Infrastructure

Unlike the building construction sector, the infrastructure sector is primarily driven by public funding for the modernization of roads, bridges, railways, and other critical infrastructure assets. These infrastructures are characterized by lifetime between 50 and 100 years and large investments for their development and renewal. Governments and international institutions continue to invest heavily in infrastructure renewal, recognizing its crucial role in economic growth and societal resilience.

The large investment package launched in Germany, which amounts to several hundred billion euros until the mid-2030s, is just one indicator that investments in infrastructure will continue to rise. However, while increased financial resources are driving market growth, key challenges remain in project execution. In France, yearly renewal costs for railway network are worth € 3+ bn.

Key Challenges

With respect to project execution, many large infrastructure projects are subject to significant delays and cost overruns. The causes of delays are manifold, and in most cases, cost and time overruns are not one-time events but accumulate over time, affecting all phases from initial planning and permitting to project completion. This also highlights deficiencies in key project elements, with the most common issues being:

Complex and Lengthy Planning and Permitting Procedures, which often cause delays from the outset and lead to additional unplanned efforts to meet approval requirements.
Ineffective Project Governance and Decision Making, often reflected in challenging organizational set-ups with unclear accountabilities, as well as ineffective and cumbersome procedures to conclude options.
Lack of coordination between Operations, development Projects and heavy maintenance, leading to degraded quality of service to end users and delays or overcosts
Lack of Asset Management Strategy, leading to short term decision making, without taking into account long term consequences on the long term
Non optimized Engineering processes, with workpackages led in parallel, without transversal steering nor general design reviews and a lack of standard design
Inefficient Management of Technical Changes including insufficient understanding and planning of consequential changes at scope interfaces, as well as the need to manage an excessive number of modifications.
Lack of rigorous Supply Chain & Contractor Controls, which leads to capacity and supply shortages delaying project progress, late identification of performance and quality gaps and increased effort to manage interfaces.

Addressing these challenges is becoming increasingly difficult and critical. This is driven by high market demand and resulting constraints regarding skilled capacities, and the ongoing trend for increasing project complexity with respect to functions and technologies involved as well as parallelization of works to compress execution timelines.