State investment plan needs to be properly project-managed

Infrastructure needs implementation team to ensure sustainability and delivery

Luas Cross City construction works at O’Connell Bridge: Big projects need strong governance and appropriately sized delivery teams. Photograph: Eric Luke

Luas Cross City construction works at O’Connell Bridge: Big projects need strong governance and appropriately sized delivery teams. Photograph: Eric Luke

 

The Government’s capital investment plan, due to be launched on Thursday, looks set to be truly remarkable in its scale and ambition – something that has been lacking for some time. That level of scale and ambition fits with a country that has thrown off the shackles of the recession and is no longer just “recovering” as Minister for Finance Paschal Donohoe put it last week.

Yet we must remember previous capital plans, albeit not of this scale, that were remarkable more so for the dust they gathered on the shelf post-announcement. So how do we do it differently this time and in a way that will help underpin ongoing economic growth?

An investment programme of this scale needs an implementation plan of similar vision. The projects and investments will be spread across many government departments and agencies. This can prove impossible to monitor and plan in a cohesive fashion. We need to have someone in charge of and accountable for delivery of this plan – a central implementation taskforce charged with driving delivery and eliminating hurdles along the way.

Too often we are reluctant to invest in the staff needed to deliver large projects, deeming it a costly overhead

When you think about a spend of more than €100 billion over 10 years why would it not have its own chief executive? However, the imperative now is speedy implementation so nothing should slow that approach.

Big projects need strong governance and appropriately sized delivery teams. Too often we are reluctant to invest in the staff needed to deliver large projects, deeming it a costly overhead. That is a short-sighted viewpoint.

Socio-economic benefit

That implementation team needs to consider how best to prioritise the delivery of the projects,so they are not flooding the market at the same time. Best practice internationally is moving towards prioritisation based on economic, or better still, socio-economic benefit. That takes local politics out of the equation to some degree which can only be good.

Globally, the trend in infrastructure is that projects in the developed world have ever-increasing timescales to delivery, whereas those in less developed or less democratic countries see none of the delays that we do. The ideal approach probably lies somewhere in the middle. To deliver a plan of this magnitude, we need to seriously look at the typical hurdles in the path of such developments and have a cohesive approach to try to minimise them. This will include planning- and regulatory-related delays. There is a a need to speed up the pace of decision-making and all the pre-procurement approvals. Procurement itself is dictated by European directives so that is to some degree out of our control.

The scale of development planned here needs a significant supply of skilled labour to deliver it. Recent statistics indicate that while we are nearing full employment, employment in the construction sector is only at 45 per cent of its previous peak. Where are the construction workers going to come from to deliver all these projects, not to mention address our housing crisis?

Ireland underinvested in infrastructure throughout the recession. That was understandable when times were tough

A plan of this scale will attract international attention and, if we market it right, should attract much-needed skills and talent back to Ireland. International companies will take notice. The scale involved justifies them looking at establishing an operation here. Likewise, opportunities will abound for returning emigrants. But we can’t be complacent. We do need to deliver the message to overseas markets that Ireland is a great place to do business and is officially out of the recovery ward.

Future-proofing

Ireland underinvested in infrastructure throughout the recession. That was understandable when times were tough. Ideally, investment in infrastructure should be on a sustainable basis – sustainable in the sense of a long-term plan that continues, notwithstanding external factors. It is widely accepted that investment in infrastructure is an essential component to deliver and sustain economic growth. Now is the right time to invest to provide some element of future-proofing of the economy against future shocks, and particularly of Brexit.

The Government has recognised the need to invest. We need it to be recognised also that investment needs to continue at a steady pace, not at a stop-start basis. So the plan needs cross-party support and the implementation taskforce needs to ensure that it survives any future changes in the political landscape or budgetary decisions.

Infrastructure planning also needs to be sustainable to address the pace of change. Ten years ago, the iPhone wasn’t around, nor were there any apps to help you plan your journey or order your taxi. Who knows what the rapid pace of change will deliver in the future? Yet, infrastructure planning has to look to the long term and try to predict what society will need.

The Government is about to put forward a vision. That vision needs a plan to implement it and proper oversight – and it needs to be future-proofed.

Michele Connolly is head of corporate finance at KPMG

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