In a fast-moving world where change is the new normal, government investment decisions within major infrastructure projects have never been more critical.
With delivery models evolving rapidly and external risks such as COVID-19 ever-present, collaboration between government, specialist advisors and the market is required to redefine the way infrastructure is funded and delivered.
Infrastructure Advisory Group (IAG) Directors Will Hayes and Nicole Evison have seen the changing face of infrastructure delivery first-hand through their combined 40 years assisting clients at the helm of some of Australia’s largest project transactions.
Will says the art of helping transform government infrastructure aspirations into reality has never been more finely balanced.
“It goes without saying that today’s mega-projects are never cookie cutter. Established procurement models are going through rapid change – PPPs, alliances and ‘D&Cs’ aren’t what they were before the turn of the decade,” he says.
“We’re seeing collaborative models use more PPP-style requirements and vice versa. Larger PPPs for instance are seeing a rebalancing of traditional risk transfer positions, such as for contamination, ground conditions and utilities.
“Risk transfer is becoming more granular rather than black and white – processes and documentation are increasingly nuanced with project specific detail – and there is a desire for both public and private parties to have appropriate interest, involvement and shared delivery incentive.”
Nicole says the diversity of change has created an environment where effective and authentic working relationships between specialist advisors and government is vital for project success.
“Government delivery agencies, leaders and project teams have never been more informed and projects are benefiting greatly. Given the evolution of delivery models and the investment landscape, it’s our job as specialist advisors to support project teams to solve issues by contributing to strategy formation and sharing relevant recent experience,” she says.
“History has shown commercial and transaction expertise supplements the skills of internal executives and is a proven way to get the best value out of projects. In that sense, it’s our job to act as a right hand for senior government leaders and go on the journey with them.
“We are there to assist through the business investment cycle and help structure commercial principles and frameworks including things like, procurement strategies, financing arrangements and risk allocations that are right for the times and market.”
With a swathe of infrastructure spending around the country committed and more funding to come as the country recovers from COVID-19, project delivery demands will continue to accelerate as the desire for activity hastens.
But Will says this only heightens the need to collaborate effectively to maximise the operational and cost efficiency of major projects as size, complexity and risks grow.
“Success starts from making the right decisions from the outset, which in turn sets you up to make the best decisions as you move through the different project phases,” he says.
“When that happens, our client’s projects flourish, which is our ultimate measure of success.”
To find more about how IAG can provide strategic project leadership, commercial and transaction advisory services, visit infragroup.com.au/services.