Infrastructure Systems: Delivery and Finance
- John B. Miller Ph.D.
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An important change is occurring in the means and methods of delivery and finance of public and private infrastructure networks in America, and around the World, driven by insatiable pressure to move information, people and goods with higher quality and at a lower cost. Infrastructure systems include transportation, water, wastewater, and telecommunications facilities, networks and services. The largest sector of the American economy, design, construction, operations, and maintenance of public and private infrastructure facilities represent approximately one trillion dollars in the US.
Owners of both public and private collections of infrastructure facilities are acquiring new facilities, and repairing and replacing existing facilities using a variety of project delivery and finance methods based on value for money over life cycle of each facility. New delivery methods such as Design-Build-Operate, Design-Build-Finance-Operate and Pure Operational and Maintenance are being added to traditional methods like Design-Build-Bid, Construction Management At-Risk, and Design-Build. Attracted by the prospect of lifecycle cost savings of 40% or more, owners of infrastructure facilities -Clients- are struggling to find reliable mechanisms for choosing among the various delivery methods. Designers, constructors, financiers, operators, equipment suppliers, and technology suppliers -Producers- are discovering that business strategies of the past fifty years are no longer practical. Producers now face needlessly high selling costs created by current upheaval in delivery and finance methods, cost passed on to the Clients.
Judgment had once again become critical in the application of these methods to a collection (`portfolio') of infrastructure facilities. The industry needs to learn which delivery methods can be productively applied to a given project, and the financial implications on each project, and on the entire portfolio. There has been explosive growth in the need for broadly educated professionals who can integrate design, construction, finance, scope, and procurement principles into systems that improve infrastructure quality and cost performance at the portfolio level.
The advent of the information age had made simulation of the entire portfolio of infrastructure facilities possible. Clients and Producers can use simulations to describe current conditions and costs of infrastructure collection. From this database, different scenarios for future infrastructure expenditures can be built and compared prior to the time that decisions are made. A systems based approach to portfolio configuration is now emerging.
The need for stable, yet flexible, models for competition among Producers to meet Clients' needs is great. Statutory and regulatory models, as well as standard form solicitations and contract documents for simultaneous use of the various delivery methods by Clients are required.
In short, a revolution in the means and m
2 Volumes from 2000 – 2002Browse All Volumes