Key takeaways from the FIDIC global infrastructure conference
ACE New Zealand Chief Executive Helen Davidson reflects on her recent trip to Geneva where she attended the FIDIC Global Infrastructure Conference. While many of the conversations at global level were familiar to what's happening here in Aotearoa New Zealand, she came home with a few golden nuggets – and a strong message that it's a good time to be us as the world needs our engineering sector more than ever.
As opening keynote speaker Andrea Rauber Saxer, Head of Bilateral Economic Relations for the Switzerland Secretariat for Economic Affairs, said: “In an interconnected world no nation can thrive in isolation. The success of one can and should contribute to the success of many.”
This stuck with me, not only in respect of the role we can play on the global stage contributing our knowledge and resources to uplift the global engineering and consulting industry, but also in how we work together in Aotearoa and leave competition at the door to overcome some of our biggest challenges – such as diversity, equity and inclusion; sustainability and achieving net zero; digital uplift for the sector; and fair commercial environments for everyone.
Saxer identified three areas of engineering that need to grow by collectively finding the best solutions across borders – engineering, re-engineering and political engineering. On re-engineering, Saxer spoke about work underway to reconstruct Ukraine’s infrastructure including through public and private investments, the establishment of a project delivery facility, and more sustainable and digital solutions. One initiative is Switzerland’s work to digitalise Ukraine’s public service to support faster reconstruction, including an app that citizens can use to apply for a building permit from their phone and receive direct payment of public grants to support their rebuild in a way that minimises corruption. Political engineering is about governments paying attention to creating the best environments for sustainable development, including consistent and stable policies, a flexible labour market and working with the private sector.
Taking the politics out of infrastructure
The political theme was carried forward in the panel I participated on titled The Politics of Infrastructure – influencing governments and persuading politicians. I spoke about what’s happening in New Zealand right now and the need to depoliticise infrastructure. I shared our approach to being a strong voice for our members through evidence-based advocacy, sharing human stories, industry collaboration, advancing Government’s goals, standing out from the crowd, finding our champions, building strong government relationships, and demonstrating our own investment to change by taking action first where we can. While we do enjoy an environment of open access to politicians in ways other countries don’t, the themes were resonated throughout the rest of the panel, with other key takeaways including the need to sell outcomes not process to politicians and entering all conversations with answers to the following questions: Where is the money coming from? What concrete results will voters see in a timeframe they care about? How does this proposal coincide with the government’s goals? And what do the think tanks and society think?
There were other conversations similar to those we're having in Aotearoa including enhancing educational opportunities and drawing women and minorities into the sector; unlocking opportunities for private sector investment; early engineering involvement at the project planning and preparation stages; the need to think about sustainability from an economic, environmental and social impact perspective; using technology like digital twins to enhance social impact and investing in new technology; using procurement as a tool to drive broader outcomes; and managing risk.
Practical steps to reduce risk on projects
The risk conversation was interesting, sharing practical steps we can take to reduce risk on projects. Mark Peterson, Managing Director and Construction Professional Liability Leader at AON in the US, noted that while the professional risk of engineers is marginally better than four years ago, risk management remains extraordinarily difficult. He said the talent gap comes to fruition where emerging professionals are receiving less oversight than they did in the past and this has directly led to project issues, from which he challenged us to think about how we organise our teams better to reduce risk on projects. He said there was an opportunity for much more peer review and testing of designs, and that doing this has proven to be extraordinarily useful in eliminating risks. While we adopt technology, we do need to pay close attention to the quality of data inputs. But above all else, focus on getting the basics right – be vigilant around the right level of oversight and training of emerging professionals, training your teams to understand risk and your business’s risk profile, create incentives within your company for good risk management, and practice “contractual hygiene” – meaning paying attention to clauses relating to the standard of care, duties and warranties, and other liabilities – and bringing insurers and lawyers in early and often to help ensure risk is put in the right place.
Golden rules needed to secure investment funding
While we don’t share the same corruption and security issues as many of our global counterparts, it's clear that we are not alone in suffering from a huge infrastructure deficit. With demands high and financing limited, the conversations focussed on our need to bring forward "investable" or "bankable" projects. Jerome Haegeli, Group Chief Economist at Swiss Re Institute, considered that we don’t have a problem with capital – we have a problem of trade ability and investable projects, with a very limited supply of investable projects in the global market. He championed a common set of rules or minimum standards for investment and the collection of robust data of financial performance to create investment benchmarks. He argued that getting money through to the right projects would be easier if we had a set of golden principles informing those decisions.
Julia Prescot, Deputy Chair of the National Infrastructure Commission in the UK, said we also need a better understanding of the risk appetite of investors if we are to attract investment, noting that the public and private investors have different drivers. She drew a strong parallel between operating good ESG in investment policy and return of investment over time, on the basis that people will retreat from engaging with an asset if they don’t trust the values behind the asset service. From her perspective, for investibility, ESG is a must have not a nice to have.
Another interesting note in relation to investable projects was reference to the World Bank’s Global Infrastructure Facility which is a global, open platform that facilitates the preparation and structuring of complex infrastructure public private partnerships (PPPs) to enable mobilisation of private sector and institutional investor capital in developing economies and emerging markets. It was cited that for every dollar invested through this facility, the return has been $100.
Defining what good looks like in carbon management
In carbon reduction, FIDIC and its Global Leadership Forum have launched the Carbon Collaboration Initiative, which several of our members are already a part of as part of their global business, including Mott Macdonald, Arup, Aurecon, WSP, and AECOM. The initiative is preparing a carbon management framework which will have wide application across the global engineering industry with ambitions to measure and improve our carbon management, influence change, and define what good looks like. It will apply to any project in any geography, any project delivery stage, and promote consistent carbon management across the industry. It is also a tool we can use to support conversations with clients and other stakeholders. This is an example of how we collaborate across borders to deliver better outcomes for our industry and society, together. Watch this space, as it is anticipated that the tool will be rolled out later this year.
Promote innovation, including in procurement
A final point to share from the Head of Procurement at the European Investment Bank was a plea to engineering consultants to prompt and promote innovation, including in procurement. While the European Investment Bank has committed to become the EU’s climate bank with strong environmental and social drivers (including in relation to local employment, sustainability, circularity, life-cycle costs and gender diversity) the needs relating to these outcomes are evolving rapidly and, to stay up to date, clients need support from our community to continue facilitating broader outcome change programmes through principle-based, agile and facilitative partnerships.
It's a good time to be us – the world needs engineers
In the closing leadership panel, Stantec President and Chief Executive Gord Johnson said it was a good time to be us – all the challenges of the world are things that our sector can help with and the world needs our engineering sector more than ever. With people as our assets and technology as our opportunity, it is a special time to consider how we can contribute to the world, how we can revolutionise our industry, create conditions where we can do our best creative thinking and attract the best talent, and change the narrative about the value we bring to build a strong social license for our work.
In a closing statement from Manish Kothari, President and CEO of Sheladia Associates and a FIDIC Board member, said: “The future is not something to be predicted, it is something to be achieved."
But it was our very own Penny Kneebone, Chief Executive of Tonkin + Taylor, who provide the last leadership statement of the conference, and most often quoted takeaway: “He aha te mea nui o te ao? He tangata he tangata he tangata! What is the most important thing in the world? It is people, it is people, it is people.