Critical Risk Areas for Public Infrastructure Projects - Part 2

August 8, 2019 | 5 minute read
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In part one of this article, I examined some of the many challenges public infrastructure projects face, spanning from poor planning to cost overruns, and even outright failure. In that article, I reviewed how industry professionals must vigilantly avoid three potential project pitfalls inherent in public infrastructure projects, including: selecting the wrong project, reputational damage, and financial failure.

In this post, I’ll explore four additional public infrastructure project hazards that must be scrupulously avoided to achieve success.

Risk: Schedule failure

During the development and delivery of public infrastructure projects, poor scheduling frequently results in late project delivery. A wide variety of reasons could cause a schedule delay on a large project, but I’ve listed a few here:

Poor schedule quality: Public infrastructure projects should follow a Critical Path Method (CPM) for overall coordination and construction schedule development. Using a multi-disciplinary approach to help identify and sequence work on a project can help develop a CPM schedule.  

Large projects’ CPM schedules often aren’t carefully developed. This causes misaligned milestones and uncoordinated hand-off points between work scope and contractors on the project. Lackluster CPM scheduling practices are a significant cause for poor schedule performance.

Owner-induced delays: In some cases, project owners cause delays to public infrastructure projects. These significant, unplanned project schedule delays can happen for the following reasons:
•    Delay in obtaining the required environmental and building permits
•    Delay in securing funding or financing
•    Delay in awarding a tender
•    Delay in approving a contract variation

The project owner must provide an extension of time claim to a contractor under specific contractual conditions caused by delays or disruption to the schedule.

Supplier-induced delays: The timely supply of materials and equipment to public infrastructure projects is critical to achieving the overall project schedule. Unfortunately, suppliers sometimes cause schedule delays by failing to deliver at the required point in the program.  

Two of the main reasons suppliers fall behind schedule:
1) Longer than quoted delivery lead times for essential equipment.
2) Waiting for final design information. A supplier can cause delays to the overall project schedule if they provide late design data and documentation to the infrastructure engineering design team.

Contractor-induced delays: Construction contractors must carefully plan to meet the planned productivity rates. Providing adequate quantities of material, equipment, and people to the construction site is crucial to meeting the planned schedule dates.

Waiting for construction resources on-site due to poor planning is a leading cause for project schedule delays.

Another common contributor to schedule delays includes creating construction schedules using assumed productivity factors—for example, earthworks rates or steel erection rates per hour or day.

Physical progress will fall behind the planned program if assumed productivity factors can’t be achieved. The specific contract terms may require the contractor to pay the project owner for delay damages if the contractor causes a delay or disruption to site activities.

Risk: Technical failure

Design failures: Areas influencing the overall design success for public infrastructure include:
•    Thorough requirements analysis
•    Impact evaluation of all constraints
•    Adequacy of technology and design strategy for the project

Significant structural, piping, or equipment clashes can occur due to poor interface management between design packages where the engineering design work is allocated on a work-package approach. Design clashes discovered on the construction site can trigger countless delays and disruption on-site, with the potential of triggering substantial cost and schedule overruns.

Design clashes could necessitate significant design and construction rework to resolve the identified clash in the construction phase as opposed to the design phase.

Construction failures: The very nature of infrastructure construction work may cause a high safety risk to site workers.  Working in confined spaces, at height, near moving machinery, etc., requires extra vigilance in construction site safety management.  

A safety incident on a construction site not only causes hardship to the worker and their family, but it will also cause delays to work progress on-site.

Construction process failures also occur when:
•    Site personnel work from old revisions of construction drawings or documents
•    The incorrect material or equipment is used in the construction process
•    The incorrect work procedure is followed
•    Quality inspections are not completed as specified

Risk: Supply chain failure

Project supply chain failures represent a significant schedule risk to public infrastructure projects.

Choosing reputable equipment and material suppliers is critical to ensuring the timely delivery of these items to the construction site.  A formal vendor qualification process could mitigate the risks associated with material and equipment not delivered, according to the design specification and quality requirements.

Unfortunately, providing late payments to subcontractors and suppliers is endemic in the construction industry. Late payments often inflict financial distress throughout the supply chain.

Small and medium enterprises (SMEs) are forced to find working capital or bridging cash-flow from financial institutions-—often at a high interest rate which increase the SMEs' operational cost and reduce profits. Cash-strapped vendors can go out of business midway through a project, potentially delaying or disrupting the overall project schedule.

Risk: Operational failure

Transitioning a new public infrastructure asset to full functional capacity in the intended time frame is vital to project success.

Influencing the public’s perception of project success could include:
•    Ramping up airport passengers through-put
•    Achieving targeted patient numbers at a hospital
•    Providing clean water through a new potable water system

Handing over an incomplete asset, or not having a functioning operations and maintenance system in place at the point of handover, can significantly delay ramp-up of the new asset. 

The project team must deliver a comprehensive, electronic, as-built baseline of the delivered asset to the operations and maintenance team. The project owner must also implement an adequate operational readiness plan—or risk not securing financing for similar projects in the future.

Check out part one of this article for more insights into the risks arising from public infrastructure projects.

To learn more about strategies for mitigating risk and improving project outcomes, watch our "Best Practices for Managing Public Infrastructure Projects" on-demand webinar.

Oracle Construction and Engineering provides secure, cloud-based collaboration solutions to enable the project/construction management of large infrastructure projects across the asset lifecycle. In addition to mitigating critical risks, our solutions drive efficiency, visibility, and control for project owners and delivery teams, across the project lifecycle. 

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Werner Maritz

Werner Maritz is director of industry strategy for Oracle Construction and Engineering

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