Moving to an “enterprise approach” is key to improving the efficiency of infrastructure projects in the UK.
Simon Murray, director of S A Murray Ltd and panel member of the Infrastructure Client Group (ICG), part of the Institution of Civil Engineers, said the traditional way of organising projects resulted in a “lose lose situation”.
Speaking at the CIPS Annual Conference, Murray said infrastructure projects in the UK cost up to 40% more than in other countries and the typical organisational structure of a client with a main contractor and subcontractors submitting low tenders was “not working any more”.
“It was not delivering the infrastructure we need and not delivering the revenue and profits for the companies,” he said.
“Productivity in the UK and elsewhere [for infrastructure] has not improved in 30 years. In manufacturing it has doubled.”
Under an enterprise approach, developed by the ICG under the banner of Project 13, the structure is an owner, advisors, an integrator and suppliers.
There is a focus on the needs of the ultimate user or customer, rather than the needs of the client, and an emphasis on delivering outcomes rather than outputs. Improving productivity and sustainability is key.
Commercial relationships are aligned with outcomes, which are set by the owner, while risks and rewards are shared. “You can’t pass on risk to contractors,” said Murray.
He said organisations including Anglian Water, Heathrow Airport, National Grid, Network Rail and Sydney Water Company had signed up to Project 13.
“The single most important idea behind Project 13 is moving from a transactional approach to more of an enterprise approach,” said Murray.
“The pursuit of lower prices has weakened the construction industry.”
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