Decision-making principles for infrastructure projects
The Australian Infrastructure Authority [http://infrastructureaustralia.gov.au/] independently assesses projects, programmes and initiatives for inclusion on the Infrastructure Priority List of the Australian Government, the authoritative list of nationally significant infrastructure investments Australia needs over the next 15 years. It has recently published “Infrastructure Decision Making Principles”
[http://infrastructureaustralia.gov.au/policy-publications/publications/infrastructure-decision-making-principles.aspx], which are certainly of interest to all other countries managing large infrastructure projects and programmes.
One application area for infrastructure development is the growing cities in Australia, for example Melbourne and Sydney and their need for modernization and expansion [http://infrastructureaustralia.gov.au/policy-publications/publications/future-cities.aspx]. The paper models long-term growth scenarios for Melbourne and Sydney and assesses their performance across a range of indicators. These include performance of the transport network, access to jobs, environmental performance of the road network, access to and demand for social infrastructure, and access to and demand for green space [see also https://www.ipma.world/realizing-smart-cities-professional-project-programme-portfolio-management/].
Developed by Infrastructure Australia out of a recommendation in the 2016 “Australian Infrastructure Plan”, the “Infrastructure Decision-making Principles” are designed to ensure major public infrastructure investments deliver the best outcomes for the community and the best value for taxpayers. The new guidelines support greater transparency as well as accountability in infrastructure decision-making and help to reduce instances of major projects receiving funding before appropriate planning and assessment has been performed by the Infrastructure Australia, the nation’s independent infrastructure advisor.
The scale of investment in major projects and the long life of most infrastructure assets warrants rigorous decision-making processes. Amid tight fiscal constraints, it is vital that projects are only committed to once prior planning and assessment has been done. By establishing clear lines of responsibility and accountability, governments can provide assurance to the community that the projects that are being identified, prioritised, funded and delivered are in the public interest, and will provide value for money on taxpayers’ investments.
The 11 Principles of Infrastructure Decision Making should act as a guide for not only those making decisions as part of infrastructure development and delivery, but also for the broader community to use as a clear set of expectations with which to hold decision makers to account. The principles seek to complement Infrastructure Australia’s broader advice, including the Assessment Framework, by providing clear, straightforward statements of expectation for infrastructure decision-making in Australia:
- Governments should quantify infrastructure problems and opportunities as part of long-term planning processes. Plans should include analysis of the performance and service levels of existing networks under a range of future scenarios. Plans should also account for interdependencies with other infrastructure, changes in technology, market and regulatory developments that are likely to impact infrastructure services over the coming decades.
- Proponents should identify potential infrastructure needs in response to quantified infrastructure problems. These infrastructure needs should be framed as broad potential responses that are likely to be required under several future scenarios. Governments should publicly release information on strategic planning processes to explain clearly to the community what the problem is, the cost of the problem, and proposed solutions.
- Proponents should invest in development studies to scope potential responses. These development studies should seek to identify risks to the viability and delivery of these potential responses. As part of these development studies, proponents should consider a range of options, including those that make better use of existing infrastructure, or pursue reform of regulatory and pricing settings. Investment in development studies should be proportional to the scale of the problem.
- Where an infrastructure need is identified, governments should take steps to ensure potential responses can be delivered efficiently and affordably. Governments should look to protect sites and corridors for likely future infrastructure investments, and ensure infrastructure needs are appropriately integrated into long-term land use plans.
- Governments should undertake detailed analysis of a potential project through a full business case and should not announce a preferred option or cost profile before undertaking detailed analysis involving multiple options. Business cases should include rigorous examination of the potential project’s benefits relative to its costs, show the project to be resilient to change under a range of future scenarios, and show the split between public and private benefits.
- Proponents should assess the viability of alternative funding sources for each potential project. Proponents should look to minimise the call on public funds through consideration of a range of funding options, and determine a fair funding split between taxpayers, users and other beneficiaries.
- Project proposals should be independently assessed by an appropriate third party organisation. For all nationally significant projects, proposals should be submitted to Infrastructure Australia and align with the Assessment Framework. For smaller projects or programs of investment, proposals should be independently assessed through structured and transparent review processes in each jurisdiction.
- Governments and proponents should undertake meaningful stakeholder engagement at each stage, from problem identification and option development to project delivery. This engagement should seek early input and feedback from a range of stakeholders, including local communities, businesses and industry groups, infrastructure users, private infrastructure owners and operators, and, where public funding is required, taxpayers.
- Governments and proponents should publicly release all information supporting their infrastructure decisions. This should include all analysis underpinning long-term plans, option development and assessment, through to full business cases once they have been independently assessed. Governments’ and proponents’ protection of information should be genuine and justifiable. In particular, commercial-in-confidence protections should only be used where a material commercial risk exists. Where risks are time-limited, governments and proponents should release information in full once risks are no longer relevant.
- Governments should commit to, develop and release post-completion reviews. Delivery dates for staged reviews should be confirmed at the outset of a project, and released at set intervals following project delivery, including several years after commissioning. Reviews should focus on: – measuring whether the economic case for a project established in its business case is realised over time through performance measures – whether the project was delivered on time and on budget – whether unforeseen risks emerged and how they were managed – extracting lessons to feed into future infrastructure development and delivery processes.
- Where projects are funded as part of a broader program, the corresponding decision-making processes should be robust, transparent and prioritise value for money. The objective, scope, scale and expected benefits of a funding program should be defined and reported openly against clear assessment criteria and objectives. Funding programs should be routinely assessed and reviewed to ensure investments are delivering against these objectives.