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Infrastructure Australia’s recently released 2019 Infrastructure Audit calls for a massive increase in infrastructure spending to an estimated total of $600 billion over the next 15 years.
But given that more than $20B in Australian infrastructure projects have already been delayed, cancelled or mothballed over the past decade due partly to community opposition – will a bigger spend be acceptable to communities? Does an infrastructure cash splash have a social licence to operate?
Stakeholder and community pressures influence delays and increase costs
Research from Crawford School of Public Policy at the Australian National University (ANU) shows that, for any increased infrastructure spend to be successful, communities must be front-and-centre of planning and delivery.
The Next Generation Engagement Program is a world-first research initiative examining the relationship between community engagement and successful infrastructure delivery. The program is supported by industry, government and civil society partners from all sectors of the infrastructure value chain.
The Next Generation Engagement Program’s 2019 State of Infrastructure and Engagement Survey found that infrastructure sector professionals rank the twin challenges of ‘stakeholder and community pressures’ and ‘regulatory and planning issues’ as equal firsts among the most influential factors affecting project delays or cancellations. The survey, now in its second year, demonstrates that the most impactful (read, costly) stakeholder pressures occur during planning and delivery phases (65 per cent).
“If Australia wants to deliver even more infrastructure in increasingly congested areas, then we need to get a lot better at bringing communities along for the journey,” Research Director, Associate Professor Sara Bice said.
“We need to do that in three ways – first by adopting a community-centric approach to the planning and delivery of projects, second by putting a real price to social risk and third, by fostering and maintaining a pipeline of appropriately skilled engagement professionals.”
Without these steps Associate Professor Bice says the cost of conflict with and for communities may continue to rise.
“Infrastructure professionals have told us for two consecutive years in the State of Infrastructure and Engagement Survey that stakeholder pressure is a leading contributor to project delays and cancellations. That situation is exacerbated when communities experience the delivery of a number of different projects at the same time, what we think of as ‘cumulative impacts’.”
“We know that project delays and policy back-flipping on major projects negatively influence global infrastructure investor confidence. We also know that social and environmental issues are at the heart of more than one-third of contractual disputes. What’s important here is that communities are not to blame. These statistics show that government and industry have work to do to understand community needs and concerns, and to respond in a meaningful way.
“Our work certainly supports the conclusion from Infrastructure Australia that engagement with communities is critical and that government must consider the views of communities when planning and investing in major infrastructure,” she said.
“We can meet the needs of our growing population, but only if we start making evidence based decisions in infrastructure planning and delivery, including in our decisions about how we work with impacted communities.
An evidence-based approach to managing community partnerships would see us:
1. Adopt a community-centric approach that reduces costs
o Developing infrastructure WITH communities, not for them and certainly not in spite of them
o Selecting the most appropriate timing and approach for engagement based on evidence, not politics
o Understanding how to create a community-centric culture, starting with embedding the responsibility for community engagement across the entire infrastructure project delivery team
o Incentivising good community outcomes starting with appropriate contract terms between clients and major contractors
o Measuring the value created through best practice engagement and more accurately recording and limiting the costs of poor practice
o Understanding the real cost of cumulative impacts for communities in order to support community resilience and wellbeing, and to start mitigating impacts through a planning and delivery process that reflects the experiences of citizens.
2. Start putting a real price to social risk
o Anecdotal evidence suggests that social risks feature among the top risks for many projects, yet capacity to identify and evaluate precursors of social risk and the success (or otherwise) of current social risk management practices remains limited.
o Common precursors of heightened social risk need to be better identified, analysed, and the efficacy of existing risk management methodologies and pricing models refined to integrate social risks.
3. Foster and maintain a pipeline of appropriately skilled engagement professionals
o The skills of engagement professionals are in higher demand than ever before. Yet our interviews with infrastructure professionals and the findings of our 2nd State of Infrastructure and Engagement Survey indicate that there are concerns about how engagement practitioners are regarded by their non-engagement peers and the career pathways open to practitioners. This needs to be addressed.
“The benefits of such an approach for communities and for infrastructure projects are clear. Perhaps the additional carrot for Governments in Australia is how better evidence could support improved investor confidence. Data and analysis can inform institutional investors, including as superannuation funds, currently reluctant to get involved in the financing and development of infrastructure projects, largely due to social risks.”