Risk was already one of the biggest issues facing infrastructure development in markets around the globe. And if procurement agencies weren’t addressing it then, they sure are now in the wake of the COVID-19 pandemic.
Three leaders from the global infrastructure agency procurement landscape gathered together for a discussion on building the future as part of the annual Canadian Council for Public-Private Partnerships conference, a future that looks a little different than what it did this time last year.
At the forefront of the conversation was the multi-faceted issue of risk, and how it will now be treated as agencies look to procure the next generation of infrastructure projects. As noted by Matthew Vickerstaff, deputy CEO and head of project finance for the UK Infrastructure and Projects Authority, the pandemic immediately brought forth unforeseen risks, ones that had to be thoughtfully adjusted to immediately. For developers, it was the fear of how the pandemic would impact project timelines, as the force majeure clause in contracts did not specify it as a type of unforeseeable event or circumstance beyond their control. At the same time, the Authority had to figure the risks involved with not being able to do an on-site evaluation of projects coming to the end of their operations and maintenance contract, instead having to determine alternative ways to evaluate project condition.
There is also the risk of not building resilience into public procurement, something that Infrastructure Ontario CEO Michael Lindsay noted was a priority for his agency. Lindsay noted that his team was looking for ways to ensure that assets would be able to withstand and stay functioning during climate events, as well as mitigate flooding that could occur, as part of the contract demands for new assets. Vickerstaff shared in that desire to ensure resilience in assets was addressed, noting that the UK had introduced some supports in the regulatory environment to help address environmental considerations in procurement.
For Romily Madew, CEO of Infrastructure Australia, there is also a need for risk management in terms of labour and supply chain, both of which were disrupted due to the COVID-19 pandemic as noted by contractors during a recent industry survey.
As agencies look to build in a post-pandemic environment, Madew noted that an increased priority has been placed on the development blue and green infrastructure. As was seen in Canada, those cooped up by the pandemic flocked to open air spaces during days with nice weather, and a shortage of blue and green infrastructure assets led to crowding that could have led to a further outbreak. Thus, the need to ensure there is an increased number of public spaces available to ensure that dangerous crowding conditions won’t occur, and allowing for the public to still have a reasonable quality of life under the circumstances.
As infrastructure agencies around the world prepare for what comes next, developing in a post-pandemic world, there are certain priorities that will have to be addressed if they are to succeed in building the right assets, in the right way, for generations to come.