With the Australian federal and state governments placing their bets on an unprecedented infrastructure pipeline for post-COVID economic recovery, InEight’s Queensland Government Account Director, Derek Griffiths, says generating a strong ROI on infrastructure projects has never been more critical.
Australian governments are committing to a record number of ‘mega’ infrastructure projects and with that comes greater risk of budget blowouts, as some industry observers have warned.
Grattan Institute’s 2020 report, ‘The rise of megaprojects: counting the costs,’ found that the value of work underway on road and rail projects for Australian governments exceeded $120 billion for the first time in March 2020. Not only is the amount of work at an all-time high, so are the size of projects being delivered. The same report found that the value of an average road or rail project being built in Australia has more than doubled between 2015 and 2020; from $430 million to $1.1 billion.
The sheer scale of these mega projects has raised concerns within the industry regarding massive budget overruns, which in the case of government-owned projects, leads to taxpayers bearing the brunt.
A May 2021 report by the Grattan Institute, ‘Megabang for megabucks: driving a harder bargain on megaprojects,’ estimated that roughly 25 per cent of projects in Australia end up costing more than what was initially signed between the government and contractor, with reasons ranging from lack of competition to lack of transparency and old procurement practices.
And while the Australian Government is looking to improve its procurement practices, with a parliamentary committee set up in June to investigate the issue, InEight’s Queensland Government Account Director, Derek Griffiths, believes there is more that project owners – governmental or non-governmental – can do to improve on the transparency front.
Despite having common project goals, differences often arise between contractors and owners as budgets balloon out that, at the heart of it, come from a lack of information being shared at crucial times.
STARTING AT PRE-PLANNING
Successful pre-planning for any project, Griffiths points out, starts with accurate cost estimation.
“One of the big reasons any project fails to meet its budget targets is because people don’t estimate the values correctly,” he says. “What tools like InEight’s project management software provide is a platform where you can have access to the historical record of materials used, labour, and everything else you need for a realistic estimation.”
Equipped with an Augmented Intelligence feature, the InEight project management software can store information such as historical material costs and rates of productivity from similar projects delivered in the past to provide a more defendable, realistic estimate based upon past performance.
“It’s quite a simple thing,” says Griffiths. “By getting all the information upfront and putting it into a system, you can minimise the changes down the track as the project progresses through different stages. It also creates an open communication channel between the owner and the contractor, so that unexpected changes down the line can be avoided.”
A COMMON DATA ENVIRONMENT
So what does the contractor stand to gain from pulling back the curtain on project details for the owner?
“From the contractor’s point of view, it’s all about transparency and building a stronger relationship with the project owner. And from an owner’s perspective, obviously they would want to have as much information
as possible available to them because they have a responsibility for maintenance and operation of the projects throughout their lifecycle,” Griffiths says.
To elaborate further on how an integrated data platform benefits both contractors and project owners, he uses an example from a project delivery model introduced last year by Sydney Water, known as the P4S – Planning for Success – framework.
“As part of this platform, all of the contracting parties delivering projects to Sydney Water are obliged to provide information on the Common Data environment (CDE), which acts like a hub by which Sydney Water can simplify procurement, drive better outcomes for customers and optimise value throughout the supply chain,” he explains.
“As an owner, you should be able to oversee all of the project’s data because you own the asset. And at some point, you would want to go towards building a digital twin for your project, and you can’t really do that unless you have clean data.”
‘Clean data’ is the term Griffiths uses to describe correct, accurate information fed into the CDE. To further explain how the InEight CDE platform model works, he uses the example of a LEGO model.
“With InEight, you have your platform, your CDE, and then you’ve got all these modules which fit into it. Like a LEGO model, you can take the modules out and exchange them. But the point is, if you have all the data in one place, like a hub, you can use that information through the life of the project, from inception to decommissioning.”
This digital platform becomes particularly critical as the size of data being fed into it gets bigger, Griffiths explains.
“Everywhere, we are seeing the rise of mega data, which is data you acquire from sensors and SCADA systems that form part of the internet of things technologies. In the case of water projects, this could be sensors that measure pressure in the pipes and detect the changes in pressure.
“Eventually all of this data could be stored in the asset’s digital twin, which is a 3D model of the project. But unlike conventional 3D models, the digital twin is alive and active. For example, if you have a perfect model of your water system and you have the location of all the pipes and equipment marked on it, so you can ‘play god.’ You can pump in the data from all the sensors and breathe life into the model.”
A SINGLE SOURCE OF TRUTH
Eventually, what a digital twin offers asset owners and project stakeholders is a single source of truth, Griffiths says.
“When everything is stored on the CDE and it’s accessible in real time, you can access the information from anywhere, anytime. Since the InEight CDE is cloud-based, you can access the most up-to-date information about your project at any given time.
“In an alternative scenario, it’s quite common for people working on a project to access different versions of the designs, which can be disastrous sometimes. For example, in the water sector, there are situations where the maintenance guys have had the wrong information and dug down and hit a gas pipe because they were unaware of the changes.”
Using the example of InEight’s Document and Model solutions, Griffiths further explains how the collaboration between all involved parties works in action.
“Document control and model management are the spine of a project. It’s like the nervous system where all the information flows through and is directed to be allocated correctly. With the InEight Document and Model solutions, you can store models, information, documents, visual styles, and much more on the InEight server and sync it to your local hard drive whenever you’re online.
“What this does is it takes the complexity of managing different file types out of the equation. You can sync the data on your tablet and bring it to the field. You can then mark up any changes that are necessary and once verified, this information can be put through the drawing officially. The owner can see and verify the design reviews as they happen. So, it’s an ongoing design review process between the owner and the contractor.”
With all the above aspects, what Griffiths says is the ultimate outcome for asset owners is better accountability.
“It all comes down to liability. Owners are liable for their assets throughout the asset life. If a contactor installs a pump and if the pump explodes, it’s the owner who’s liable for it. That’s why information is important.”
WHAT’S THE END GAME?
Building a living, breathing, digital twin for mega infrastructure projects might seem like a considerable feat in itself considering the varied opportunities it offers to ongoing project maintenance and owner liability. But it does not stop there, Griffiths says.
The end game, in his vision, is when the in-coming data can feed into automated maintenance processes.
“Where we would want to get to is a point where we take all this incoming data and learn from the data and apply that to Artificial Intelligence (AI) and the robots can go out and do the maintenances tasks. I’ve nicknamed it ‘Dual Time’ because in this scenario, things are happening simultaneously; data is flowing one way and maintenance is happening at the same time.
“So, the ideal for the future is that we’ve got this digital transformation done, we’ve got the model, and we’re using the data that’s being fed into the model. How do we go about doing the maintenance and use the AI to learn from everything to run things more efficiently? That’s something that comes from having a central platform like InEight. You cannot process that data if you’ve got a jigsaw of programs in your IT system.”
But the motivators for stepping into the digitalisation journey are already here, as Griffiths concludes.
“There is opportunity for gains and improvement to benefit all stakeholders. Don’t expect that to be easy, though. Operating in a true partnership is often difficult when constructing a capital project. Owners are left feeling like they are being held at arm’s length and are not true stakeholders in their own projects. But while it may feel like contractors are intentionally withholding information, the truth is they both absolutely want the project to succeed. After all, it’s in everyone’s best interest that it does.”