Collaborative learning model of infrastructure construction: A capability perspective

Purpose Performance heterogeneity between collaborative infrastructure projects is typically examined by considering procurement systems and their governance mechanisms at static points in time. The literature neglects to consider the impact of dynamic learning capability, which is thought to reconfigure governance mechanisms over time in response to evolving market conditions. This conceptual paper proposes a new model to show how continuous joint learning of participant organisations improves project performance. Design/methodology/approach There are two stages of conceptual development. In the first stage, the management literature is analysed to explain the Standard Model of dynamic learning capability that emphasises three learning phases for organisations. This Standard Model is extended to derive a novel Circular Model of dynamic learning capability that shows a new feedback loop between performance and learning. In the second stage, the construction management literature is consulted, adding project lifecycle, stakeholder diversity and three organisational levels to the analysis, to arrive at the Collaborative Model of dynamic learning capability. Findings The Collaborative Model should enable construction organisations to successfully adapt and perform under changing market conditions. The complexity of learning cycles results in capabilities that are imperfectly imitable between organisations, explaining performance heterogeneity on projects. Originality/value The Collaborative Model provides a theoretically substantiated description of project performance, driven by the evolution of procurement systems and governance mechanisms. The Model’s empirical value will be tested in future research.

Infrastructure, investment and development evaluation: A Complex Stakeholder Perception Mapping approach for improving local and regional economic development outcomes

Partial evaluation of infrastructure investments have resulted in expensive mistakes, unsatisfactory outcomes and increased uncertainties for too many stakeholders, communities and economies in both developing and developed nations. "Complex Stakeholder Perception Mapping" (CSPM), is a novel approach that can address existing limitations by inclusively framing, capturing and mapping the spectrum of insights and perceptions using extended Geographic Information Systems. Maps generated in CSPM offer presentations of flexibly combined, complex perceptions of stakeholders on multiple aspects of development. CSPM extends the applications of GIS software in non-spatial mapping and of Multi-Criteria Analysis with a multidimensional evaluation platform and augments decision science capabilities in addressing complexities. Application of CSPM can improve local and regional economic gains from infrastructure projects and aid any multi-objective and multi-stakeholder decision situations.

Defining green road infrastructure projects—A critical review

Green infrastructure is considered as a strategic approach to address the ecological and social impacts of urban sprawl. The main elements of green infrastructure have been well established and include a series of multifunctional ecological systems, such as green urban space, green road infrastructure and the links between these systems. However, it should be noted that the elements of green road infrastructure have only been briefly mentioned in isolated life cycle stages, e.g. design, procurement, construction, maintenance and operation. The definition of green road infrastructure and the elements in green road infrastructure projects remain largely unknown. To explore the elements in green road infrastructure, a critical review was adopted. As the development of green road infrastructure projects is guided by rating systems, a comparison of three major green roads rating systems, including GreenroadsTM, EnvisionTM and Infrastructure Sustainability Rating Tool—IS, was conducted. The comparison reveals that green roads can be defined as road projects that have superior performance in economic, social and environmental sustainability. The sustainability features in green roads mainly include environmental sustainability, social sustainability, economic sustainability, quality, pavement technology and innovation. The results will contribute to an increased understanding of green roads and will be useful to improve the performance of road projects on these sustainability features.

The opportunity for implementing Islamic project financing to the Indonesian infrastructure development

Purpose: This chapter discusses the opportunity of Islamic project financing implementation for public infrastructure development in Indonesia. Design/Methodology/Approach: This chapter, firstly, reviewed existing literature on Islamic finance to explore the applicability of Islamic financing in infrastructure development. Interviews were conducted as the first stage of Delphi method approach. This was then followed by reviewing Indonesia’s government policies and regulations in infrastructure industry and Islamic financing. Findings: This chapter enlightens the implementation of Islamic financing on infrastructure project financing in Indonesia. The findings indicate that the government policies and regulations on both infrastructure investment and Islamic financing support the implementation of Islamic project financing, whereas, an improvement is still needed in order to overarch infrastructure business and Islamic financing investment. Research: Financing framework development for Indonesia infrastructure projects. Limitations/Implications: The result reported comprises the preliminary study of Islamic project paper written based on published research papers and interviews. Furthermore, the data collected for the study are limited to the case of Indonesian infrastructure projects. Practical Implication: Islamic financing in Indonesia infrastructure projects development has not been optimally implemented. Therefore, this chapter serves as a catalyst to explore alternative financial scheme such as Islamic financing for infrastructure development. Originality/Value: This chapter highlights possibilities and obstacles in applying Islamic scheme to infrastructure project financing. This provides a framework to analyse the steps to implement Islamic financing successfully in infrastructure development.

Time and cost performance of design–build projects

The design-build (DB) delivery method has been widely used in the United States due to its reputed superior cost and time performance. However, rigorous studies have produced inconclusive support and only in terms of overall results, with few attempts being made to relate project characteristics with performance levels. This paper provides a larger and more finely grained analysis of a set of 418 DB projects from the online project database of the Design-Build Institute of America (DBIA), in terms of the time-overrun rate (TOR), early start rate (ESR), early completion rate (ECR) and cost overrun rate (COR) associated with project type (e.g., commercial/institutional buildings and civil infrastructure projects), owners (e.g., Department of Defense and private corporations), procurement methods (e.g., ‘best value with discussion’ and qualifications-based selection), contract methods (e.g., lump sum and GMP) and LEED levels (e.g., gold and silver). The results show ‘best value with discussion’ to be the dominant procurement method and lump sum the most frequently used contract method. The DB method provides relatively good time performance, with more than 75% of DB projects completed on time or before schedule. However, with more than 50% of DB projects cost overrunning, the DB advantage of cost saving remains uncertain. ANOVA tests indicate that DB projects within different procurement methods have significantly different time performance and that different owner types and contract methods significantly affect cost performance. In addition to contributing to empirical knowledge concerning the cost and time performance of DB projects with new solid evidence from a large sample size, the findings and practical implications of this study are beneficial to owners in understanding the likely schedule and budget implications involved for their particular project characteristics.

Deriving optimal competition in infrastructure procurement

Typically only a limited number of consortiums are able to competitively bid for Public Private Partnership (PPP) projects. Consequently, this may lead to oligopoly pricing constraints and ineffective competition, thus engendering ex ante market failure. In addressing this issue, this paper aims to determine the optimal number of bidders required to ensure a healthy level of competition is available to procure major infrastructure projects. The theories of Structure-Conduct-Performance (SCP) paradigm; Game Theory and Auction Theory and Transaction Cost Economics are reviewed and discussed and used to produce an optimal level of competition for major infrastructure procurement, that prevents market failure ex ante (lack of competition) and market failure ex post (due to asymmetric lock-in).

A review of project evaluation methodologies to address net impacts and risks of toll road projects to the community

Project evaluation is a process of measuring costs, benefits, risks and uncertainties for the purpose of decision-making by estimating and assessing impacts of the project to the community. The effects of impacts of toll roads are similar but different from the general non-tolled roads. Project evaluation methodologies are extensively studied and applied to various transport infrastructure projects. However, there is no definitive methodology to evaluate toll roads. This review discusses the impacts of toll roads then reviews the limitations of existing project evaluation methodologies when evaluating toll road impacts. The review identified gaps of knowledge of toll evaluations. First, the treatment of toll in project evaluation, particularly in Cost-Benefit Analysis requires further study to explore the appropriate methodology. Secondly, the project evaluation methodology needs to place strong emphasis on empirically based risk and uncertainty assessment. Addressing the limitations of the existing project evaluation methodologies leads to improvements of the methodology in practical level as well as fills the gap of knowledge of project evaluation for toll roads with respect to net impacts to the community.

A review of project evaluation methodologies for toll road projects

Project evaluation is a process of measuring costs, benefits, risks and uncertainties for the purpose of decision-making by estimating and assessing impacts of the project to the community. The effects of impacts of toll roads are similar but different from the general non-tolled roads. Project evaluation methodologies are extensively studied and applied to various transport infrastructure projects. However, there is no definitive methodology to evaluate toll roads. This review discusses the impacts of toll roads then reviews the limitations of existing project evaluation methodologies when evaluating toll road impacts. The review identified gaps of knowledge of toll evaluations. First, the treatment of toll in project evaluation, particularly in Cost-Benefit Analysis requires further study to explore the appropriate methodology. Secondly, the project evaluation methodology needs to place strong emphasis on empirically based risk and uncertainty assessment. Addressing the limitations of the existing project evaluation methodologies leads to improvements of the methodology in practical level as well as fills the gap of knowledge of project evaluation for toll roads with respect to net impacts to the community.

The business case development process in the delivery of NHS infrastructure

There is a lack of knowledge base in relation to experiences gained and lessons learnt from previously executed National Health Service (NHS) infrastructure projects in the UK. This is in part a feature of one-off construction projects, which typify healthcare infrastructure, and in part due to the absence of a suitable method for conveying such information. The complexity of infrastructure delivery process in the NHS makes the construction of healthcare buildings a formidable task. This is particularly the case for the NHS trusts who have little or no experience of construction projects. To facilitate understanding a most important aspect of the delivery process, which is the preparation of a capital investment proposal; steps taken in developing the business case for an NHS healthcare facility are examined. The context for such examination is provided by the planning process of a healthcare project, studied retrospectively. The process is analysed using a social science based method called ‘building stories’, developed at the University of California-Berkeley. By applying this method, stories or narratives are constructed around the data captured on the case study. The findings indicate that the business case process may be used to justify, rather than identify, trusts’ requirements. The study is useful for UK public sector clients as well as consultants and professionals who aim to participate in the delivery of healthcare infrastructure projects in the UK.

The experience of semi-formal infrastructure finance in developing countries: proposals for Brazil and Latin America

This paper has the purpose of analyzing the role of civil society in funding and providing nfrastructure projects in developing countries. Considering that local associations around the world have been directly engaged on some infrastructure projects – some scholars define it as “semi-formal finance” –, the intention is to demonstrate that the experiences on such arrangements in developing countries have been responsible for fostering infrastructure investments in the poorer regions where the government is more absent. Based upon legal, economic and social aspects, this paper aims to contribute to a broader debate for the development of infrastructure in emerging countries. The conclusion is that, under a more social approach, the legal and economic mechanisms in developing countries are able to consider such arrangements in the benefit of their development.

Territory and Infrastructure : Strategic Identification and Project Pondering

El Territorio hoy es visto como una totalidad organizada que no puede ser pensada separando cada uno de los elementos que la componen; cada uno de ellos es definido por su relación con los otros elementos. Así, un pensamiento que integra diferentes disciplinas y saberes comienza a manejar una realidad que lejos está de definir certezas inamovibles, y comienza a vislumbrar horizontes estratégicos. La adaptación a la no linealidad de las relaciones que se dan sobre el territorio, y la diferencia de velocidades en las que actúan los distintos actores, nos exige hacer de la flexibilidad una característica esencial de la metodología de planificación estratégica. La multi-causalidad de los fenómenos que estructuran el territorio nos obliga a construir criterios cualitativos, entendiendo que nos es imposible la medición de estas cadenas causales y su reconstrucción completa en el tiempo; sin dejar por ello de edificar un marco profundo de acción y transformación que responda a una realidad cierta y veraz. Los fenómenos producidos sobre el territorio nunca actúan de manera aislada, lo que implica una responsabilidad a la hora de comprender las sinergias y la restricción que afectan los resultados de los procesos desatados. La presente ponencia corresponde a la Segunda Fase del proceso de identificación estratégica de los proyectos Plan Estratégico Territorial (PET) que se inició en el año 2005; dicho Plan es llevada a cabo por la Subsecretaría de Planificación Territorial del Ministerio de Planificación Federal y fue abordado sobre la base de tres pretensiones: institucionalizar el ejercicio del pensamiento estratégico, fortalecer la metodología de trabajo transdisciplinaria y multisectorial, y diseñar un sistema de ponderación de proyectos estratégicos de infraestructura, tanto a nivel provincial como nacional, con una fuerte base cualitativa. Este proceso dio como resultado una cartera ponderada de proyectos de infraestructura conjuntamente con una metodología que permitió consolidar los equipos provinciales de planificación, tanto en su relación con los decisores políticos como con los actores de los múltiples sectores del gobierno, y en estos resultados consolidar y reforzar una cultura del pensamiento estratégico sobre el territorio

Territory and Infrastructure : Strategic Identification and Project Pondering

El Territorio hoy es visto como una totalidad organizada que no puede ser pensada separando cada uno de los elementos que la componen; cada uno de ellos es definido por su relación con los otros elementos. Así, un pensamiento que integra diferentes disciplinas y saberes comienza a manejar una realidad que lejos está de definir certezas inamovibles, y comienza a vislumbrar horizontes estratégicos. La adaptación a la no linealidad de las relaciones que se dan sobre el territorio, y la diferencia de velocidades en las que actúan los distintos actores, nos exige hacer de la flexibilidad una característica esencial de la metodología de planificación estratégica. La multi-causalidad de los fenómenos que estructuran el territorio nos obliga a construir criterios cualitativos, entendiendo que nos es imposible la medición de estas cadenas causales y su reconstrucción completa en el tiempo; sin dejar por ello de edificar un marco profundo de acción y transformación que responda a una realidad cierta y veraz. Los fenómenos producidos sobre el territorio nunca actúan de manera aislada, lo que implica una responsabilidad a la hora de comprender las sinergias y la restricción que afectan los resultados de los procesos desatados. La presente ponencia corresponde a la Segunda Fase del proceso de identificación estratégica de los proyectos Plan Estratégico Territorial (PET) que se inició en el año 2005; dicho Plan es llevada a cabo por la Subsecretaría de Planificación Territorial del Ministerio de Planificación Federal y fue abordado sobre la base de tres pretensiones: institucionalizar el ejercicio del pensamiento estratégico, fortalecer la metodología de trabajo transdisciplinaria y multisectorial, y diseñar un sistema de ponderación de proyectos estratégicos de infraestructura, tanto a nivel provincial como nacional, con una fuerte base cualitativa. Este proceso dio como resultado una cartera ponderada de proyectos de infraestructura conjuntamente con una metodología que permitió consolidar los equipos provinciales de planificación, tanto en su relación con los decisores políticos como con los actores de los múltiples sectores del gobierno, y en estos resultados consolidar y reforzar una cultura del pensamiento estratégico sobre el territorio

Territory and Infrastructure : Strategic Identification and Project Pondering

El Territorio hoy es visto como una totalidad organizada que no puede ser pensada separando cada uno de los elementos que la componen; cada uno de ellos es definido por su relación con los otros elementos. Así, un pensamiento que integra diferentes disciplinas y saberes comienza a manejar una realidad que lejos está de definir certezas inamovibles, y comienza a vislumbrar horizontes estratégicos. La adaptación a la no linealidad de las relaciones que se dan sobre el territorio, y la diferencia de velocidades en las que actúan los distintos actores, nos exige hacer de la flexibilidad una característica esencial de la metodología de planificación estratégica. La multi-causalidad de los fenómenos que estructuran el territorio nos obliga a construir criterios cualitativos, entendiendo que nos es imposible la medición de estas cadenas causales y su reconstrucción completa en el tiempo; sin dejar por ello de edificar un marco profundo de acción y transformación que responda a una realidad cierta y veraz. Los fenómenos producidos sobre el territorio nunca actúan de manera aislada, lo que implica una responsabilidad a la hora de comprender las sinergias y la restricción que afectan los resultados de los procesos desatados. La presente ponencia corresponde a la Segunda Fase del proceso de identificación estratégica de los proyectos Plan Estratégico Territorial (PET) que se inició en el año 2005; dicho Plan es llevada a cabo por la Subsecretaría de Planificación Territorial del Ministerio de Planificación Federal y fue abordado sobre la base de tres pretensiones: institucionalizar el ejercicio del pensamiento estratégico, fortalecer la metodología de trabajo transdisciplinaria y multisectorial, y diseñar un sistema de ponderación de proyectos estratégicos de infraestructura, tanto a nivel provincial como nacional, con una fuerte base cualitativa. Este proceso dio como resultado una cartera ponderada de proyectos de infraestructura conjuntamente con una metodología que permitió consolidar los equipos provinciales de planificación, tanto en su relación con los decisores políticos como con los actores de los múltiples sectores del gobierno, y en estos resultados consolidar y reforzar una cultura del pensamiento estratégico sobre el territorio

Risk sharing with Multilateral Financial Institutions in infrastructure and energy project financing : effect on capital relief for commercial banks

(Matsukawa and Habeck, 2007) analyse the main instruments for risk mitigation in infrastructure financing with Multilateral Financial Institutions (MFIs). Their review coincided with the global financial crisis of 2007-08, and is highly relevant in current times considering the sovereign debt crisis, the lack of available capital and the increases in bank regulation in Western economies. The current macroeconomic environment has seen a slowdown in the level of finance for infrastructure projects, as they pose a higher credit risk given their requirements for long term investments. The rationale for this work is to look for innovative solutions that are focused on the credit risk mitigation of infrastructure and energy projects whilst optimizing the economic capital allocation for commercial banks. This objective is achieved through risk-sharing with MFIs and looking for capital relief in project finance transactions. This research finds out the answer to the main question: "What is the impact of risk-sharing with MFIs on project finance transactions to increase their efficiency and viability?", and is developed from the perspective of a commercial bank assessing the economic capital used and analysing the relevant variables for it: Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). An overview of project finance for the infrastructure and energy sectors in terms of the volume of transactions worldwide is outlined, along with a summary of risk-sharing financing with MFIs. A review of the current regulatory framework beneath risk-sharing in structured finance with MFIs is also analysed. From here, the impact of risk-sharing and the diversification effect in infrastructure and energy projects is assessed, from the perspective of economic capital allocation for a commercial bank. CreditMetrics (J. P. Morgan, 1997) is applied over an existing well diversified portfolio of project finance infrastructure and energy investments, working with the main risk capital measures: economic capital, RAROC, and EVA. The conclusions of this research show that economic capital allocation on a portfolio of project finance along with risk-sharing with MFIs have a huge impact on capital relief whilst increasing performance profitability for commercial banks. There is an outstanding diversification effect due to the portfolio, which is combined with risk mitigation and an improvement in recovery rates through Partial Credit Guarantees issued by MFIs. A stress test scenario analysis is applied to the current assumptions and credit risk model, considering a downgrade in the rating for the commercial bank (lender) and an increase of default in emerging countries, presenting a direct impact on economic capital, through an increase in expected loss and a decrease in performance profitability. Getting capital relief through risk-sharing makes it more viable for commercial banks to finance infrastructure and energy projects, with the beneficial effect of a direct impact of these investments on GDP growth and employment. The main contribution of this work is to promote a strategic economic capital allocation in infrastructure and energy financing through innovative risk-sharing with MFIs and economic pricing to create economic value added for banks, and to allow the financing of more infrastructure and energy projects. This work suggests several topics for further research in relation to issues analysed. (Matsukawa and Habeck, 2007) analizan los principales instrumentos de mitigación de riesgos en las Instituciones Financieras Multilaterales (IFMs) para la financiación de infraestructuras. Su presentación coincidió con el inicio de la crisis financiera en Agosto de 2007, y sus consecuencias persisten en la actualidad, destacando la deuda soberana en economías desarrolladas y los problemas capitalización de los bancos. Este entorno macroeconómico ha ralentizado la financiación de proyectos de infraestructuras. El actual trabajo de investigación tiene su motivación en la búsqueda de soluciones para la financiación de proyectos de infraestructuras y de energía, mitigando los riesgos inherentes, con el objeto de reducir el consumo de capital económico en los bancos financiadores. Este objetivo se alcanza compartiendo el riesgo de la financiación con IFMs, a través de estructuras de risk-sharing. La investigación responde la pregunta: "Cuál es el impacto de risk-sharing con IFMs, en la financiación de proyectos para aumentar su eficiencia y viabilidad?". El trabajo se desarrolla desde el enfoque de un banco comercial, estimando el consumo de capital económico en la financiación de proyectos y analizando las principales variables del riesgo de crédito, Probability of Default, Loss Given Default and Recovery Rates, (Altman, 2010). La investigación presenta las cifras globales de Project Finance en los sectores de infraestructuras y de energía, y analiza el marco regulatorio internacional en relación al consumo de capital económico en la financiación de proyectos en los que participan IFMs. A continuación, el trabajo modeliza una cartera real, bien diversificada, de Project Finance de infraestructuras y de energía, aplicando la metodología CreditMet- rics (J. P. Morgan, 1997). Su objeto es estimar el consumo de capital económico y la rentabilidad de la cartera de proyectos a través del RAROC y EVA. La modelización permite estimar el efecto diversificación y la liberación de capital económico consecuencia del risk-sharing. Los resultados muestran el enorme impacto del efecto diversificación de la cartera, así como de las garantías parciales de las IFMs que mitigan riesgos, mejoran el recovery rate de los proyectos y reducen el consumo de capital económico para el banco comercial, mientras aumentan la rentabilidad, RAROC, y crean valor económico, EVA. En escenarios económicos de inestabilidad, empeoramiento del rating de los bancos, aumentos de default en los proyectos y de correlación en las carteras, hay un impacto directo en el capital económico y en la pérdida de rentabilidad. La liberación de capital económico, como se plantea en la presente investigación, permitirá financiar más proyectos de infraestructuras y de energía, lo que repercutirá en un mayor crecimiento económico y creación de empleo. La principal contribución de este trabajo es promover la gestión activa del capital económico en la financiación de infraestructuras y de proyectos energéticos, a través de estructuras innovadoras de risk-sharing con IFMs y de creación de valor económico en los bancos comerciales, lo que mejoraría su eficiencia y capitalización. La aportación metodológica del trabajo se convierte por su originalidad en una contribución, que sugiere y facilita nuevas líneas de investigación académica en las principales variables del riesgo de crédito que afectan al capital económico en la financiación de proyectos.

Iowa DOT's Infrastructure Annual Status Report 2017

This is the Iowa Department of Transportation’s summary of project status for infrastructure projects that have been appropriated revenue from various funds including Rebuild Iowa Infrastructure, Revenue Bonds Capitals and Revenue Bonds Capitals II.