatment of similar project types from a regulatory, design and financing standpoint. These weak frameworks begin with the very selection frameworks used to prioritize projects from a societal as well as financial perspective.

Improved project selection frameworks to prioritize projects are required. These must encompass commonly accepted prioritization methodologies as well as widely accepted common classes of factors for prioritization. These factors must adopt a strong and well-founded life cycle focus. This is essential if we are to be able to afford the built environment we will require.

A second key framework demanding improvement are those related to codes, standards and regulation. Increasingly these must not just allow for incremental innovation but instead promote broader efforts of innovation and continuous improvement. Performance-based codes, standards and regulations must become the accepted and preferred norm.

Business and financing frameworks that promote life cycle performance must also be put in place and existing ones further strengthened. This strengthening should see enterprise asset management as a life cycle extension of today’s current BIM efforts.

Similarly, debt covenants and accounting standards should treat built assets commonly and with an emphasis on life cycle performance and asset sustainment.

2. Impact on industry-wide systemic innovation

Truly revolutionary improvements in project execution and delivery will require a transformation of industry. In particular, we need to evolve from serial incremental innovation to broader systemic innovation. The latter requires industry to change as a whole, which, in turn, requires common driving forces and enabling frameworks. Specific enabling solutions include:

* Establishing an industry-specific Grand Challenge – An example of a Grand Challenge could be to reduce life cycle costs by 50% and put in place the required skills, education, evaluation methods and metrics
* Strengthening government-sponsored, industry R&D emphasizing life cycle cost reductions and project delivery productivity while incentivizing commercialization
* Creating an industry-sponsored intellectual property commons addressing cost and benefit sharing as well as promoting cross-industry sharing of best practices and lessons learned
* Creating a 10 year R&D tax bonus period for efforts related to life-cycle cost reduction and improvements in construction productivity – An example could be a $2 tax deduction for every $1 spent

3. Impact on legal framework

Currently, various legal, insurance and other financial frameworks may act as unintended barriers to overall improvement in engineering and construction industry improvement. Focusing narrowly on those areas of improvement solely within the control of the engineering and construction industry would be self-limiting with respect to transformational improvements that are desired.

Legal frameworks – laws, regulations, contract forms, dispute resolution guidance – must be modified to reflect changed and changing business models that inherently rely on and encourage closer industry collaboration. We see such closer collaborations developing in a number of different ways including:

* Integrated project delivery
* Design build with designer as a partner not just a subcontractor
* Shared BIM model development by multiple parties including owner/operator O&M staff
* Tighter supply chain integration including direct BIM input
* Long term obligations associated with migration to life cycle contracts (PPP) or life cycle contract performance requirements

Insurance frameworks to support collaborations such as those identified must be created or strengthened.

These modified frameworks must include coverage for the myriad of newly created or modified risks and risk postures.

4. Impact on knowledge: Establishment of industry-wide knowledge sharing frameworks

Revolutionary change and improvement are required within the engineering and construction industry. They must be driven by innovations of all kinds including in how we share and mobilize our collective knowledge. This includes the progressive establishment of industry-wide knowledge-sharing frameworks.

Specifically the engineering and construction industry should consider:

* Establishing an industry best practices forum with user ratings of best practices used (Best practices YELP). Today, best practices are scattered across various industry and academic sites and usability and assessment of outcomes achieved are generally lacking. There is no compendium of best practices sites.
* Creating a construction industry intellectual property commons to promote awareness of valuable knowledge and solutions while protecting the rights of IP holders. Analogs exist in various creative commons and the innovations connection model designed to connect IP creators with commercial innovators.
* Developing a “knowledge assembly” concept that draws all knowledge required for a task together for ready access by a doer of task (knowledge enablement)

5. Impact on education: Improved alignment of education system to emerging industry needs

The engineering and construction industry’s needs are changing and if the transformations that are viewed as necessary are to be realized then the education and skills of our labour force are also going to have to change. Several elements are required for this dimension if change is to be successful and the educational system that serves the industry will also have to change.

Tomorrow’s project managers will require enhanced project management training to recognize the growing need for general and business management skills. Engineering and construction curricula must recognize the growing integration and convergence of these respective disciplines. Education systems must also reintegrate education on tool-making with tool using so that the profession may innovate more directly, reducing reliance on potentially disconnected specialists.

Licensure/certification of project and construction managers must come with a stronger continuing education requirement, comparable to or even more robust than what we require of our engineering professionals.

There must be an increased emphasis on trade schools and craft training to recognize the changing skills needs of tomorrow’s digitally enabled craft worker.

The barriers to implementing change

There are roadblocks to improving these requisite frameworks for success, but they are within our control.

Examples of current roadblocks include:

* Lack of ownership of standard setting for project prioritization
* Resistance to change and entrenched structures of standards setting organizations
* Driving industry supporting change through the financial sector
* Broad embracement of Enterprise Asset Management practices and standards

In addition the above, one principal roadblock to systemic transformation is the current fragmented approach to government-sponsored research with no overarching Grand Challenge, e.g. put a man on the moon.

Looking ahead, among the roadblocks such innovations will face is the multi-jurisdictional nature of laws; no longer fit for purpose precedents enshrined in existing case law; and the inherent difficulties in quantifying new and emerging risks.

Knowledge-sharing frameworks today suffer from the lack of an industry organization to sponsor, create and govern the required industry intellectual property commons. The industry should explore other IP commons that exist in other industries.

In terms of educational barriers, the project management curriculum today under-emphasizes and is not tightly linked with the necessary skills and training found in general management and business schools. Many educational insight articles lack consistent recognition of project management as a professional discipline even while recognition grows for construction management. An emphasis on a college education often sends students to an undifferentiated liberal arts education with limited employment prospects while good-paying jobs are under-filled because of diminishment of trades as a desirable career option.

The way forward

We must transform, not merely improve the future of construction. Systemic innovation will require multiple parts of the industry to transform in tandem. These key transformations will require us to adopt an industry standard on project prioritization methodology and the classes of prioritization factors to be considered (as a minimum). These prioritizations must reflect life-cycle behaviour and requirements.

We must also migrate industry-affecting codes and standards from largely prescriptive standards to performance-based codes and standards. We have done this before in the areas of fire protection and seismic design.

On the financial front we must harmonize debt covenants for asset classes irrespective of source of debt financing. Accounting standards related to these assets must require life cycle cost reporting; and backlog of deferred maintenance and/or replacement values for long-lived assets. Modified accounting treatment of costs classified as capital or routine maintenance for long-lived assets are also required for long-lived assets.

On a more tactical level, today’s BIM systems must integrate seamlessly into tomorrow’s enterprise asset management systems. BIM/EAM integration is essential to support life-cycle management.

Achieving the systemic transformation our industry requires will be significantly aided by establishing an engineering and construction industry Grand Challenge that, in turn, requires improvements by the industry as a whole.

Moreover, industry should promote its research and development capabilities as well as issue a statement announcing its R&D priorities, i.e. industry-driven vs bureaucracy-driven. Knowledge sharing within the industry should be facilitated and barriers removed. One such approach to fostering cross-industry collaboration is the creation of an intellectual property commons.

Government R&D practices and industry tax incentives also need to be aligned with the outcomes that a Grand Challenge seeks to deliver.

To overcome these roadblocks and encourage the required legal and insurance industry evolution, we must create model legislation with supporting documentation related to regulatory “technical” content and contract forms. In essence we must help define best practice.

New dispute-resolution guidelines that may be referenced in contract documents for emerging collaboration type risks are required and should build on the efforts that are underway in a number of jurisdictions.

The re-insurance industry also has the potential to play a key role by creating necessary products to pool these emerging risks and help set standards of good practice.

To achieve the systemic transformation that the engineering and construction industry requires, we must strengthen pan-industry structures and promote increased client recognition of industry IP rights.

The educational system must support the transformation the engineering and construction industry requires. There must be an embracement of Project Management as a discipline (not just CM).

Trade schools must be revitalized and minimum training standards for craft labour broadly established, recognizing that they too are increasingly knowledge workers in a transformed digital industry.

Written By: 
Roger Bayliss, Senior Vice-President, Global Operational Efficiency, Skanska, Sweden and Robert Prieto, Chairman and Chief Executive Officer, Strategic Program Management, USA

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Other_legislation]] [[Category:Planning_permission]] [[Category:Policy]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_techniques]] [[Category:Contracts_/_payment]] [[Category:Cost_/_business_planning]] [[Category:Procurement]] [[Category:Products_/_components]] [[Category:Property_development]]

International Infrastructure Support System (IISS)

2017-04-05T12:06:24Z

ISIDORAKOSTA:

[[File:IStock-508853388.jpg]]

The challenge

The global demand for infrastructure investment is estimated at about $3.7 trillion annually. In developing countries, it is driven by growing population, economic growth, urbanization, environment constraints and industrialization. Population growth, migration from rural to urban areas and the rise of a middle class of consumers will in combination create vastly greater needs for transportation, energy, water, waste management and telecommunications. The high demand is not being met, not due to the enormous financing need, but to the lack of institutional capacity and poor project preparation. IISS is an effective way of addressing this issue.

Historically, much of the initiative and the funding for infrastructure have been considered to be the responsibility of government. Today, the debt burden is limited to government investment capacity but investment capital is currently abundant (institutional, sovereign wealth funds, permanent funds, family offices and private equity firms). How can the investment needs and the constraints of lenders and fund providers be matched? By preparing better projects, to acquire the confidence of investors and lenders. Interest alignment between users, concessionaires and owners is essential to successful outcomes. The private parties engaged in infrastructure financing and development need to understand the peculiarities of each local project and institutional context, and how policy and regulatory frameworks both enable and circumscribe the value that these projects can deliver over their life cycle. This is where guidelines for better project preparation and stakeholder information are needed. Not only is there a direct need for better educating the public sector and policy-makers at large about the realities of infrastructure development, but also the importance must be emphasized of having informed owners who are technically sophisticated and have the ability to think ahead through the entire project life cycle. This underscores the crucial importance of effective project preparation and the role it plays in project bankability.

The idea – International Infrastructure Support System (IISS)

IISS offers governments a global standard – reliable, secured and user- friendly project preparation software to maximize public-sector user financing options – including PPPs – by providing well-prepared projects in a consistent and transparent way to the international community of contractors, investors and lenders.

IISS was first developed by the Asian Development Bank (AsDB) in 2010 and, since 2013, has been further refined and managed by the Sustainable Infrastructure Foundation (SIF). IISS today is a global platform supported by major MDBs[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftn1 [1]] and international financial institutions (IFIs). Its Strategic Partners Committee consists of the International Monetary Fund, the Organisation for Economic Cooperation and Development, the World Economic Forum and other global life cycles.

IISS gives public-sector agencies an unmatched and tailored software service that integrates:

* Online workspace (including data storage/life cycle and communications)
* Project management tools
* World-class, sub-sector specific infrastructure project preparation templates

The IISS integrated web-based software service was designed and piloted by the MDBs so that it could help public-sector agencies to:

* Capture, manipulate, share and manage early project concept data in a scalable and effective manner
* Identify and inform about gaps to be addressed in project planning and preparation
* Identify and inform about project risks that governments will need to mitigate
* Provide a scalable approach for project development and preparation methodology that is systematic and consistent across locations and sectors

* Provide links to marketing and funding resources to help facilitate project investment

* Provide a forum for engaging market participants and project stakeholders
* Present shovel-ready infrastructure projects pipelines to the market

Since the global launch in January 2016, IISS has been focusing efforts on developing its user database by training more than 100 government officials from over 10 developing nations. IISS continues to exceed all expectations with now more than 260 active users, 54 projects currently on IISS for a value estimated at over $15 billion and 18 governments using the platform. It contains over 30 templates that address different sub-sectors of infrastructure, covering detailed questions on governance, technical, legal, financial, environmental and social aspects, among others.

The barriers to innovation

The key barriers for implementing the proposed solution to the global dilemma include language, IT developments and the limited capacity of SIF to respond to the high user demands for new features, templates, available languages and rising demand for more training and support to governments.

SIF is currently operating at limited financial capacity (slow-growth case). It is estimated that by 2020, a total of 550 projects will be uploaded and published on IISS. This does not meet the demand from MDBs and users to upload a minimum of 2,000 projects on IISS by 2020, translate IISS into a further 12 languages, develop 50 extra sub-sector templates and train up to 80 more countries on the use of IISS software.

Solutions to overcome the barriers

To overcome these challenges, SIF must aim to operate at an accelerated rate (accelerated roll-out case), whereby sufficient financing must be provided to SIF to meet the growing number of user requests, develop more templates, features, training and a provide a higher level of support to governments.

Possible solutions developed include:

* MDBs, having already collaborated and provided seed capital to design and launch IISS, are now seeking bilateral partners and/or donors to provide financial support for SIF, to continue the development of IISS at an accelerated rate.
* SIF is currently developing a number of revenue models to become self-sustainable in the long-term. One such model is private-sector user access; provided via sign up/registration functionality[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftn2 [2]] to access published projects and other features such as, but not limited to, alerts highlighting projects of interest; ability to search by sector, location, specific stage, third-party reviewer and estimated capital cost; and email alerts during the project preparation phase. In addition, SIF is developing the licensing model for users and an online/onsite training model.

The way forward

IISS has proven to be a rapidly evolving tool that has radically improved the quality of public-sector project preparation outputs and increased the chances of well-prepared projects securing financing from a wider set of sources. In the next financial year, SIF aims to train more governments on the use of IISS, grow the IISS user database from 260 users to 500, upload and publish more projects on IISS.

[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftnref1 [1]] Multilateral Development Banks: African Development Bank, Asian Development Bank, Banco de Desarrollo de America Latina, European Bank for Reconstruction and Development, Inter-American Development Bank, Islamic Development Bank, and World Bank Group

[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftnref2 [2]] No access will be privileged and no confidential information will be provided through this process.

Written By:

Christophe Dossarps, Director, Hub for Innovative Partnership, United Nations Development Programme (UNDP), Geneva

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]] [[Category:Roles_/_services]]

International Infrastructure Support System (IISS)

2017-04-05T12:05:56Z

ISIDORAKOSTA: Created page with " The challenge The global demand for infrastructure investment is estimated at about $3.7 trillion annually. In developing countries, it is driven by growing population, econom..."

The challenge

The global demand for infrastructure investment is estimated at about $3.7 trillion annually. In developing countries, it is driven by growing population, economic growth, urbanization, environment constraints and industrialization. Population growth, migration from rural to urban areas and the rise of a middle class of consumers will in combination create vastly greater needs for transportation, energy, water, waste management and telecommunications. The high demand is not being met, not due to the enormous financing need, but to the lack of institutional capacity and poor project preparation. IISS is an effective way of addressing this issue.

Historically, much of the initiative and the funding for infrastructure have been considered to be the responsibility of government. Today, the debt burden is limited to government investment capacity but investment capital is currently abundant (institutional, sovereign wealth funds, permanent funds, family offices and private equity firms). How can the investment needs and the constraints of lenders and fund providers be matched? By preparing better projects, to acquire the confidence of investors and lenders. Interest alignment between users, concessionaires and owners is essential to successful outcomes. The private parties engaged in infrastructure financing and development need to understand the peculiarities of each local project and institutional context, and how policy and regulatory frameworks both enable and circumscribe the value that these projects can deliver over their life cycle. This is where guidelines for better project preparation and stakeholder information are needed. Not only is there a direct need for better educating the public sector and policy-makers at large about the realities of infrastructure development, but also the importance must be emphasized of having informed owners who are technically sophisticated and have the ability to think ahead through the entire project life cycle. This underscores the crucial importance of effective project preparation and the role it plays in project bankability.

The idea – International Infrastructure Support System (IISS)

IISS offers governments a global standard – reliable, secured and user- friendly project preparation software to maximize public-sector user financing options – including PPPs – by providing well-prepared projects in a consistent and transparent way to the international community of contractors, investors and lenders.

IISS was first developed by the Asian Development Bank (AsDB) in 2010 and, since 2013, has been further refined and managed by the Sustainable Infrastructure Foundation (SIF). IISS today is a global platform supported by major MDBs[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftn1 [1]] and international financial institutions (IFIs). Its Strategic Partners Committee consists of the International Monetary Fund, the Organisation for Economic Cooperation and Development, the World Economic Forum and other global life cycles.

IISS gives public-sector agencies an unmatched and tailored software service that integrates:

* Online workspace (including data storage/life cycle and communications)
* Project management tools
* World-class, sub-sector specific infrastructure project preparation templates

The IISS integrated web-based software service was designed and piloted by the MDBs so that it could help public-sector agencies to:

* Capture, manipulate, share and manage early project concept data in a scalable and effective manner
* Identify and inform about gaps to be addressed in project planning and preparation
* Identify and inform about project risks that governments will need to mitigate
* Provide a scalable approach for project development and preparation methodology that is systematic and consistent across locations and sectors

* Provide links to marketing and funding resources to help facilitate project investment

* Provide a forum for engaging market participants and project stakeholders
* Present shovel-ready infrastructure projects pipelines to the market

Since the global launch in January 2016, IISS has been focusing efforts on developing its user database by training more than 100 government officials from over 10 developing nations. IISS continues to exceed all expectations with now more than 260 active users, 54 projects currently on IISS for a value estimated at over $15 billion and 18 governments using the platform. It contains over 30 templates that address different sub-sectors of infrastructure, covering detailed questions on governance, technical, legal, financial, environmental and social aspects, among others.

The barriers to innovation

The key barriers for implementing the proposed solution to the global dilemma include language, IT developments and the limited capacity of SIF to respond to the high user demands for new features, templates, available languages and rising demand for more training and support to governments.

SIF is currently operating at limited financial capacity (slow-growth case). It is estimated that by 2020, a total of 550 projects will be uploaded and published on IISS. This does not meet the demand from MDBs and users to upload a minimum of 2,000 projects on IISS by 2020, translate IISS into a further 12 languages, develop 50 extra sub-sector templates and train up to 80 more countries on the use of IISS software.

Solutions to overcome the barriers

To overcome these challenges, SIF must aim to operate at an accelerated rate (accelerated roll-out case), whereby sufficient financing must be provided to SIF to meet the growing number of user requests, develop more templates, features, training and a provide a higher level of support to governments.

Possible solutions developed include:

* MDBs, having already collaborated and provided seed capital to design and launch IISS, are now seeking bilateral partners and/or donors to provide financial support for SIF, to continue the development of IISS at an accelerated rate.
* SIF is currently developing a number of revenue models to become self-sustainable in the long-term. One such model is private-sector user access; provided via sign up/registration functionality[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftn2 [2]] to access published projects and other features such as, but not limited to, alerts highlighting projects of interest; ability to search by sector, location, specific stage, third-party reviewer and estimated capital cost; and email alerts during the project preparation phase. In addition, SIF is developing the licensing model for users and an online/onsite training model.

The way forward

IISS has proven to be a rapidly evolving tool that has radically improved the quality of public-sector project preparation outputs and increased the chances of well-prepared projects securing financing from a wider set of sources. In the next financial year, SIF aims to train more governments on the use of IISS, grow the IISS user database from 260 users to 500, upload and publish more projects on IISS.

[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftnref1 [1]] Multilateral Development Banks: African Development Bank, Asian Development Bank, Banco de Desarrollo de America Latina, European Bank for Reconstruction and Development, Inter-American Development Bank, Islamic Development Bank, and World Bank Group

[https://futureofconstruction.org/solution/international-infrastructure-support-system-iiss/#_ftnref2 [2]] No access will be privileged and no confidential information will be provided through this process.

Written By: 
Christophe Dossarps, Director, Hub for Innovative Partnership, United Nations Development Programme (UNDP), Geneva

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Procurement]] [[Category:Property_development]] [[Category:Public_procedures]] [[Category:Roles_/_services]]

Unprecedented innovation and new technologies on the horizon

2017-04-05T12:03:47Z

ISIDORAKOSTA:

[[File:IStock-509172467.jpg]]

The challenge

To stay “ahead of the curve” with respect to innovation in an industry that has historically lagged behind others. With P3s as a predominant model in the delivery of large, complex projects with 30-year concession periods, innovations will undeniably have an impact on such contractual agreements.

As the construction and infrastructure development industry has evolved, broadening into the energy and mining sectors, it has become increasingly important to first, monitor and have keen insight into emerging technologies, and second, understand how these innovations may impact business, especially in terms of corporate values, productivity, project management, safety, and operation and maintenance agreements.

The lightning speed with which our world continues to evolve due to year-over-year advances and convergences in technology, such as artificial intelligence, 3D printing, robotics, nanotechnology resulting in exoskeletons, drones and automated equipment, has conditioned an approach to start thinking differently. Up to this point, employing the latest technologies has largely been functional rather than visionary. However, it is now more important than ever to focus on being at the sharp end of this modern-day technological convergence and take advantage of innovation opportunities.

As innovations – often disruptive technologies – come about, they will likely change the very context and operating model of projects. It won’t be “if” projects adopt the technology, as the travelling public will demand it and it will be up to the industry to be responsive. This will result in changing contracts, and ultimately the demand for changing infrastructure. As an example, in 1905, the introduction of the Ford Model T disrupted the use of the horse and carriage as the primary mode of transportation. Consequently, infrastructure such as dirt roads saw increased demand to be converted to asphalt. Moving forward, with the introduction of automated vehicles as an analogous disruptive technology, infrastructure will have to evolve significantly once again.

The idea

The industry must incorporate flexibility in P3 concession contracts without sacrificing risk transfer and value for money for clients.

The way forward

Future innovations to help build things that matter.

In light of recent announcements by Canada’s federal government to commit over $160 billion to infrastructure development, an unprecedented level of opportunity awaits, but with this come challenges. The use of automated vehicles is an innovation on the near horizon and promises to be an integral part of the infrastructure matrix.

The pressure of innovation coupled with consumer demand will prompt infrastructure developers to deliver roadway architecture technology to optimize the use of automated vehicles. For example, one-passenger automated vehicles could result in lanes having to become smaller and every traffic signal being equipped with a radio for communicating with cars, which would phase out road signage. Additionally, there could be increased demand for charging point infrastructure as well as automated vehicles-only zones in urban centres.

With respect to planning and procurement, the public-private partnership (P3) structured infrastructure industry will need to ensure that the above-mentioned demands are addressed, as part of the output specifications, and that impact studies are completed for every infrastructure project. This understanding of the risks incentivizes behaviours from the private sector, to ensure that projects are on time and on budget, but also that they incorporate potential shifts in infrastructure technologies. This flexibility in output specifications should ensure that original value for money and risk transfer is not compromised.

P3s Then and Now

In the 1990s, there were only 14 projects over 15 years, mostly social infrastructure projects, completed with a P3 framework in Canada. Since then, the pace has picked up significantly and dedicated agencies were set up such as Infrastructure Ontario (IO), Partnerships BC, as well as quasi agencies within transportation departments.

The key value proposition brought by this innovation is the private-sector role in targeting design, construction, maintenance and operation, based on user performance specifications, in a holistic, whole-life-cycle Net Present Value (NPV) basis.

P3s have arguably been a disruptive innovation that transformed the procurement model for delivering large complex infrastructure projects. Private-sector innovation is a key value proposition of P3s. Through innovation, companies such as Aecon have transformed themselves from purely performing construction or engineering services, to getting involved in financing, maintenance and operation. There is increased involvement in equity, construction and maintenance, which has meant new business lines/revenues opening up within existing companies. The key drivers for the P3 value proposition include:

# Performance-based specifications
# integration of design, construction maintenance and operations
# risk allocation
# private finance

All four mechanisms are important in delivering innovation. The key driver to providing a holistic, whole-life-cycle, lowest-NPV approach, however, is the move towards output performance specifications, rather than the traditional input specifications. Disruptive technologies will impact infrastructure development, especially in light of the 30-year life cycle of such infrastructure assets. As an industry, it is vital to optimize innovations to prevent costly change orders in the coming years.

The approach at Aecon

Enabling a corporate-wide culture of innovation.

To create a culture of innovation across the company and provide a forum to facilitate its advancement, Aecon has established an Innovation Council. The Council consists of members from all segments (infrastructure, energy, mining, concessions and corporate), all geographies (for proper governance), in order to incentivize behaviour and leverage technology. The Council meets quarterly and its goal is three-fold:

# To ensure that innovation-related activities across each segment are strategically aligned, coordinated and supported by appropriate processes and resources
# To evaluate and recommend innovation proposals that will improve the efficiency and productivity of existing business offerings or lead to additional business opportunities
# To create and reinforce a culture of innovation

For a proposed idea to gain traction, it must first align with the core values and overall business strategy. The first step is for members to present a supportive business case to the Council’s executive committee, to determine if the idea merits study or development. A green light at this stage triggers resources to further study the innovation and/or fund its implementation. The Council ensures that both current and new concepts get out to everybody so that repetition of mistakes is avoided. The ability to leverage valuable knowledge and lessons learned to early adopters across the company reduces redundancy and creates process efficiencies.

An imperative for success for any company is innovation. Whether using new technologies available to create further efficiencies and improve safety, or forecasting the business implications of future technologies, it is important to stay ahead of the curve and operate proactively.

Conclusion

As the construction industry increasingly takes on operation and maintenance responsibilities in 30-year term contracts, it is imperative that advances in technology are considered and flexibility built into contracts to ensure appropriate risk transfer and continued value for money.

Written By:

John Beck, President and Chief Executive Officer, Aecon Group, Canada,

Matthew Kattapuram, Senior Vice-President, Strategic Business Development, Aecon Group, Canada,

Steve Nackan, President, Aecon Concessions, Canada

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Other_legislation]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_management]] [[Category:Design]] [[Category:Procurement]] [[Category:Products_/_components]] [[Category:Public_procedures]]

Unprecedented innovation and new technologies on the horizon

2017-04-05T12:03:04Z

ISIDORAKOSTA: Created page with " The challenge To stay “ahead of the curve” with respect to innovation in an industry that has historically lagged behind others. With P3s as a predominant model in the del..."

The challenge

To stay “ahead of the curve” with respect to innovation in an industry that has historically lagged behind others. With P3s as a predominant model in the delivery of large, complex projects with 30-year concession periods, innovations will undeniably have an impact on such contractual agreements.

As the construction and infrastructure development industry has evolved, broadening into the energy and mining sectors, it has become increasingly important to first, monitor and have keen insight into emerging technologies, and second, understand how these innovations may impact business, especially in terms of corporate values, productivity, project management, safety, and operation and maintenance agreements.

The lightning speed with which our world continues to evolve due to year-over-year advances and convergences in technology, such as artificial intelligence, 3D printing, robotics, nanotechnology resulting in exoskeletons, drones and automated equipment, has conditioned an approach to start thinking differently. Up to this point, employing the latest technologies has largely been functional rather than visionary. However, it is now more important than ever to focus on being at the sharp end of this modern-day technological convergence and take advantage of innovation opportunities.

As innovations – often disruptive technologies – come about, they will likely change the very context and operating model of projects. It won’t be “if” projects adopt the technology, as the travelling public will demand it and it will be up to the industry to be responsive. This will result in changing contracts, and ultimately the demand for changing infrastructure. As an example, in 1905, the introduction of the Ford Model T disrupted the use of the horse and carriage as the primary mode of transportation. Consequently, infrastructure such as dirt roads saw increased demand to be converted to asphalt. Moving forward, with the introduction of automated vehicles as an analogous disruptive technology, infrastructure will have to evolve significantly once again.

The idea 
The industry must incorporate flexibility in P3 concession contracts without sacrificing risk transfer and value for money for clients.

The way forward 
Future innovations to help build things that matter.

In light of recent announcements by Canada’s federal government to commit over $160 billion to infrastructure development, an unprecedented level of opportunity awaits, but with this come challenges. The use of automated vehicles is an innovation on the near horizon and promises to be an integral part of the infrastructure matrix.

The pressure of innovation coupled with consumer demand will prompt infrastructure developers to deliver roadway architecture technology to optimize the use of automated vehicles. For example, one-passenger automated vehicles could result in lanes having to become smaller and every traffic signal being equipped with a radio for communicating with cars, which would phase out road signage. Additionally, there could be increased demand for charging point infrastructure as well as automated vehicles-only zones in urban centres.

With respect to planning and procurement, the public-private partnership (P3) structured infrastructure industry will need to ensure that the above-mentioned demands are addressed, as part of the output specifications, and that impact studies are completed for every infrastructure project. This understanding of the risks incentivizes behaviours from the private sector, to ensure that projects are on time and on budget, but also that they incorporate potential shifts in infrastructure technologies. This flexibility in output specifications should ensure that original value for money and risk transfer is not compromised.

P3s Then and Now

In the 1990s, there were only 14 projects over 15 years, mostly social infrastructure projects, completed with a P3 framework in Canada. Since then, the pace has picked up significantly and dedicated agencies were set up such as Infrastructure Ontario (IO), Partnerships BC, as well as quasi agencies within transportation departments.

The key value proposition brought by this innovation is the private-sector role in targeting design, construction, maintenance and operation, based on user performance specifications, in a holistic, whole-life-cycle Net Present Value (NPV) basis.

P3s have arguably been a disruptive innovation that transformed the procurement model for delivering large complex infrastructure projects. Private-sector innovation is a key value proposition of P3s. Through innovation, companies such as Aecon have transformed themselves from purely performing construction or engineering services, to getting involved in financing, maintenance and operation. There is increased involvement in equity, construction and maintenance, which has meant new business lines/revenues opening up within existing companies. The key drivers for the P3 value proposition include:

# Performance-based specifications
# integration of design, construction maintenance and operations
# risk allocation
# private finance

All four mechanisms are important in delivering innovation. The key driver to providing a holistic, whole-life-cycle, lowest-NPV approach, however, is the move towards output performance specifications, rather than the traditional input specifications. Disruptive technologies will impact infrastructure development, especially in light of the 30-year life cycle of such infrastructure assets. As an industry, it is vital to optimize innovations to prevent costly change orders in the coming years.

The approach at Aecon 
Enabling a corporate-wide culture of innovation.

To create a culture of innovation across the company and provide a forum to facilitate its advancement, Aecon has established an Innovation Council. The Council consists of members from all segments (infrastructure, energy, mining, concessions and corporate), all geographies (for proper governance), in order to incentivize behaviour and leverage technology. The Council meets quarterly and its goal is three-fold:

# To ensure that innovation-related activities across each segment are strategically aligned, coordinated and supported by appropriate processes and resources
# To evaluate and recommend innovation proposals that will improve the efficiency and productivity of existing business offerings or lead to additional business opportunities
# To create and reinforce a culture of innovation

For a proposed idea to gain traction, it must first align with the core values and overall business strategy. The first step is for members to present a supportive business case to the Council’s executive committee, to determine if the idea merits study or development. A green light at this stage triggers resources to further study the innovation and/or fund its implementation. The Council ensures that both current and new concepts get out to everybody so that repetition of mistakes is avoided. The ability to leverage valuable knowledge and lessons learned to early adopters across the company reduces redundancy and creates process efficiencies.

An imperative for success for any company is innovation. Whether using new technologies available to create further efficiencies and improve safety, or forecasting the business implications of future technologies, it is important to stay ahead of the curve and operate proactively.

Conclusion

As the construction industry increasingly takes on operation and maintenance responsibilities in 30-year term contracts, it is imperative that advances in technology are considered and flexibility built into contracts to ensure appropriate risk transfer and continued value for money.

Written By: 
John Beck, President and Chief Executive Officer, Aecon Group, Canada,

Matthew Kattapuram, Senior Vice-President, Strategic Business Development, Aecon Group, Canada,

Steve Nackan, President, Aecon Concessions, Canada

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Other_legislation]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_management]] [[Category:Design]] [[Category:Procurement]] [[Category:Products_/_components]] [[Category:Public_procedures]]

Scoping project approach in the developing world

2017-04-05T12:00:39Z

ISIDORAKOSTA: Created page with "File:IStock-517716450.jpg The challenge Misalignment of design cultures handicaps infrastructure in the developing world. Many developing countries lack a clear engineerin..."

[[File:IStock-517716450.jpg]]

The challenge

Misalignment of design cultures handicaps infrastructure in the developing world.

Many developing countries lack a clear engineering and construction culture. These countries receive loans and grants from donor countries and multi-lateral development banks. Yet, the consistent pipeline of funds is not enough to nurture need for a local engineering and construction (E&C) culture. Such a culture would guide elements such as the level of design expected by construction contractors and the inclusion of regional/local characteristics and constraints.

As a result, owners receive insufficient feasibility and design work. Public utilities especially expect design professionals to produced documents appropriate for the market. However, the design staff is rarely local. Most work in developed countries and have never been to site or worked in the developing context. They do not understand the local or regional market and sometimes such a market doesn’t exist. They defer to processes, habits and characteristics of the developed environments they know best. This leads to specifications not suited for the location, drawings that assume too much from the contractors and Invitations for Bids that the market cannot respond to substantively.

The ultimate outcome is a mismatch of E&C philosophies between the contracted parties. This often requires more design, delayed works, delayed site access, confusion and additional cost and time to the owner and/or lender.

Given the many challenges faced by the developing world to successfully accomplish infrastructure projects, it would benefit owners and designers to address fundamental questions early in scoping and feasibility. These most basic questions (e.g. defining the amount of design sufficient for the market) are not asked but assumed. A manual can guide designers to better understand their clients’ most elementary conditions. Such an application can ensure not only a more effective construction phase (match the right contractors to the right work) but also consider characteristics to operations, maintenance and ultimately decommissioning.

The idea

A concise manual of questions to address common misunderstandings

The approach to address the challenge is a concise process manual. The document’s purpose is to guide the owner to understand their requirements when seeking design services and guide a scoping and/or feasibility phase meeting with the designer. It will help participants uncover ambiguity in bias and better define information required to bring a project through the phases of design, construction, operations and maintenance.

A model to this manual already exists in the United Kingdom’s Green Book. The Green Book, focused on Public-Private Partnerships, asks a series of investigative questions into order to assess the validity and readiness of a PPP arrangement. It highlights areas for improvement before investment action is committed.

Like the Green Book, the manual’s components will be investigative criteria as well as definitions on common ambiguity. For example, the term “bid ready design” has different meanings across the world. In North America that means a level of design not requiring further design by the Contractor. In the European tradition this can mean significant design by the contractor for a traditional construction project. In the South African tradition the bid level requires significant just in time designs from the designer during construction. Now imagine an international development project with professionals from all these traditions. It is an ample environment for confusion, chaos and blame. The benefit of the manual will be to focus attention on these differences early so that professionals can act with clear understanding and intention of one another.

The impact

If successful, there can be significantly less confusion, delay and additional cost during the construction period.

Normally, contractors price in risk to their bid; however, in the technically acceptable lowest bid often used in the developing world, it is less advantageous to the bidder if they want to win. It is common for works to grind to a halt while contractors wait for additional design, access to site and/or resettlement of project affected people. This new design and idle time provides opportunity for claims and compensation. As a result the projects lose focus and relationships between parties become adversarial.

This manual will direct the owner and design professionals to address the common pitfalls of work in the development context. The project team will better know the type and level of design required for the market actors available. They will be able to choose an appropriate project delivery approach for the asset and engage earlier in a discussion with the market during scoping and feasibility.

The barriers to innovation – and the solutions

This will not be a new process, but elaboration of an existing process.

Three barriers must be overcome for implementation; that is perceptions of project validity, additional time and additional bureaucracy. First is the perception that this issue is not real or easily overcome in project elaboration. However, the Millennium Challenge Corporation, the World Bank and many owners and developers have experienced delays and costs increases as a result of poor alignment with the market. A logical argument using expert and implementation experiences can successfully lay out the call for action.

The second barrier and third barriers are closely related. That is additional evaluation is more work and delays implementation. Everyone has experienced more bureaucracy as a result of errors made. This approach leads to onerous and ad-hoc actions to mitigate a reoccurrence and often not effectively. This effort instead comprehensively addresses many integrated challenges while not adding another process. This is better definition to the existing processes of scoping and feasibility. The time and budget spent in front end planning will return greater savings in implementation.

The way forward

Develop, Pilot and Iterate

This paper represents the earliest conception of the idea. The most effective way forward is first a donor to fund the development of a draft manual with iterative input from other donor life cycles. The lead developer should be in a position to pilot the use of the manual and incorporate those lessons into the first edition.

Written By: 
Mark Tkach, Director Infrastructure, Millennium Challenge Corporation (MCC), USA

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

Project controls in a post-BIM world

2017-04-05T11:58:47Z

ISIDORAKOSTA: Created page with "File:IStock-540226428.jpg The Challenge Major projects require the mobilization of large design teams, which are often in multiple locations and time zones. The challenge f..."

[[File:IStock-540226428.jpg]]

The Challenge

Major projects require the mobilization of large design teams, which are often in multiple locations and time zones. The challenge for the project manager is to have visibility on design and coordination progress and see where the blocks are that are impeding design finalization.

This is further complicated in a Building Information Model (BIM) world where the final 2D deliverable is not seen until the end of the coordination process for a given phase. Traditionally, the project manager would track progress of 2D deliverables through the draw, check, review and approval processes and quantify this to have an earned value analysis of progress. In a complex BIM model, this is a progressive process that is extremely difficult to track based on hard gate reviews.

The project manager also needs to control the information flow from the various sources to ensure all issues are captured and addressed. As project teams acquire more technology, it is getting more difficult to capture all that is required and ensure that appropriate control measures are in place.

A related challenge is “model sharing” either with the client or other design consultants. Sharing work-in-progress (WIP) models releases all of a consultant’s current design information, putting their Intellectual Property Rights (IPR) at risk.

Early sharing of WIP opens the door to client remarks about the quality or progress of incomplete design and possibly, other premature and unwanted comments as well. Even though the consultant has clearly indicated the status of the design, highlighting clashes or errors is a human trait. Responding to the criticism – generally, that the comments will be addressed later in the design phase – adds to the consultant’s already heavy workload, but also places significant demands on senior consultants who must manage client expectations and misconceptions.

The Idea

Create a web-based database that captures all design issues in a common platform, assigns them to design team members for action and tracks their closure.

Atkins needed a “single source of truth” platform that could host all design related issues whether these were identified using Navisworks, PDF drawing reviews (such as BlueBeam), Skype chats, coordination workshops or client meetings. As well as hosting the information in a database, Atkins wanted to gather key metadata and assign it to individuals so they had a single point of accountability for resolving each issue.

Atkins has developed an in-house database, the “Atkins Design Coordination Manager” (DCM), which allows design teams to generate accurate automated reports to track progress in real time. This compares to the numerous excel progress trackers and exchange of emails that were used before the DCM tool was launched.

Behaviour

We need to address the behavioural issues around BIM, particularly related to sharing WIP models with other consultants and clients.

Clients traditionally received the final product for comment, following an internal check/review/approval process. Progress was generally reported on a monthly basis, in a formal way.

However, in a BIM world, clients want to see the model progressing through the different phases and technology allows this to happen automatically and if design teams and clients collaborate, clients are able to see the live model. Unfortunately, human behaviour has not changed in spite of the technology and clients still expect to receive information that is perfect. Design teams are aware of the development process and the chaos that often ensues from a major change in the model and need to educate clients and other interfaces to avoid misunderstandings and poor communication, although this requires significantly more senior management time.

The Impact

All design team members can see the number of open issues and the project manager can track progress of closure on issues.

The tool is live and gives authorized team members immediate access to current issues, resolution status and snap shots of the relevant model to describe the issues. The project manager can interrogate the database, see trends in issue closure, identify appropriate staff and then take corrective action.

An added benefit is that it avoids sharing issues in an ad hoc way, e.g. via email or other informal communication medium and significantly reduces the volume of emails or data on a project. It also prevents issues from being overlooked, as once they are in the database, they must be closed.

Atkins has piloted the system on a complex metro project in Qatar and had excellent feedback from the design team. The team is now using the system on more projects, which will enable it to capture more metrics, observe trends and create benchmarks.

The Barriers to Innovation – and the Solutions

The next step is to share the tool with external design consultants involved in the project and with the client, but this will require mutual trust and clarification of IPR.

The internal barriers are related to trust between teams, as the tool enhances visibility of issues for all levels and could be used to measure the performance of each team, or individuals. However, this is seen as a benefit to the project manager, as it allows him/her to take early corrective action.

External barriers partially concern trust, but can also be legal. Trust implies allowing competitors to see internal issues and allowing clients to have visibility of daily progress. This could be addressed by limiting external access only to those issues that relate to third-party stakeholders, but this is still under development.

The legal issues relate to the ownership and hosting of the data, for BIM data, but also the database itself.

The Way Forward

Development of the in-house tool will continue to make it available to more design teams in the group, while thinking is refined about how to share the tool externally.

Atkins are in the process of updating the tool to address the issues and concerns raised by the pilot as well as creating guidance materials for new users.

Behavioural training for the project team, other consultants and the client will be required once access is given to third parties to avoid extensive premature comments on WIP design models.

Written By: 
Philip Todd, Group Managing Director, Major Projects, WS Atkins, United Kingdom,

Ian Redmayne, Project Director, WS Atkins, United Kingdom and

Bisrat Defenga, Integration Manager, Mergers & Acquisitions, WS Atkins, United Kingdom,

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

[[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Cost_/_business_planning]] [[Category:Design]]

Forecasting future performance with confidence

2017-04-05T11:54:53Z

ISIDORAKOSTA: Created page with "File:IStock-509686834.jpg Written By: Roger Bayliss, Senior Vice-President, Global Operational Efficiency, Skanska, Sweden This article was originally published on t..."

[[File:IStock-509686834.jpg]]

Written By: 
Roger Bayliss, Senior Vice-President, Global Operational Efficiency, Skanska, Sweden

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

Expanding the use of lessons learned to the global project environment

2017-04-05T11:52:46Z

ISIDORAKOSTA: Created page with "File:IStock-512331310.jpg The challenge Restricting lessons-learned data to primary, in-house stakeholders significantly reduces their effectiveness and limits their potent..."

[[File:IStock-512331310.jpg]]

The challenge

Restricting lessons-learned data to primary, in-house stakeholders significantly reduces their effectiveness and limits their potential benefit to project improvement.

Failure to learn from one’s or others’ mistakes guarantees they will be repeated. Lessons-learned programmes are implemented to prevent this repetition, ensuring that formal and informal knowledge and experience are effectively collected and shared.

However, lessons-learned programmes often contain confidential, proprietary or unique knowledge-based practices. This knowledge, which owners have paid a substantial cost to cultivate, can provide significant advantage to competitors. Furthermore, lessons learned can impact the perception of a company. The documented experiences, both good and bad, can be perceived as a reflection of the company’s ownership, management, or guiding principles. This can affect valuation, employee morale and hiring and recruiting practices. These knowledge assets, gained from long years of execution experience, are a considerable part of a company’s success.

As a result, most lessons-learned programmes are normally only available to a small group of primary, in-house stakeholders. This reduces their effectiveness, stifling efficiency and impacting project success. To fully recognize and capture their benefit, the communication of lessons-learned programmes must be extended to all relevant stakeholders. The communication, however, must occur only in such a way that it does not jeopardize the company’s investment or unnecessarily benefit its competitors.

The idea

Enhance lessons-learned platforms to encompass internal and external stakeholders and to sanitize the data without losing the value of the lesson.

Experiential knowledge comes from many sources. It can come from the owner, operator, constructor, designer, supplier, manufacturer, and the project management team, to name a few. Failure to capture the knowledge from these global project sources is failure to fully realize the value of all available assets.

Therefore, lessons-learned programmes must be enhanced to capture all pertinent information, and ensure that it is easily accessible to the right people, at the right time, in ways that measurably improve performance. This requires a well-defined process that is facilitated by appropriate technological infrastructure. The process mandates the inclusion of all appropriate stakeholders, internal and external, while the infrastructure actively supports and ensures that the requisite knowledge is readily accessible when needed and collectible when generated. Furthermore, both the process and the infrastructure must have the ability to sanitize sensitive information without reducing the value of the lesson.

Enhancing the platform allows life cycles to significantly expand the pool of knowledge resources from which lessons are drawn. Additionally, it allows a life cycle to share its own knowledge assets with its contractors, designers, suppliers, etc., resulting in a more efficient project development and execution process. The impact will be decreased costs, condensed schedules, improved communication, and a reduction in rework and costly, repeated mistakes.

Mature lessons-learned programmes are a hallmark of project delivery life cycles that implement a continuous improvement strategy. Therefore, the basis for the expanded process should be in place for the majority of life cycles. Granting access to all stakeholders, and supplying the infrastructure to allow that access, should be a relatively simple IT exercise. Proper sanitization of the existing database and new lessons will require more significant research and evaluation.

The impact

Knowledge-based assets, and their proven competitive advantage, are seen as a key step to addressing how evolving market conditions are shifting the focus of project execution from schedule attainment to capital efficiency.

Lessons-learned programmes preserve institutional knowledge and communicate experience that can potentially reduce project risk and improve efficiency and performance. Optimizing their effectiveness, and maximizing their use, are key to realizing their ultimate value. This optimization will translate into savings across the entire project, and facility, life cycle.

The expansion of the pool of stakeholders provides several advantages to the lessons-learned process. First, increasing the resource pool will increase the number and scope of available lessons. Extending beyond the owner’s focus to include design and construction contractors, manufacturers and suppliers, inspection, safety, quality, etc. will facilitate the capture of knowledge that goes beyond mere project execution. Second, sharing a life cycle’s lessons learned with all project stakeholders will increase their opportunity for use not only in the project, but in the life cycle of the facility. Finally, it is easy for internal stakeholders, particularly owner/operators, to become myopic: our way is the best way. By including external agencies that are often forced by business conditions to be on the cusp of competitiveness and efficiency, the latest improvements, techniques and processes can be captured at little to no expense for the proponent life cycle.

The barriers to innovation – and the solutions

If knowledge transfer is to be successful, there must be an openness and richness in the communication of information and knowledge.

Crucial knowledge gained from a project is not always documented or communicated for subsequent use. Furthermore, knowledge-based practices can be unique, difficult to quantify and can become life cycle embedded over time. The result is that lessons learned, if done, are often resisted or only done superficially as their value is not widely recognized as contributing to project success.

This lack of recognition or valuation, particularly among internal stakeholders, must be changed to implement an effective programme. Methods for evaluating and measuring the effectiveness of the life cycle lessons-learned programme should be established such that the costs and benefits of the programme can be assessed on a periodic basis. This will allow management to monitor, improve and illustrate the value that lessons learned provide to the life cycle.

This same value must then be communicated to external stakeholders. Past history has indicated an unwillingness by contractors to participate in owner’s lessons learned programmes. This is in part due to the contracting arrangements between the primary stakeholder groups and the dynamics between them. Contract types reflect the risk allocation strategies used and extent of trust and cooperation between the parties, often at the expense of joint performance goals.

In addition, all relevant stakeholders should have ready access to lessons learned. Internal restrictions, contractor accessibility, firewalls and network connectivity should all be addressed with the intent of facilitating the free flow of information. Furthermore, the lessons and access media should be responsive and tailored to customer needs. This includes a user-friendly interface, simple search strategies, and a common language and framework. Lessons learned read capability should be essentially unlimited for internal users and limited only by safeguard concerns for external stakeholders.

Finally, criteria must be established and enforced regarding levels of access and distribution for external stakeholders. Lessons learned must be reviewed for compliance with company guidelines and security requirements prior to approval and dissemination. They must be sanitized to ensure they cannot impact the perception or opinion of the company and its operating philosophy. The programme, and its support infrastructure, must include proper systems integration, interface coordination, and access control and monitoring functions to ensure legal and contractual requirements are adhered to.

The way forward

While the value of individual knowledge is innate, only through sharing does it add value to the life cycle.

To realize the full value of the lessons-learned process, it is necessary to include all project stakeholders. Their inclusion must be facilitated by the owner life cycle to gain external stakeholders trust and buy-in. The value inherent in the process, to both owner and contractor, must be communicated and fully understood by all.

Furthermore, broader use of lessons learned should be mandated. Implementation and collection processes should take place at each project phase rather than at project end. There should be automatic and immediate dissemination of high-value or high-impact lessons rather than waiting for the next phase sessions. Lessons learned should also continually evaluate improvements to identify favourable or adverse programmatic trends. The results of such analysis should be used to focus improvement efforts and reduce adverse tendencies.

Finally, the key to achieving success is full management commitment from all life cycles. There should be motivation, recognition and continuous feedback on the process and its impact on the life cycle. Its use must go beyond a best practice and become an operational philosophy.

Written By: 
Syed Mateen Akhtar, Project Execution Optimization Division, Project Management Office Department, Saudi Aramco, Saudi Arabia

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog]

Understanding uncertainty for performance improvement

2017-04-05T11:50:37Z

ISIDORAKOSTA:

[[File:IStock-515604620.jpg|link=File:IStock-515604620.jpg]]

The challenge

Every project is subject to uncertainty. It might be simple estimate uncertainty or much more complicated threats that may alter the planned progression of work. Uncertainty is an inevitable aspect of most projects, especially those with more complex programmes, and even the most experience managers have difficulty handling it. They use decision milestones to anticipate outcomes and risk management to prevent disasters and make sure everyone is making the desired product. However, in most cases the project still ends up with an overrun schedule, overflowing budget and compromised specifications.

How can the design-construction gap be mitigated to improve project performance? How can we resolve some of the most critical types of uncertainty, such as unforeseen site conditions, design errors and omissions in final construction documents, owner-driven programme or design changes, among others?

The idea

Start early, integrate quickly and work together as a whole.

Several solutions and building methods have been tested to reduce uncertainties on projects, and in most cases, it has been possible to achieve a successful balance when collaboration and communication among team members are improved, especially in projects with highly complex programmes.

Also, on projects of high complexity, it is no longer sufficient to merely know the project cost, the owner must know how the project will be paid for and integrate that knowledge into the scope of work, due to the direct impact on the project design, and speed with which the project can be delivered, especially on the public sector, since the public in nowadays wants greater accountability in how we spend their money.

Summarizing, the idea is to implement new mechanisms, and fine-tune existing ones, to mitigate the top-drivers that cause major uncertainty in most projects, such as:

* Clearer direction from owners
* More active leadership by owners
* More integration between design and build parties during design and construction
* Clearer definition of deliverables between parties during the design process
* Team selection criteria not based primarily on low fee
* Use of construction manager (CM) as contractor
* Use of integrated project delivery (IPD) contracts
* Use of BIM and other online virtual design tools by the entire project team
* Budget contingency in the owner’s budget to accommodate design errors and omissions, to reduce uncertainty

The impact

Construction is not an exact science.

More integration and better communication are key factors, and the most effective mitigating factors against overall uncertainty. For instance, a design-bid-build method, by engaging trade contractors in a design assist role, is where we can find highest success rates in reducing uncertainty.

One of the top-divers of uncertainty-related problems, are owner-driven changes and unclear direction, as well as design errors and omissions. Therefore, more integration between all parties is highly advisable.

It is unrealistic to expect that on high complex projects, all owners fully understand design and construction processes well enough to provide accurate guidance and perfect leadership. Design and construction teams need to make an effort to understand the final end user requirements, and provide a better-informed design to the owner stakeholders, which will generate less disruptive stakeholder changes. Also, design and construction teams need to realize that their clients are often dealing with a range of internal stakeholders, which causes huge disruptions, and frequently leads to a scope, budget and schedule changes during the project life cycle.

On design-bid-build projects, by engaging trade contractors in design early stages, has proved to be successful for some owners, and to the project quality, due to intensive collaboration between all parties to avoid unanticipated problems in the field, and it also provides to the owner, especially the public one, the knowledge and technical support to better define scope, budget and schedule.

As an exampe, when Saraiva + Associados, a leading architectural firm, designed the new Loures Central Hospital in Lisbon, following a public competition conducted by the Ministry of Health, in a Design-Bid-Build-Operate process, due to the complex programme of such a building, the entire clinical operation, design and construction team worked together as a whole with all owner-stakeholders from the most initial stages of the project. This enabled a full scope review, to allow those requirements to be incorporated into the design during th eprogramming and concept design phase. Also, virtual coordination was used, by using Acconex platform and BIM, which was very effective to mitigate uncertainty, increase Communication, Collaboration and Integration, to improve project performance. This enabled a 70,000 m2 and 420-bed hospital to fully open to public in January 2012 when the design started in June 2009.

During the programming, design and construction process of Loures Central Hospital, four major mitigating elements were used:

* Documents: Detailed construction drawings with no significant errors or omissions
* Early Collaboration: A collaborative approach with involvement by operator, contractor and the entire project team in early design
* Issue Resolution: Clear process for project team members for dealing with issues that arise during design and construction
* Shared Liability: A collaborative approach with shared liability across the project team, contractor and building operator

Also, with such a complex project, the owner was forced to set the budget at a very early stage and then literally develop the detailed scope of work within the constraints set by available financing, with the support of the winning consortium. Thus, in these specific cases and complex programmes, financing drives the project scope.

The barriers to innovation – and the solutions

A problem anticipated is a problem half solved.

It is clear that to improve project performance and reduce uncertainty, the owner must have at his disposal the ability and means to assemble and engage a proper team, in the early stages. However, projects financed with public funds, unless some of the local and international legislation is changed and adapted, public owners will continue to face serious challenges to develop and provide perfect information at the outset.

It is also clear that, the use of BIM by the design and construction teams is very effective in mitigating uncertainty through virtual coordination and digital fabrication, and will also help to decrease communication between all parties. However, technology doesn’t improve communication on a human level between members of the project team, since frequently they tend to avoid difficult conversations about potential conflicts, causing high rates of change.

The whole way of thinking and acting has to be changed, by integrating new technologies at our disposal in a more efficient way, as well as the current legislation has to be amended and adapted to enable better communication via technology to help deucing costs of change.

The way forward

An informed and active owner solves a lot of problems in the project.

Overall the tries to provide empirical insight into the actual use of uncertainty and risk management approaches that are currently being used by owners, project managers and the design team.

Only a minority of owners and their project managers, implement uncertainty and risk management approaches and processes since the early design stages, even some of the most complex projects.

Therefore, on the basis of past experience, on projects perceived as complex some of the following key areas need to be improved:

* Stakeholder/ client/ customer/ sponsor involvement, with more integration and better communication management processes
* Better risk identification, assessment and planning needs to be done prior at the outset of the project
* Focused uncertainty and risk management training and education from the owner side
* Engage and Use of appropriate expertise
* The development of a lessons learned database and industry specific guidelines

Uncertainty and risk are fundamental aspects in the management of projects for performance improvement. It is critical to overcome some of the barriers that have been blocking the ability of the owner, in particular the public one, to implement uncertainty and risk management key approaches, as well as improving communication lines. Unless some of these barriers are overcome, risk management planning, identification, assessment, response planning and monitoring will not be truly effective.

Also, changes to socio-legal factors are crucial, to enable the owner to engage appropriate expertise, essential in managing uncertainty on projects.

Written By: 
Tiago Guerra Founder and Managing Partner, TG International, Portugal

This article was originally published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Organisations]] [[Category:Publications_/_reports]] [[Category:Standards_/_measurements]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Procurement]] [[Category:Products_/_components]]

Understanding uncertainty for performance improvement

2017-04-05T11:47:54Z

ISIDORAKOSTA: Created page with "File:IStock-515604620.jpg The challenge Every project is subject to uncertainty. It might be simple estimate uncertainty or much more complicated threats that may alter the..."

[[File:IStock-515604620.jpg]]

The challenge

Every project is subject to uncertainty. It might be simple estimate uncertainty or much more complicated threats that may alter the planned progression of work. Uncertainty is an inevitable aspect of most projects, especially those with more complex programmes, and even the most experience managers have difficulty handling it. They use decision milestones to anticipate outcomes and risk management to prevent disasters and make sure everyone is making the desired product. However, in most cases the project still ends up with an overrun schedule, overflowing budget and compromised specifications.

How can the design-construction gap be mitigated to improve project performance? How can we resolve some of the most critical types of uncertainty, such as unforeseen site conditions, design errors and omissions in final construction documents, owner-driven programme or design changes, among others?

The idea

Start early, integrate quickly and work together as a whole.

Several solutions and building methods have been tested to reduce uncertainties on projects, and in most cases, it has been possible to achieve a successful balance when collaboration and communication among team members are improved, especially in projects with highly complex programmes.

Also, on projects of high complexity, it is no longer sufficient to merely know the project cost, the owner must know how the project will be paid for and integrate that knowledge into the scope of work, due to the direct impact on the project design, and speed with which the project can be delivered, especially on the public sector, since the public in nowadays wants greater accountability in how we spend their money.

Summarizing, the idea is to implement new mechanisms, and fine-tune existing ones, to mitigate the top-drivers that cause major uncertainty in most projects, such as:

* Clearer direction from owners
* More active leadership by owners
* More integration between design and build parties during design and construction
* Clearer definition of deliverables between parties during the design process
* Team selection criteria not based primarily on low fee
* Use of construction manager (CM) as contractor
* Use of integrated project delivery (IPD) contracts
* Use of BIM and other online virtual design tools by the entire project team
* Budget contingency in the owner’s budget to accommodate design errors and omissions, to reduce uncertainty

The impact

Construction is not an exact science.

More integration and better communication are key factors, and the most effective mitigating factors against overall uncertainty. For instance, a design-bid-build method, by engaging trade contractors in a design assist role, is where we can find highest success rates in reducing uncertainty.

One of the top-divers of uncertainty-related problems, are owner-driven changes and unclear direction, as well as design errors and omissions. Therefore, more integration between all parties is highly advisable.

It is unrealistic to expect that on high complex projects, all owners fully understand design and construction processes well enough to provide accurate guidance and perfect leadership. Design and construction teams need to make an effort to understand the final end user requirements, and provide a better-informed design to the owner stakeholders, which will generate less disruptive stakeholder changes. Also, design and construction teams need to realize that their clients are often dealing with a range of internal stakeholders, which causes huge disruptions, and frequently leads to a scope, budget and schedule changes during the project life cycle.

On design-bid-build projects, by engaging trade contractors in design early stages, has proved to be successful for some owners, and to the project quality, due to intensive collaboration between all parties to avoid unanticipated problems in the field, and it also provides to the owner, especially the public one, the knowledge and technical support to better define scope, budget and schedule.

As an exampe, when Saraiva + Associados, a leading architectural firm, designed the new Loures Central Hospital in Lisbon, following a public competition conducted by the Ministry of Health, in a Design-Bid-Build-Operate process, due to the complex programme of such a building, the entire clinical operation, design and construction team worked together as a whole with all owner-stakeholders from the most initial stages of the project. This enabled a full scope review, to allow those requirements to be incorporated into the design during th eprogramming and concept design phase. Also, virtual coordination was used, by using Acconex platform and BIM, which was very effective to mitigate uncertainty, increase Communication, Collaboration and Integration, to improve project performance. This enabled a 70,000 m2 and 420-bed hospital to fully open to public in January 2012 when the design started in June 2009.

During the programming, design and construction process of Loures Central Hospital, four major mitigating elements were used:

* Documents: Detailed construction drawings with no significant errors or omissions
* Early Collaboration: A collaborative approach with involvement by operator, contractor and the entire project team in early design
* Issue Resolution: Clear process for project team members for dealing with issues that arise during design and construction
* Shared Liability: A collaborative approach with shared liability across the project team, contractor and building operator

Also, with such a complex project, the owner was forced to set the budget at a very early stage and then literally develop the detailed scope of work within the constraints set by available financing, with the support of the winning consortium. Thus, in these specific cases and complex programmes, financing drives the project scope.

The barriers to innovation – and the solutions

A problem anticipated is a problem half solved.

It is clear that to improve project performance and reduce uncertainty, the owner must have at his disposal the ability and means to assemble and engage a proper team, in the early stages. However, projects financed with public funds, unless some of the local and international legislation is changed and adapted, public owners will continue to face serious challenges to develop and provide perfect information at the outset.

It is also clear that, the use of BIM by the design and construction teams is very effective in mitigating uncertainty through virtual coordination and digital fabrication, and will also help to decrease communication between all parties. However, technology doesn’t improve communication on a human level between members of the project team, since frequently they tend to avoid difficult conversations about potential conflicts, causing high rates of change.

The whole way of thinking and acting has to be changed, by integrating new technologies at our disposal in a more efficient way, as well as the current legislation has to be amended and adapted to enable better communication via technology to help deucing costs of change.

The way forward

An informed and active owner solves a lot of problems in the project.

Overall the tries to provide empirical insight into the actual use of uncertainty and risk management approaches that are currently being used by owners, project managers and the design team.

Only a minority of owners and their project managers, implement uncertainty and risk management approaches and processes since the early design stages, even some of the most complex projects.

Therefore, on the basis of past experience, on projects perceived as complex some of the following key areas need to be improved:

* Stakeholder/ client/ customer/ sponsor involvement, with more integration and better communication management processes
* Better risk identification, assessment and planning needs to be done prior at the outset of the project
* Focused uncertainty and risk management training and education from the owner side
* Engage and Use of appropriate expertise
* The development of a lessons learned database and industry specific guidelines

Uncertainty and risk are fundamental aspects in the management of projects for performance improvement. It is critical to overcome some of the barriers that have been blocking the ability of the owner, in particular the public one, to implement uncertainty and risk management key approaches, as well as improving communication lines. Unless some of these barriers are overcome, risk management planning, identification, assessment, response planning and monitoring will not be truly effective.

Also, changes to socio-legal factors are crucial, to enable the owner to engage appropriate expertise, essential in managing uncertainty on projects.

[[Category:Organisations]] [[Category:Publications_/_reports]] [[Category:Standards_/_measurements]] [[Category:Cost_/_business_planning]] [[Category:Design]] [[Category:Procurement]] [[Category:Products_/_components]]

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The future of the built environment in a revolutionary age

2017-04-04T14:00:42Z

ISIDORAKOSTA:

[[File:The.21.1.16.jpg|link=File:The.21.1.16.jpg]]

Business leaders operating in construction and the built environment face huge challenges and opportunities in the years ahead. A number of major changes are coming together to create a completely new scenario. Some will see risks, others the immense opportunities to develop sustainable and profitable business models in the future.

One of the changes, the central theme of the World Economic Forum’s annual summit in Davos this year, is the impact of the “fourth industrial revolution”. As a result of greater technological advances, we are about to see the physical world become ever more connected to the digital one through billions of sensors feeding back information, known as the Internet of Things. It will create new ways of serving customers, new capabilities in production and the operation of devices across all sectors.

Indeed, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, [https://www.foreignaffairs.com/articles/2015-12-12/fourth-industrial-revolution wrote in an article for Foreign Affairs]:

“An underlying theme in my conversations with global CEOs and senior business executives is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed.”

This may be daunting, but it is also immensely exciting for business leaders to craft new commercial opportunities as they begin to understand the tools the fourth industrial revolution is delivering.

The other major shift is environmental and social: it is about the constraints of the planet to sustain an ever growing world economy serving a growing population, expected to reach nine billion by mid-century. [http://www.mckinsey.com/insights/energy_resources_materials/mobilizing_for_a_resource_revolution As the middle classes increase with up to three billion over the next few decades] – the pressure on manufacturers to supply the goods and services they want will put untold strains on the planet’s non-renewable resources. Alongside that, of course, is the immediate challenge of reducing carbon emissions to keep global warming below two degrees, as agreed at the recent UN climate change summit in Paris.

It is also vital that businesses develop ways to make goods that consist of healthy materials, ensuring they contribute to health and wellbeing in the increasingly populated built environment. For example, ensuring we have good indoor air quality, is a major issue today, especially as we all spend around 90% of our time indoors. Businesses also need to consider how to develop goods for second and third life cycles, so that materials are used more effectively.

The concept of the circular economy and Cradle to Cradle principles pulls these various threads together and provides a powerful tool for organisations to shift to truly sustainable business models. Circular ideas are currently being developed to good effect in the industry, such as DSM that already sells a number of safer materials, such as halogen-free cable coatings for electronics and solvent-free ingredients for paints that do not impose a burden on our eco-system.

Another big shift is the rapid growth of the world’s ageing population. The number of people aged 60 or over went up threefold from 205 million in 1950 to 606 million in 2000. Another threefold increase is expected in the first half of this century [http://www.un.org/esa/population/publications/worldageing19502050/ with just under 2 billion 60-plus people expected by 2050]. All those involved in the built environment are considering how smart designs and the use of the Internet of Things can improve the lives and health and wellbeing of people as they age. [https://next.ft.com/content/3843cd02-16a9-11e4-8210-00144feabdc0 Here the Financial Times visualises what may become the norm]: “Imagine a home where hidden sensors in the drugs cabinet can update prescriptions, the radiator will switch itself on when the weather turns chilly, and a bracelet can call the ambulance if an elderly person’s pacemaker plays up.”

At Tarkett, our designers have created intelligent, connected flooring, enabling caregivers to detect abnormal situations or unusual behaviors in senior citizens or residents of healthcare facilities. These innovations, underpinned by emerging technology, will enable us to provide added value services that support health and wellbeing.

Another innovative example of what adding connected technology to products can do [http://www.wired.com/insights/2014/11/the-internet-of-things-bigger/ is featured in Wired magazine]. One expert offered an example of what adding sensors to the concrete in a bridge can do: “When we rebuild bridges, we can use smart cement: cement equipped with sensors to monitor stresses, cracks, and warpages. This is cement that alerts us to fix problems before they cause a catastrophe.”

The exact future is of course unknown but it will certainly be full of exciting possibilities. How well we manage this new revolutionary phase will depend on our determination to drive a positive agenda in business, based on a strong purpose, balancing profits with people and planet.

Written by

Remco Teulings, President, Tarkett EMEA

This article was also published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Research_/_Innovation]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_techniques]] [[Category:Cost_/_business_planning]] [[Category:Design]]

The future of the built environment in a revolutionary age

2017-04-04T14:00:17Z

ISIDORAKOSTA: Created page with " File:The.21.1.16.jpg Business leaders operating in construction and the built environment face huge challenges and opportunities in the years ahead. A number of major chan..."

[[File:The.21.1.16.jpg]]

Business leaders operating in construction and the built environment face huge challenges and opportunities in the years ahead. A number of major changes are coming together to create a completely new scenario. Some will see risks, others the immense opportunities to develop sustainable and profitable business models in the future.

One of the changes, the central theme of the World Economic Forum’s annual summit in Davos this year, is the impact of the “fourth industrial revolution”. As a result of greater technological advances, we are about to see the physical world become ever more connected to the digital one through billions of sensors feeding back information, known as the Internet of Things. It will create new ways of serving customers, new capabilities in production and the operation of devices across all sectors.

Indeed, Professor Klaus Schwab, Founder and Executive Chairman of the World Economic Forum, [https://www.foreignaffairs.com/articles/2015-12-12/fourth-industrial-revolution wrote in an article for Foreign Affairs]:

“An underlying theme in my conversations with global CEOs and senior business executives is that the acceleration of innovation and the velocity of disruption are hard to comprehend or anticipate and that these drivers constitute a source of constant surprise, even for the best connected and most well informed.”

This may be daunting, but it is also immensely exciting for business leaders to craft new commercial opportunities as they begin to understand the tools the fourth industrial revolution is delivering.

The other major shift is environmental and social: it is about the constraints of the planet to sustain an ever growing world economy serving a growing population, expected to reach nine billion by mid-century. [http://www.mckinsey.com/insights/energy_resources_materials/mobilizing_for_a_resource_revolution As the middle classes increase with up to three billion over the next few decades] – the pressure on manufacturers to supply the goods and services they want will put untold strains on the planet’s non-renewable resources. Alongside that, of course, is the immediate challenge of reducing carbon emissions to keep global warming below two degrees, as agreed at the recent UN climate change summit in Paris.

It is also vital that businesses develop ways to make goods that consist of healthy materials, ensuring they contribute to health and wellbeing in the increasingly populated built environment. For example, ensuring we have good indoor air quality, is a major issue today, especially as we all spend around 90% of our time indoors. Businesses also need to consider how to develop goods for second and third life cycles, so that materials are used more effectively.

The concept of the circular economy and Cradle to Cradle principles pulls these various threads together and provides a powerful tool for organisations to shift to truly sustainable business models. Circular ideas are currently being developed to good effect in the industry, such as DSM that already sells a number of safer materials, such as halogen-free cable coatings for electronics and solvent-free ingredients for paints that do not impose a burden on our eco-system.

Another big shift is the rapid growth of the world’s ageing population. The number of people aged 60 or over went up threefold from 205 million in 1950 to 606 million in 2000. Another threefold increase is expected in the first half of this century [http://www.un.org/esa/population/publications/worldageing19502050/ with just under 2 billion 60-plus people expected by 2050]. All those involved in the built environment are considering how smart designs and the use of the Internet of Things can improve the lives and health and wellbeing of people as they age. [https://next.ft.com/content/3843cd02-16a9-11e4-8210-00144feabdc0 Here the Financial Times visualises what may become the norm]: “Imagine a home where hidden sensors in the drugs cabinet can update prescriptions, the radiator will switch itself on when the weather turns chilly, and a bracelet can call the ambulance if an elderly person’s pacemaker plays up.”

At Tarkett, our designers have created intelligent, connected flooring, enabling caregivers to detect abnormal situations or unusual behaviors in senior citizens or residents of healthcare facilities. These innovations, underpinned by emerging technology, will enable us to provide added value services that support health and wellbeing.

Another innovative example of what adding connected technology to products can do [http://www.wired.com/insights/2014/11/the-internet-of-things-bigger/ is featured in Wired magazine]. One expert offered an example of what adding sensors to the concrete in a bridge can do: “When we rebuild bridges, we can use smart cement: cement equipped with sensors to monitor stresses, cracks, and warpages. This is cement that alerts us to fix problems before they cause a catastrophe.”

The exact future is of course unknown but it will certainly be full of exciting possibilities. How well we manage this new revolutionary phase will depend on our determination to drive a positive agenda in business, based on a strong purpose, balancing profits with people and planet.

Written by 
Remco Teulings, President, Tarkett EMEA

[[Category:Research_/_Innovation]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Construction_techniques]] [[Category:Cost_/_business_planning]] [[Category:Design]]

How to tell which infrastructure projects will work

2017-04-04T13:57:50Z

ISIDORAKOSTA: Created page with "File:How.11.12.15.jpg It’s the classic conundrum that governments typically grapple with. Which projects are most beneficial in the long-term? How do large, expensive proj..."

[[File:How.11.12.15.jpg]]

It’s the classic conundrum that governments typically grapple with. Which projects are most beneficial in the long-term? How do large, expensive projects impact on the debt dynamics and macroeconomic stability? While there is a need for large infrastructure investment in the developing world it is often difficult for governments to determine the most beneficial projects.

Typically, the tools used to evaluate projects differ within governments. Moreover, current models are often complicated, time- consuming and do not take into account the localized impacts of specific projects or fail to assess the full impact on the economy. As the appetite for large infrastructure projects rises in developing countries demand for an adequate user-friendly model is likely to rise.

With this in mind and in response to a request from the Nigerien authorities, we developed a simplified [http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/11/04/090224b083193636/1_0/Rendered/PDF/Modeling0the0i0ment0Options00MAPIO0.pdf model] that assessed the impact of a specific project on the economy. The model was designed to estimate the impact of this investment project on a discrete set of macroeconomic variables, such as trade, growth, inflation and debt. To do this, it was explicitly developed to take into account the increase in demand that occurred during the project’s implementation as well as the estimated impact of the project’s anticipated returns on the economy. The model helps better understanding how the execution of investment projects affect debt sustainability, as debt sustainability analyses often overlook the economic impact of funds borrowed and overly focus on their financial terms.

As a test case, we used the Kandadji Dam project in Niger to simulate the macroeconomic impact of a large infrastructure project. With a fairly large project cost – estimated at $785 million or around 10% of Niger’s gross domestic product (GDP) in 2013 – it was vital to estimate the net impact the project would have on Niger’s economy.

Interestingly, we found that the revenues generated by the project would add 0.45% to the GDP and the increased demand for domestic production during the construction phase of the project would increase the country’s GDP by 0.25% above the current projection. The model also revealed that certain sectors such as construction and transportation would benefit from the increased demand during the construction phase and once operational, the dam would primarily boost agricultural output and electricity generation.

Throughout the project’s implementation phase there would be a marked increase in imports, which would adversely affect the balance of payments. However, upon completion of the project there would be a beneficial shift in terms of trade, with imports falling back to normal levels coupled with a boost to exports. The impact of the project on debt dynamics and macroeconomic stability was also assessed. While the costs for the program are significant, since a large proportion of financing is concessional the model estimated there would be limited effect on the fiscal deficit and debt burden for the government.

Our aim is the model will enable governments to obtain a long-term view on the macroeconomic impacts before they undertake large infrastructure projects so that they are able to make informed choices. With minimal customization, the model can be used to assess projects or programs across various sectors and can be replicated across countries.

Author: The Niger Macroeconomic and Fiscal Team works on improving the quality of public investment management and efficiency in Niger taking into account the country’s budgetary resources, weak private sector, and fiscal management challenges. Olivier Beguy is an Economist based in Chad. Sebastien C. Dessus is the Program Leader based in Washington, DC. Abdoulahi Garba Economist based in Niger. Hayman Jason is an Economist and Consultant. Johannes Herderschee is a Senior Economist, based in Washington, DC.

Image: Workers level the earth on the Mombasa-Nairobi highway construction project in Athi River, 20 km (12 miles) from Nairobi. REUTERS/Elizabeth Nganga.

For more information on the computational aspects of the model, please see [http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2015/11/04/090224b083193636/1_0/Rendered/PDF/Modeling0the0i0ment0Options00MAPIO0.pdf Modeling the Impact of Large Infrastructure Projects: A Case Study from Niger].

This article was also published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

Can we build cities that anticipate the future?

2017-04-04T13:52:40Z

ISIDORAKOSTA: Created page with "File:Can.25.10.15.jpg Our cities are built brick by brick, often using construction practices that have evolved little in the last century and giving little regard to proper..."

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Our cities are built brick by brick, often using construction practices that have evolved little in the last century and giving little regard to proper planning and sustainable development.

Yet new innovations and technologies have produced progressive means of constructing the built environment to ensure that urban infrastructure, once in place, can make a valuable contribution to the workings of a city for centuries to come, withstanding many changes in use and function. Good urban infrastructure needs to anticipate change, be built to adapt and to be resilient.

The [http://www.weforum.org/content/global-agenda-council-future-cities-2014-2016-0 Global Agenda Council on the Future of Cities] has detailed [https://agenda.weforum.org/2015/10/top-10-urban-innovations-of-2015/ 10 of the most important urban innovations] which will shape the future of our cities. At the heart of these innovations is an understanding that the cities of the future need to be flexible and adaptive, both on a day-to-day level – doing more with less space and resources – and in the long term, be able to adapt to the powerful mega-trends placing heavy pressures on the urban environment. The three key trends which will shape the agenda of cities for years to come are: demographic shifts, a changing environment and resource scarcity; and technology and business model disruption.

=== Demographic shifts ===

The UN reports that the global population will rise to 9.6 billion by 2050. Nearly all of this population growth will occur in cities – it estimated that 66% of the global population will live in urban areas by 2050. Most of these cities are located in the global south and at present, lack the capacity and resources to ensure that city growth is sustainable.

Unchecked urban population growth can lead to vast unsustainable urban sprawl, or the creation of dense slums with poor living standards. Cities will need to accommodate more people without increasing their urban footprint; increasing density, without decreasing quality of life. This can be achieved with reprogrammable living space such as MIT’s [http://www.fastcodesign.com/3030991/slicker-city/mits-cityhome-is-a-house-in-a-box-you-control-by-waving-your-hand reprogrammable apartments] or by building structures with multiple uses in mind, ensuring that they can be used for different purposes at different times of the day or week, such as reusing office space or schools for social or leisure activities during the evenings or at the weekend.

In the developed world, years of declining birth rates and longer life expectancy are leading to a rapidly ageing population, with its own set of challenges. The effects of this demographic shift are already being felt in countries including Japan, Italy, Germany and Norway, with pressure being put on cities to rethink the provision of urban infrastructure, embrace universal design and reuse and repurpose buildings and infrastructure that is becoming obsolete.

This trend is also increasing the demand for health and social services and the provision of housing that will meet the needs of people during their 100 year life. Tokyo is a city at the forefront of this trend; an estimated 200 schools per year are closing and the city is repurposing them as adult education centres, senior homes and places of leisure and exercise for the elderly. Cities in other advanced economies need to prepare for this eventuality.

=== Changing environment and resource scarcity ===

The world’s climate over the next century is likely to shift dramatically. Increased occurrences of extreme weather events, desertification and rising sea levels all directly threaten the world’s cities. Fifteen of the world’s 20 largest cities are located in coastal zones threatened by sea-level rise and storm surges. To prepare for these challenges, cities need to be resilient, building coping mechanisms into their urban fabric. If well designed, infrastructure which protects against high impact climate events can also be flexible, serving a valuable purpose for the entirety of its life. Projects such as New York’s [http://www.lafargeholcim-foundation.org/Projects/the-dryline Dry Line], or Roskilde’s [http://www.cowi.com/menu/NewsandMedia/News/WaterandEnvironment/Pages/Innovative-skatepark-prevents-inner-city-flooding.aspx flood defence skatepark] combine resilient infrastructure with a space for community leisure activities.

The urban planner Patrick Abercrombie, who created London’s post-World War Two masterplan, reserved its hinterland as a “green belt” aimed to preserve the countryside, while also providing nourishment to the city. Today the city’s greenbelt is global, and water and resource scarcity in any region can easily disrupt the delicate balance between a city and its worldwide network of production.

The advent of urban farming will help to alleviate this risk. Urban farms are largely hydroponic – feeding water and nutrients directly to the roots – and closed loop, meaning they use up to 90% less water. They can be placed anywhere and stacked vertically making them up to 100 times more productive per hectare. By 2050, the world’s population will demand 70% more food than is consumed today, urban farms will help cities to feed their growing populations, creating a vertical green belt, adding flexibility into the food system with guaranteed yields and low risk supply chains.

Cities consume vast amounts of all resources, from the materials of which they are constructed, to the demands of their citizens for products and packaging. Cities cannot continue to follow a take/make/waste pattern, filling landfills and depleting finite resources and need to move towards a more circular economy. Systems of reuse and recycling need to be in place to smartly deal with waste and building materials themselves need to be designed for reuse. The European Union programme, [http://cordis.europa.eu/project/rcn/196829_en.html Buildings as Material Banks], creates reusable buildings which store and record the value of their composite materials over their lifetime. Others use up-cycled materials such as [http://www.theguardian.com/cities/2015/oct/09/living-steel-box-shipping-containers-future-housing shipping containers] to provide low cost flexible housing to students and young professionals.

=== Technology and business model disruption ===

Cities are economic engines. [http://www.mckinsey.com/insights/urbanization/urban_world According to McKinsey], 600 cities are responsible for 60% of global GDP. The healthy economy of a city sustains its population through salaries and entrepreneurial activity. However, all economic activity is subject to disruption; shifts in business models can create new opportunities, but cites from Detroit to Liverpool have seen the possible negative effects of industrial change.

In the [https://agenda.weforum.org/2015/02/are-you-ready-for-the-technological-revolution/ fourth industrial revolution], we are likely to see the biggest industrial shifts in a generation, changing the way we work and live in the urban environment. Innovations such as 3D-printing, Artificial Intelligence and next generation robotics will shift models of work and production in ways that are impossible to predict. Cities and businesses need to be adaptive. Google, a company at the forefront of this change, anticipates that their business model could shift dramatically. Their new [https://googleblog.blogspot.co.uk/2015/02/rethinking-office-space.html#gpluscomments Mountain View headquarters] is adapted for this, a series of giant domes under which any number of structures, fit for any purpose can be quickly assembled; making it completely reprogrammable for any eventual use case. Cities need to take a similar approach to construction.

The sharing economy can be defined as the distribution and sharing of excess goods and services between individuals, largely enabled by modern technology. This new model is having a deep impact on the urban environment. Many consumers are moving away from ownership and towards access, renting access to mobility, entertainment or space.

Companies of the sharing economy naturally add a layer of flexibility into the city. Airbnb, for example, allows people to rent out their apartments when they are out of town, easily increasing a city’s capacity to accommodate influxes of visitors as demand increases. As the sharing economy develops similar companies will enable cities to turbo charge their efficiency, ensuring that no excess capacity is wasted.

Humanity faces the mammoth task of adding over 2 billion people to the urban population before 2050, the equivalent of creating a city the size of London every month for the next two decades. In order to house, feed and employ these people, cities will have to do more with less, they have to be smarter, greener and more efficient. They will have to innovate.

Written by:

Alice Charles, Community Lead, Infrastructure and Urban Development Industry, World Economic Forum, and James Pennington, Specialist, Knowledge Networks and Analysis, World Economic Forum.

Image: A man watches the skyline of Shanghai from the Shanghai Financial Center building, October 25, 2011. REUTERS/Carlos Barria

This article was also published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Projects_and_case_studies]] [[Category:Research_/_Innovation]] [[Category:Policy]] [[Category:Regulations]] [[Category:Standards_/_measurements]] [[Category:Sustainability]] [[Category:Cost_/_business_planning]]

How to rebuild using the debris from disasters

2017-04-04T13:48:44Z

ISIDORAKOSTA: Created page with "File:How20.07.15.jpg In Amsterdam a mobile factory, the size of two shipping containers, ingests rubble at one end, liquifies it into cement and spurts out Lego-shaped build..."

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In Amsterdam a mobile factory, the size of two shipping containers, ingests rubble at one end, liquifies it into cement and spurts out Lego-shaped building blocks.

Call it rubble for the people, converting the deadly debris from disasters into homes and hospitals, cheaply and quickly.

It’s the brainchild of Gerard Steijn, a 71-year-old sustainable development consultant turned social entrepreneur, who leads the Netherlands-based project to recycle the rubble from natural disasters and wars.

He plans to create ecologically sound and safe housing by producing 750 building blocks a day from the debris, enough for one home at a cost of less than $20,000 each.

“In disasters, you have piles and piles of rubble, and the rubble is waste. If you are rich, you buy more bricks and rebuild your home,” Steijn said in a telephone interview.

“But what happens if you are poor? In disasters it is the poorest people who live in the weakest houses and they loose their homes first. I thought, what if you recycled the rubble to build back better homes for poor people?”

His rubble-busting Mobile Factory has fired the imagination of a landowner in Haiti and a civil engineer at the University of Delft. They have joined forces to test Steijn’s idea and build the first rubble community in Port au Prince next year.

But first they need money.

Steijn has launched an Indiegogo crowdfunding campaign to raise $400,000 to stress test the structures and build 20 homes in Haiti by next spring. If it succeeds, Steijn says Red Cross and United Nations’ officials have expressed interest. In its first 20 days, The Mobile Factory raised $2,215.

Eat Rubble 
Three brightly painted concept homes stand in an industrial park in Amsterdam. Hennes de Ridder, an engineering professor at the University of Delft who donates his time to the Mobile Factory, exudes a child’s excitement in describing their sparse structural elements.

Each 20x10x10 cm (8x4x4 inches), snaps together Lego-style without cement or mortar allowing the home to flex under stress, he explains. Bamboo poles inserted into the walls provide extra stability, while two bamboo poles and a steel cable anchor the roof, he explains.

“It’s very simple,” de Ridder said by telephone. “We eat the rubble, make high-quality concrete blocks. Like Lego, it is standardised in material and geometry.”

Unskilled people can build the homes with the blocks, which meet demanding Dutch construction standards to ensure they will last for many years. De Ridder expects further stress tests he planned for Peru in a few months will show the homes can withstand temblors of at least 6 on the Richter scale.

Some 4,600 miles (6,759 kms) away, Joel Dresse awaits the Mobile Factory’s arrival in September. The Belgian consulate is donating a 6,000 sq. metre (64,583 sq. ft.) plot outside Port au Prince once owned by his father to build the new community from rubble.

No stranger to recycling, Dresse’s wife runs the Caribbean Crafts factory employing 200 Haitians who recycle scrap into home decor sold worldwide. He is offering 20 of its workers the opportunity for recycled homes in the community he has named Petit Paradis – a name he hopes will inspire Haitians scarred by the 2010 earthquake that killed over 230,000 and displaced 1.5 million people.

“I want to give people a perspective on what they can do for the future. I want them to have more than they imagine, where they will have a very nice piece of land, a very nice environment and a very nice home.

“And I like that it’s very ecological,” Dresse said.

Written by 
Stella Dawson Chief Correspondent, Thomson Reuters Foundation

This article was also published on the [https://futureofconstruction.org/ Future of Construction Knowledge Sharing] [https://futureofconstruction.org/ Platform] and the [http://www.weforum.org/agenda/2017/03/elon-musk-innovation-construction-industry WEF Agenda Blog].

[[Category:Projects_and_case_studies]] [[Category:Research_/_Innovation]] [[Category:Sustainability]] [[Category:Cost_/_business_planning]] [[Category:Products_/_components]]