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Driving Sustainable Change Through Infrastructure Megaprojects

Date: 02/19/2013
Source: KPMG Romania

From managing risk and meeting timelines to selecting the right technology and investment partners, megaproject delivery offers important lessons and approaches that will resonate with almost any infrastructure stakeholder.

In the most recent edition of Insight magazine, KPMG explores the complex world of infrastructure megaprojects and provides an informative and practical view on some of the key challenges and opportunities impacting this important sector.
This latest edition features a ‘Spotlight’ special report on infrastructure in Africa – a continent that holds rich opportunities and benefits for those that can successfully manage associated risks and challenges. Through a series of interviews and roundtable discussions with industry leaders, Insight: Megaprojects shares perspectives on megaproject delivery around the world, some of which are detailed below.

Daniela Nemoianu, Executive Partner of KPMG in Romania states: “The world’s pressing need for infrastructure improvements and investment still looms large on many national government’s agenda, representing a problem which is not about to disappear just because cash is harder to come by. These are projects which are essential to life itself, which the governments simply cannot afford to put to one side, pending a return to happier economic times. The constraints on public sector funding remain though and this is why we could now see up an upswing in the number of infrastructure projects being delivered by Public-Private Partnerships (PPP), tapping into private sector funds and resources to deliver public infrastructure amenities. Romania has to gear up rapidly to face the global race to develop efficient and sustainable economic infrastructure and the nation’s future economic growth depends on the success of a rapid and coordinated national approach to the revitalisation of Romanian infrastructure.”

Private Public Partnership (PPP) structures for infrastructure development are likely to get a boost in Canada as public organizations reassess their use of the model. PPP Canada, a crown corporation dedicated to growing the PPP market in Canada, is currently assessing the model for delivering First Nations schools as well as federally operated toll bridges. In the United States, a number of new transportation projects are now moving forward in the Commonwealth of Virginia. After suffering several setbacks, the USD925 million I95 HOT/HOV Lanes Project reached financial and commercial close in July 2012. The project compliments the Capital Beltway project and is expected to help address the significant congestion in the area. Cleanup efforts are now underway in the aftermath of the devastation of Hurricane Sandy on the US East Coast.

With tourism expected to rise as a proportion of Mexico’s Gross Domestic Product (GDP) plans are now being drawn up for a new global tourism city in Caribbean Mexico. The privately-led project will be the largest private development in the country’s history and will focus on providing tourists with an environmentally-friendly and well-planned vacation experience. The tourism industry also fuels megaprojects in Brazil. With the FIFA World Cup and the Olympics rapidly approaching, the country is a hotbed of infrastructure development, with activity in almost every sector and region across the country. But other non-sports related projects are also underway, such as the USD3 billion PPP project aimed at delivering digital educational content to more than 4,000 public schools in the State of Sao Paulo.

For its part, Australia is in the midst of a resurgence of infrastructure delivery with a range of new projects either being planned or executed across a variety of sectors. A proposed high speed rail line will move ahead across the east coast connecting Brisbane to Melbourne. On the west coast, the Oakajee Port and Rail project is nearing its scheduled completion date, while a similar scheme for an intermodal transport terminal at Moorebank (on the outskirts of Sydney) also gained approval from the Commonwealth Government. In South Africa, the keenly-pursued metro rolling stock replacement program of PRASA has announced the preferred bidder/manufacturer. This replacement of rolling stock is one of the world’s largest new metro fleet programs in many decades and – at around USD17-20 billion over the next 20 years – has been one of the most contested infrastructure projects around the globe.
India continues to roll out its infrastructure investment strategy with the development of a new high speed rail project that will connect Mumbai and Ahmedabad along a 423 kilometer route with trains capable of traveling at 300-350 kilometers per hour. While India currently boasts one of the world’s largest rail networks, the project will be the country’s first high speed rail line. The Government of Goa, a State located in Western India and a top destination for international and domestic vacationers, will also enhance its global connectivity by building India’s second largest greenfield airport.

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