Author: Garry Bowditch

Paying Forward to Future Generations: How infrastructure can do more

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Infrastructure decisions act like ripples on a lake, radiating out in time and space that can both help and hinder future generations. The quality of those decisions is set here and now.

This piece was published by Oxford University Press on 25 April 2023. Follow link: Oxford Open: Infrastructure and Health

Abstract

When infrastructure is done well, it forms the fabric beneath us that enables individuals, businesses, and communities to experience more prosperous and inclusive living for current and future generations. In this brief commentary paper, I offer arguments and case examples from my recent book ‘BIG FIXES: Building Bridges to an Inclusive Future’. 

Unfortunately, as an infrastructure practitioner for over 30 years, I have observed a global shift among policymakers to exaggerate the benefits of investing in infrastructure without accountability and a framework for governance to assure positive long-term outcomes. In essence, infrastructure has fallen victim to short-termism. 

The central thesis of my book for readers and future contributors of Oxford Open Infrastructure and Health (OOIH) aligns well with the journal’s mission for infrastructure and health scholarship that fosters ‘Big Connections’. My argument is as follows.

Is your vision of infrastructure about physical assets like roads, bridges, tunnels, power lines, water pipes, schools, and hospitals? If so, then it is too narrow. There is an urgent need for policymakers, investors and scholars to widen their perspective to consider infrastructure as a gift that current generations pay forward to future generations.

The infrastructure decisions of our forebearers act like ripples on a lake, radiating out in time and space. These ripples can amplify benefits into the future, like favourable tailwinds. But equally, where short-sightedness has taken root in the past, the consequences of earlier infrastructure decisions (or none at all) can saddle future generations with the burden of headwinds – slowing, dragging upon efforts to improve.

When a society invests in infrastructure, they express hope and optimism for the future. However, that aspiration implies a big bundle of expectations, including health and economic wellbeing and sustaining and building trust between people and the institutions created to serve them. Moreover, as environmental and social issues grow in importance, society has less room to be complacent with non-responsive infrastructure blocking adaptation and innovation to support new growth. These are examples of the lens to view ‘Big Connections’ referred to by OOIH.

Introduction

At its heart, OOIH invites contributors and readers to think more critically about how institutions responsible for infrastructure and health need to change and the necessary evidence to guide reform. For example, public policy settings and procurement practices for infrastructure projects overemphasise the importance of construction and neglect the governance regimes necessary for assuring positive economic and social outcomes for decades ahead.

Infrastructure provision is a litmus test of a society’s stewardship – planning and acting responsibly long term. So it is alarming how myopic infrastructure governance has become and short-term expediency the norm in fulfilling political ambitions and satisfying powerful vested interests. Hence, this is the reason a reset is vital.

It is time for scholars to help illuminate the case for change so citizens and policymakers can be encouraged to think and act long-term. What is needed is a ‘true north’ beacon where infrastructure provision and health policy work together in making an amplified positive impact on people and the planet. 

That is why I encourage readers and contributors to OOIH to adopt a wide-eyed view of infrastructure where services that flow from physical assets matter most in shaping our sense of safety, wellness, liveability and optimism for the future. 

Lighting the Way

Understanding the ‘big connections’ between health and infrastructure is surprisingly vacant. There is a real opportunity for scholars to make their mark. Yet, despite its importance – researchers, policymakers and practitioners find themselves in a humble position of knowing a great deal less than we should. Unless redressed, we can expect short-termism to prevail without another competitive framework to shift decisions that address long-term impact.

Building a community of practice and a pool of scientific knowledge relevant to the challenges ahead will need people to be restless with the status quo and willing to take risks. Pursuing small and narrow questions may serve certain risk-averse work cultures; however, in this domain, it may increase the risk of irrelevance. 

The task is to illuminate the field of play with floodlights – to reveal the breadth and depth of complexity – the contours of institutional, environmental and people landscapes associated with the interactions of health and infrastructure. The skill sets most valuable are subject matter experts committed to interdisciplinary inquiry and collaboration because so much of quality of life is multi-dimensional and pivots on the quality of relationships with citizens and institutions of government and business. 

Case Example: Birthing of the ‘Weekend’

As a social, health and economic reform, the idea of a weekend off was radical and highly experimental in 19th-century Britain. But interestingly, it did not result from a government mandate but evolved through grassroots activism, trade unions and industrialists[1]. All these vital stakeholders were concerned with the negative impacts of the industrial revolution – long hours, repetitive and dangerous work and the flow on consequences of exhaustion, family breakdown, childhood welfare, loneliness and isolation. 

The activism that birthed a five-day working week required a collaborative mindset and a sense of purpose that transcended self-interest and a commitment to seeking a better outcome for the whole. These similar threads compel us again to build the case for change, in this case, for more excellent stewardship in making infrastructure and health work together to achieve genuinely transformational outcomes for current and future generations.

Infrastructure – a means to an end

Too often, modern infrastructure is slow to adapt and overly cautious in permitting innovation. These barriers can cause enormous inertia in improving wellbeing. This dysfunction must not persist.

From this perspective, I wrote ‘BIG FIXES’ because, over three decades, I observed that citizens no longer have sufficient control or agency over crucial questions of what projects get funded, why and assurances of long-term impacts. 

Infrastructure must resist devolving into an endless cycle of more construction jobs and short-term economic stimulus – it is not an end in itself. Instead, infrastructure should be a means to an end – where these public assets and services are a vehicle for reciprocity by enriching connections across society, making it easier for people and institutions to adapt and be flexible to ever-changing needs and new opportunities. 

New technology and digitisation of infrastructure services can renew the grassroots power of the people. However, the key to this transformation must recognise that infrastructure is a dynamic and adaptable service, not just a physical asset to build, leaving its impact for others to be concerned with later. Instead, it is a means to an end – helping others achieve whatever they deem necessary in their life and business aspirations, from decarbonising economies to more profound social and economic inclusion. 

Fixing short-termism in infrastructure requires leadership across society. BIG FIXES, and OOIH, seek to challenge your perspective and help focus on the challenges and the size of the potential benefits that flow from reform. But, importantly, we first must recognise that most people take infrastructure for granted because they are busy with their own lives and probably do not think of it immediately as a real presence in shaping the quality of life. However, their busyness with other things does not suggest an indifference to infrastructure; instead, they choose to place enormous trust in those responsible for infrastructure provision to get it right. 

The research community of infrastructure and health experts can help preserve and build upon that trust through evidence and case examples – because infrastructure is incredibly personal to people’s wellbeing. After all, it determines where we live, what jobs we can do, and how healthy we are. It also determines the types of jobs our children will do, so infrastructure and health research can catalyse positive change. 

Alternatively, when infrastructure is poorly conceived and slow to adapt to the shifting needs of society, quality of life is at risk, and community trust diminishes in responsible institutions. 

As a community of practice develops around the OOIH, we must play our part to bolster health and infrastructure policy and practice working together. If successful, then OOIH would have helped today’s endeavours to pay forward to future generations. Securing greater trust and collaboration in society is our long game – unleashing human ingenuity and creativity that fashions the future. 

Case Example: Ride sharing 100 years too late

During the early 1900s, with the introduction and rapid take up of private motor vehicle ownership in the United States, a ride-sharing scheme was started in 1914 by L. P. Draper, a car salesman from Los Angeles. He observed very long queues to catch the public transport trams in the city, so he set up a sign on his car alongside these queues to say he would take passengers wherever they wanted to go for a ‘jitney’ (slang for a nickel). 

Draper met with extraordinary success. By 1915 there were 50,000 rides per day in Seattle, 45,000 rides per day in Kansas and 150,000 in Los Angeles. However, Uber founder Travis Kalanick says that the thriving Jitney ride-share was 

regulated and taxed out of existence within just a few years. The local monopoly public transport authorities had convinced policymakers to impose onerous conditions and licensing fees. The government, which owns the public transport monopolies, saw the ride-sharing scheme as pernicious, according to Kalanick[2]. 

Since the demise of the Jitney, the global economy had to wait almost 100 years before another scaled attempt at ride-sharing began. In the meantime, without ride-sharing, car ownership exploded, along with congestion, massive carbon emissions and wasteful spare capacity. As a result, private vehicles are typically in use for less than 10 per cent of their productive capacity.

The loss of ride-sharing services has had severe consequences as car fleets worldwide struggle to be fully effective. The mass adoption of motor vehicles has shaped every city with ever-increasing road capacity and the loss of amenities to accommodate near-empty cars. Furthermore, Kalanick argues that at least 30 per cent of cities’ building stock is devoted to car parking, again for mostly driver-only cars.

Provocation for OOIH

The demise of the Jitney is an excellent case example for the OOIH community to reflect upon and debate. With the benefit of hindsight, Jitney was an innovation taking advantage of the leap in technology with the advent of private motor vehicle ownership that upset incumbents like public transport operators. In the wash-up, Jitney’s innovative new services got set aside in favour of the status quo – public transport. However, were the benefits relative to the costs justified? And if so, how did that change over the short, medium, and long term? 

Looking at Uber, Lift and other ‘mobility as a service’ businesses today, their unique business models pivot on flexibility to quickly respond to changes in demand. In contrast, traditional taxi services and public transport are more rigid and less able to change short-term supply in response to demand. 

But as with the Jitney, fundamental issues emerge from modern ride-share schemes. For example, serious questions persist today about ride-share driver pay and conditions – such as access to paid sick leave and minimum wages. These questions are even more critical when ride-share drivers are disproportionately people of colour and immigrants.

How should these sensitive issues be handled, considering that the ride-share business model requires high flexibility from drivers to log on and provide service on demand? Normalising drivers to standard employment contracts will have a peculiar set of costs and benefits for the drivers and the broader ride-share ecosystem. How can these be better examined, and is the current focus on pay and conditions too narrow? 

Is a border perspective needed? For example, what are the issues to consider regarding the algorithms’ governance that impact independent contractor drivers’ ability to perform their duties fairly and reasonably? Unfortunately, the transparency around algorithms that allocate and despatch jobs is poor. Furthermore, a lack of transparency is frustrating for stakeholders to trust one another and prevents a maturing of the debate to finding better solutions.

Regardless of the merits of different perspectives, the community of OOIH  help must define a place where these issues are peeled back and examined rigorously with a clear objective of clarifying the short-medium-long-term consequences. As a result, we must be less compelled to react to the obvious and to drill into problems to understand the complexity at play as a crucial ingredient to mapping possible solutions with positive impacts.

Stewardship – a vital missing link

Continuing an unbroken chain of stewardship from generation to generation must be embedded as a vital goal in governing society. No matter how weak stewardship may appear, our urgent duty is to strengthen its effectiveness with evidence, frameworks and case examples that build the momentum for disrupting short-termism. 

Stewardship that is ongoing and continuously improving is important because future generations are hopefully less likely to break the ripples of goodwill and competence when these are already present in peoples’ experiences. 

As a researcher and infrastructure practitioner, it is astonishing how society is becoming more complex, diverse and interdependent. These developments may explain why top-down bureaucratic solutions are far less effective in meeting community needs. Instead, more nuanced grass-root responses can better fulfil a wider diversity of needs if given a chance. Moreover, communities yearn to co-create solutions that continually adapt to meet their unique needs. They also increasingly question old-world notions of centralised, one-size-fits-all edicts from government and business. 

Scholars must help redirect institutional efforts to the diversity and complexity of grassroots responses that can emerge from communities to address their challenges and aspirations.

Fixing infrastructure to adapt as a service to changing needs of people is a first step to addressing many of society’s broader ills. Doing good infrastructure must draw on our better selves to think and act long-term and carry on a chain of benevolence. Stronger institutional accountability to citizens is vital in ensuring we can navigate a safe passage through the countless uncertainties we face and be more adaptive to a changing world. 

Undoing short-term, reactive and low aspirational intentions in our institutions are fundamental. There is no time to waste in rebuilding trust; collaborations, accountability, and community action are essential in getting to a better place. Contributing to OOIH is worth your time and commitment.

*Garry Bowditch is an Oxford Open: Infrastructure and Health Editorial Board member and author of BIG FIXES: Building Bridges to an Inclusive Future.

[1] Brad Beaven, History of the two-day weekend offers lessons for today’s calls for a four-day week, The Conversation, 3 January 2020

[2] Kalanick, T. Uber’s plan to get more people into fewer cars, TED ideas worth spreading, February 2016.  

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Happy 90th to an Aussie Icon – Sydney Harbour Bridge

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A version of this article was published online in the Australian Financial Review on 19-20 March 2022.

As Sydneysiders celebrate the 90th Anniversary of the Sydney Harbour Bridge (SHB) this weekend, we do so with gratitude for the fantastic benefits of our ‘coat hanger’ in Sydney and Australia. However, let’s also reflect on what we need to do to ensure those living in 2112 – just 90 years from now – might show a similar level of gratitude for our stewardship today.

What is intriguing about the SHB is its immense size. There were very few cars in the formative planning years leading up to construction in 1922. For example, in 1919, just over 23,000 motor vehicles were registered in NSW. Yet upon completion in 1932, the SHB could handle 20,000 cars per hour – a staggering excess capacity that would trouble infrastructure ‘business cases’ today.  

In 2022 there is no sense of extravagance – SHB is a vital corridor over-used and over-relied to keep commuters moving. It enabled Sydney to be globally competitive, attracting a Manhattan-quality workforce, underwrote excellent liveability and a place for entrepreneurs to catapult ideas to market.

Its grand arches have defined iconic images of Australia and created a much stronger sense of place and national pride. We are celebrating the alchemy of cities through the bridge in lifting our living standards and productivity that flow across the nation.

But don’t make the common mistake of thinking the SHB reflected a golden era where politicians were visionary and the community trusted. Instead, there was a prolonged incubation – it took 107 years to start construction finally. 

Picture: New South Wales State Library

After multiple failures to approve designs and pitches from private consortia through the 1800s, two Royal Commissions ensued that was pivotal to the SHB we have today. They helped clarify the issues – especially in protecting the freedom of maritime traffic on the harbour – the lifeblood of the colony. There were legitimate concerns a bridge would interfere with maritime traffic, and for a period, a tunnel was preferred but ultimately rejected as unworkable given the technology at the time.

Despite mounting pressures, severe outbreaks of disease, congestion and shortages of water and land in the colony – delays and indecision persisted about a possible solution. Accessing land on the north shore was paramount, but community concerns about toll gouging on a proposed bridge by private investors were widespread. Also, there was extreme resistance to more public indebtedness among country people to fund the bridge as this threatened government subsidies to prop up country rail services. 

J.J. Bradfield was more than a great engineer; he was also a promising economist. He understood that the viability of the bridge demanded that benefits should exceed costs. Inspired by US social reformer Henry George, Bradfield conceived a land betterment tax recognising that land values at both ends of the bridge will rise dramatically. As commonly referred to today, value capture would fund the bridge, but it was torn apart in just over a decade (much like the Melbourne rail loop). As a result, NSW was on the brink of bankruptcy. Those peddling value capture as the silver bullet to fund grand projects like high-speed rail should see this as a cautionary message.

We should celebrate the achievement of SHB and those that made it happen. However, while megaprojects are the weapon of choice today to tackle our challenges, we should better acknowledge their many limitations. While Sydney Metro has the potential to be a great legacy to the future, the size and complexity of our challenges demand unrelenting transparency, leadership, and accountability to the community.

There is so much more to do, but happy 90th to an Aussie icon for now.

ESG Complacency no longer cuts it

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By Garry Bowditch*

A version of this opinion piece appeared in the Australian Financial Review on Wednesday, 16 March 2022

Over a decade ago, the world that birthed the ESG juggernaut had not fundamentally changed from today. Instead, high-level principles and manifestos helped build a wall of money, a platform for announcing good intentions, but real change and impact is missing.

There is an urgent need for an honest conversation about rescuing ESG from complacency. Loss of transparency and more delistings of assets from public exchanges like Sydney Airport make ESG friendly investors more critical. But, are they up to the task to tackle entrenched and systemic problems across its three domains: environment, social, and governance systems when accountability and public reporting is so unreliable?

Bloomberg expects ESG funds to exceed $US53 trillion by 2025 and account for one-third of all assets under management. Such an eye-watering pool of funds should suggest we are amid an ESG revolution. But, unfortunately, the answer is far from clear.

One take-out of the last decade is how hard it is to assess an organisation’s ESG performance. Lack of rigorous conceptual frameworks, quality data and corporate cultures shunning transparency undermines convictions. Vagueness in defining what good looks like – both in transition and its final state needs replacement with precise and clear thresholds of ESG performance.

A big part of the problem is that too many ESG proponents focus on an organisation without proper consideration to the environment, geopolitical, economic, industrial and social systems. The founders of ESG had got this right in principle, but unfortunately, as it grew in the marketplace, concepts and methods have drifted into being too myopic and strident. Urgent action is needed to get ESG connected back to systems thinking.

BHP’s Mike Henry typifies CEOs at the pointy end of the ESG journey. As a global mining and resource company, they dig up the planet and disrupt the environment daily. At the same time, their research and output of precious minerals and metals enable new technologies to decarbonise economies and power up renewable energies. But, equally, efforts to eliminate modern slavery and increase diversity can be overshadowed by a more zealous focus just on the environment.

No doubt, BHP brings a ledger of positives and negatives to ESG, just like most organisations. However, knowing the sum of their impacts implies more risk and uncertainty, or a pathway to something better would be helpful guidance.

ESG proponents should step back from its stridency – labelling some sectors and organisations’ pariahs while being unclear and imprecise about what constitutes good ESG.

Only weeks ago, defence stocks were shunned on the MSCI by many ESG investors. But their potential contribution to repelling Russian aggressors in Ukraine has prompted a change of heart. Unfortunately, some ESG institutions have somehow thought that democracy and state sovereignty is a magic pudding while overlooking the ESG benefits implied from military power and maintaining the integrity of national borders.

Again, geopolitical systems matter and understanding them remains too weak.

Similar oversimplifications abound. During COVID, remember the speed at which alcoholic beverage companies switched production to cover the shortfall of hand sanitiser? They did this when demand was already strong for their regular products and their decisive actions were an outstanding example of corporate citizenship in a time of need. Yet there has been little recognition given to this in the ESG universe – where alcoholic beverages are pariahs.

These issues pop up in many areas requiring analysts to understand the context and balance nuances to arrive at an informed ESG viewpoint. Perhaps analysts would be helped if ESG investing principles could evolve faster from their current state of being too vague that in turn invites arbitrary and subjective interpretations.

Carbon net-zero and endeavours for greater social justice and resilience will throw up plenty of difficult decisions reflecting painful trade-offs. Therefore, it is fundamental for ESG to enable these transitions and not inhibit them with inconsistent methodologies and poorly made judgements made out of context and without sufficient regard to system issues.

It is essential to call out that ESG generalisations and vague principles will no longer cut it. There is too high a risk of damaging organisations making genuine attempts to improve while giving camouflage to others less committed to enacting change.

Redressing the ever more ESG announcements of great intentions and substituting them with decisive strategic actions has never been more critical given the challenges.

A Way Forward

The future of ESG will boil down to the quality of leadership and strength of willpower to bring diverse peoples and organisations together to make a difference. That means the ESG universe must evolve rapidly into a place of inclusive leadership that positively compels all stakeholders to change deeply entrenched attitudes and practices. The weight of ESG money cannot do this alone.

But the immediate leadership task is to encourage much greater willingness to adopt organisational openness and transparency. Too many ESG devotees have been complacent, greenwashing, and cherry-picking data to tell a rosy story. At the same time, hiding failures and the valuable lessons from these experiences will alienate those struggling to do better and diminish trust in ESG’s purpose.

Letting the sunshine into an organisation is the first step to cleansing cultures and decision processes. Regrettably, this is not the language of business, but Mike Henry and IFM’s David Neal could change that, one business at a time.

Until sunlight shines into all institutions, doubt and cynicism of ESG will linger.

END

*Garry Bowditch is Co-Founder Customer Stewardship Alliance and author BIG FIXES: Building Bridges to an Inclusive Future, available on Amazon.

Earning Public Trust: Lessons of a Sled Dog Musher

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Photo by Robert Tjalondo on Unsplash

In Times of Uncertainty

Trust among people is precious, just like the oxygen we breathe. Our future depends on it. Some people may take trust for granted and even abuse it, but we all learn the full extent of the loss and the enormous difficulties in bringing it back when it’s gone.

In my book BIG FIXES: Building Bridges to an Inclusive Future, I use infrastructure (the provision of public assets and services like hospitals, roads, bridges and water systems) as a prop to open up a conversation about the future. I argue everything relies on ‘earning trust’ and keeping society hinged to it.

But the problem is trust is disappearing as a force for good, and we need to fix it fast. That is where sled dogs and their musher come into the picture. Because I think they can inspire us and build a deeper understanding of what trust means, especially in times of great uncertainty like COVID. Here is an excerpt from Chapter 1 of BIG FIXES.

A Musher’s Masterclass

Blair Braverman* is now a famous author and ‘musher’, a human driver of a sled dog team that races across the Arctic. She says that her dogs know many things she does not. For example, they know if a storm is coming or if a moose crossed the trail days before. Every time the dogs hit the trail, they run hard, giving it everything they’ve got without knowing if the race is 10 miles or 100 miles.

Braverman has learned the importance in long races the need to front-load rest. You’re four hours into a four-day race, and the dogs are charging down the trail, leaning into their momentum, barely getting started — and then, despite their enthusiasm, it’s time to stop. The dogs might not even sit down; they’re howling, antsy to keep going. It doesn’t matter. You rest. Four hours later, you rest again because it’s far easier to prevent fatigue in the dogs than it is to recover from it later.

Resting early, anticipating your dogs’ needs, does something even more important than that, says Braverman: it builds trust. For example, a sled dog learns that by the time she’s hungry, her musher has already prepared a meal; by the time she’s tired, she has a warm bed. If she’s cold, you have a coat or blanket for her; if she’s thirsty, you have water. And it’s this security, this trust, that lets her pour herself into the journey, give the trail everything she has without worrying about what comes next. But if she knows you’ve got her back, she’ll run because she wants to, because she burns too, and she’ll bring you along for the ride.

Infrastructure Mushers Needed

We, too, need to know that our institutions have got our back in the human world. We run our unique races in life, focussed and energised to achieve what we choose. We expect the people charged with keeping our towns, cities, and the nation we live and work in – safe and productive – that they are doing their job!

While the rest of us are investing, running businesses, getting educated and growing families and communities, we can do this without worrying about the detail of keeping essential systems going. Transport, energy, water and waste, schools and hospitals (the infrastructure) needs to work. Like there is the equivalent of a sled dog musher taking care of things so you and I can get on with living, contributing to society and making a decent living for our efforts.

The infrastructure musher (if you like) must have our back when loved ones fall ill there are hospitals and medical attention at the ready. When a business learns, it must pivot to a new product or service; managers are confident they can access new pools of talented workers thanks to excellent land use planning ensuring vibrant neighbourhoods and educational facilities. If a start-up is hungry for more data, it has broadband connectivity to manage mega data transfer upstream and downstream around the globe. As environmental accountabilities grow, organisations know they can access sustainable energy low carbon transport services and provide education and childcare services to support social inclusion and diverse teams. All these are vital ingredients to success beyond most organisations’ front gate.

Custodians of Trust

There is an enormous trust that those responsible for public services, especially infrastructure planners, owners and operators, are doing their job well. Policymakers and regulators are looking ahead, listening to people and businesses, understanding what is essential to success and having the conviction to ensure economic and social opportunities prosper and not peter out from fatigue and frustration.

The better authorities do these services, the better the rest of us can be innovative, productive, and responsible in contributing to our wellbeing and a better society.

When that happens, not only do we live better, we build trust!

EndNote

* Blair Braverman, Welcome to the Goddam Ice Cube. Chasing Fear and Finding Home in the Great North. March 2017

Transparency First, the key to a better Infrastructure Australia

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A version of this article was published on 6 December, 2021 in the Australian Financial Review

The underperformance of infrastructure has grown as a serious societal problem. High levels of opaqueness, lack of accountability and monopoly power are to blame.

Regrettably, jingoistic nation-building slogans have overtaken infrastructure. It has skewed government to prefer megaprojects, with a casual indifference to our neighbourhoods’ decaying amenity, safety and quality of life.

Infrastructure investing is prone to misjudgements, pork barrelling, and corruption because of a lack of transparency, leading to the misallocation of capital. The role of customers, an absence of competition, political accountability for grand promises and under delivery are all at a low ebb compared to most other areas of the economy. This dysfunction must not be allowed to persist, and it can be fixed.

This context provides Infrastructure Australia (IA) with an opportunity to set itself apart as a champion of transparency, bringing conviction and courage to the fore to shape today’s infrastructure decisions to be the best they can be. When that is a reality, the rest of us can be more optimistic our infrastructure is doing its job – positively transforming lives and livelihoods.

Keeping errant governments inline

In mapping a more purposeful future for  Infrastructure Australia, we must first accept that depoliticising infrastructure is neither desirable nor appropriate. Infrastructure rightly sits at the heart of democratic processes, yet both political parties rhetorically seek to outsource it. The real issue is that transparency is missing, knowing the opportunity costs of infrastructure decisions, and shining a light of accountability to whether projects ever deliver on their promises.

Many governments worldwide, including Australia, want to give the impression of overhauling project selection and prioritisation processes by establishing independent agencies like  Infrastructure Australia. But this has struggled to work because too many appointees bring well established political affiliations and a mindset of treading carefully, not wanting to challenge or upset political masters who appointed them.

Next April,  Infrastructure Australia will be 14 years old. It has matured as an organisation, and its reports, processes and personnel all point to an organisation committed to professionalism and due process. But this is not enough.

A Federal election in 2022, means grand promises of high-speed rail, fantastic transport, water and energy solutions for cities and regions and transforming Northern Australia – will be replete with vision, hope and little guarantee of effectiveness. Australia needs an IA with the courage and conviction to pull errant governments into line.

 Infrastructure Australia insistence for business case preparation to assess and prioritise projects may be reassuring – experts carefully measure and check, in much the same way pilots do pre-flight checks of all systems before take-off.

The problem with the  Infrastructure Australia flight deck is that it flies by assumption. Nobody at  Infrastructure Australia is checking that the instruments are accurate. IA should be more forthright with the government that its costs and benefits in business cases are just estimates, often untethered from hard empirical evidence they can be achieved in the future. Moreover, there is a lack of commitment to systematically follow up on projects to confirm and validate actual costs and benefits. Instead,  Infrastructure Australia substitutes hope over hard evidence that benefit-cost ratios will be accurate, and that discount rates impacting these calculations were appropriate.  The result is a lack of empirical feedback on project performance that reinforces existing biases and inefficient project selection practices. These practices speak to a tick the box mentality without objective evidence that positive legacies from projects can pass to current and future generations.

Other government departments like Federal Treasury have their budget and economic estimates heavily scrutinised against actual outcomes. It is a sobering process, but it provides accountability to do better, seeking out improvements when wrong.

Emulate the Productivity Commission

IA should get the data and inform decision-makers and taxpayers about how projects performed in the years and decades after completion.  Infrastructure Australia can make a big difference by harnessing the power of evidence, transparency and expertise. It is in the national interest to relentlessly pursue transparency and accountability on infrastructure projects, despite the protests from vested interest groups determined to keep the status quo.

Being an official independent advisor to the Federal government puts  Infrastructure Australia in a powerful position to effect change. But it requires courage and conviction to transparency, matched with intellectual integrity, quality of data and modelling to inform and disseminate information on the good, bad and ugly aspects of infrastructure policy and projects.

The Productivity Commission and its predecessors represent worthy examples for IA to emulate. The then Industry Assistance Commission’s economic analysis and the ability to communicate complex information to the public earned trust and credibility during the heady debates on tariff reduction. It successfully delivered the public evidence needed to change government policy by demonstrating the damage industry protection was inflicting on ordinary Australians. The nation needs  Infrastructure Australia to do the same for infrastructure.

It is only a matter of months before political parties roll out election wish lists inviting more budgetary black holes. IA needs to urgently build a body of evidence to support the sustainability of infrastructure spending and help Australia’s fiscal resilience. They could usefully build on the work of the Grattan Institute for this purpose.

Watch out for nation-building promises

IA should be more prudent in supporting megaprojects – the multi-billion-dollar undertakings that deliver significant announcement effects for politicians and a sea of problems that follow. Bent Flyvbjerg from Oxford University coined the iron law of megaprojects: ‘over budget, over time, over and over again’.

For example, the surge in regional population growth post-COVID will no doubt birth another round of high-speed rail dreaming. This will need a firm hand from IA to protect the interests of regional Australia by prioritising the fundamentals – proper hospitals, schools, sports, and recreation facilities to name just a few. All these infrastructure essentials will be less likely if resources are sucked up by unworthy projects in the name of ‘nation building’.

At the same time, super regions around capital cities lack transport connectivity. Renovating the rail system between Sydney to Newcastle, Melbourne to Geelong, Brisbane to the Gold Coast would deliver more widespread benefits sooner than very fast trains between capital cities. There is a need for a more balanced and responsible national conversation about options and  Infrastructure Australia must set guard rails to keep proponents honest.

In the case of WestConnex – a partially completed megaproject toll road in Sydney – was backed by IA with business cases and cost-benefit analyses.  Better mobility and urban renewal were two prongs of its value proposition. While there was an enormous conviction to getting the WestConnex infrastructure built, the follow-through to urban regeneration has been disappointing, despite  Infrastructure Australia acknowledging its merits.

There is no doubt  Infrastructure Australia could have used its powers of influence to secure a better deal for housing and social aspects of WestConnex compared with the sheer institutional determination to build the road alone. IA could add much more value to the way projects impact the community if it pushed back harder on industry biases favouring investors and motorists over communities. A balanced approach would leave more room for other stakeholders to benefit, like residents and home buyers in need of affordable housing. Community trust in infrastructure pivots on the benefits being enjoyed more inclusively.

BIG FIXES supports a more effective  Infrastructure Australia

There is an enormous community trust bestowed on those responsible for infrastructure to do their jobs well. But the better organisations like  Infrastructure Australia can do their job, from planning, design, construction, and operations the more room there is for others to innovate, be productive, and ensure well-being and contribute to a better society.

It is appropriate to scrutinise, critique and debate  Infrastructure Australia as a lot is riding on them to do the heavy lifting in sharpening the nation’s capability to select and deliver excellent infrastructure. Anything less will fail the Australian people, undermine trust, and diminish the quality of life of our children.

Building solid relationships, honing skills of giving back to customers and communities and recognising the primacy of stakeholders over shareholders all form part of the solution. My recently launched new book BIG FIXES: Building bridges to an Inclusive Future sets out a tried and tested framework and practice of Customer Stewardship for owners and operators of infrastructure to lift performance and accountability.

It was written from a global perspective to help those responsible for infrastructure to understand what we do well and remind all stakeholders there is still enormous room for improvement. BIG FIXES makes the case for organisations like IA to strive for more transparency, impact and create positive legacies.

In reviewing the book, Professor Ian Harper encourages us to think of infrastructure as a gift that current generations pay forward to future generations. “When we invest in infrastructure, we express hope for the future. But we also create the future since good infrastructure empowers human’s ingenuity and creativeness that literally fashion the future.”

No one pretends that  Infrastructure Australia‘s job is easy. However, the difficulties faced by infrastructure policymakers could be more easily overcome by having an honest and accountable commitment to transparency first, and a relentless drive to the centricity of citizens and customers for the whole life of infrastructure. After all, what is essential is not the physical assets but the life-giving services of infrastructure, making the challenge more immediate and manageable rather than constantly building new assets.

*Garry Bowditch is the author of BIG FIXES, available now on Amazon. He is a global infrastructure expert, Co-Founder of Customer Stewardship Alliance, formerly a senior Commonwealth Treasury official and inaugural Executive Director, Infrastructure Partnerships Australia.

Infrastructure Stewardship in an era of biological threat

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This article was first published by Customer Stewardship Australia in April 2020. http://www.customerstewardship.com

Infrastructure the world over has been caught off guard by Coronavirus 19 which has highlighted the unique challenges for infrastructure assets operating in an era of biological threats.

Spatial distancing, so critical to controlling the spread of the virus, runs counter to one of the primary purposes of infrastructure – bringing people together. While digital infrastructure has been invaluable in maintaining business, education and social connectiveness during the crisis, this distance can never fully replace face to face experiences and is not conducive to long term mental health.

Infrastructure that has been designed primarily with economic efficiency in mind now needs to be recalibrated with a view to keeping our society connected and our economy operating while also stopping the transmission of biological disease.  The pursuit of efficiency (ie doing more with less) must make room for a requirement of resilience (ie being adaptive to changing circumstances to aid recovery). Improving the effectiveness of infrastructure assets and networks involves developing many nodes that are interconnected and decentralised to ensure that the failure of one node does not bring down the whole system.

The centralisation of infrastructure is evidence throughout the modern, world be that in travel with large airports and train stations, storage and distribution of potable water, major energy generation and poles and wires, shopping in large retail shopping malls and large hospital precincts for healthcare. While this centralisation has been critical for scale and cost efficiency, it can also increase security risks posed by terrorism and infectious diseases.

A decentralised approach that is more resilient to biological risk would involve a greater number of smaller interconnected assets. In the case of hospitals, it would refocus to local and mobile clinics closer to the end customer. In the case of airports, this would involve more collaborative rather than competitive relationship with regional airports with the capacity to support larger long-haul aircrafts. Whatever the sector, more nodes would allow authorities greater flexibility to close specific routes and isolate specific places without shutting down the whole system. This will imply greater cost but we must also be more conscious as to the benefits in light of COVID-19.

Infrastructure system design must seek to accommodate greater spare capacity to reduce the risk of single points of failure.  It’s been apparent just how important private transport has been for safely accessing medical help and maintaining households during this pandemic. The future implications of this does not have to mean more private vehicles although more accessible parking could assist in certain situations. Rather, it points to expanding other private options like e-scooters and e-bikes, collectively referred to as active or micro transport that could be called on in greater numbers when outbreaks occur and the need for social distancing arises again.

Just as excess capacity is needed in transport networks, the same in true for potable water. Even though COVID 19 has not been detected in potable water the risk of water transmission remain a possibility for future diseases. Systems to support more than one way to store and distribute water should be developed to pre-empt possible future biological risk where water is a viable means of transmission.

Rapid urbanisation and environmental practices such as cutting down forests increase the risks that previously harmless microbes will from time to time spill over into human bodies and cause devastating outbreaks. While this provides further reason to protect the environment, it also requires us to fundamentally change our approach to infrastructure development.

The challenges posed in making infrastructure networks more resilient to biological threats are not going to be addressed through private actors operating alone or governments mandating it.  A high degree of collaboration is called for from infrastructure operators working with their peers and overseas counterparts to ensure that private capital and public policy imperatives can continue to adapt and co-exist in a post COVID-19 world.

Australia’s COVID19 wake up call: get smarter about population density

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Australia’s COVID19 wake up call: get smarter about population density 

This article authored by Garry Bowditch first appeared in Australian Financial Review on 16 April, 2020

When the war against COVID19 is finished Australia will have depleted its fiscal reserves and be saddled with high indebtedness for at least a decade. Getting the economy back to full health and keeping it that way is key, not only to pay-off national debts, meet the burgeoning costs of a growing and ageing population and to replenish fiscal reserves for the next crisis. 

This is a lot to expect from a small open trading economy subject to so many risks. One prudent measure policymakers must adopt to aid recovery is to strengthen early detection systems and response capabilities to address biological risks like COVID19. 

Pandemics thrive on confusion and indecision. The faster a city, state or nation can learn how to spot the early signs of contagion and take precise decisions to zero in and kill it means more lives saved, less disruption and smaller fiscal rescue packages.

Early intervention should not be an aspirational vision inspired by science fiction, it is urgent and doable. Australia is rapidly becoming more vulnerable to biological risks, because population density is rising very fast. In very near future, social distancing for any prolonged period will be much harder to rely upon to fight pandemics as more Australians take up medium to high rise housing. Less private open space inside and out will stretch community goodwill as it comes to grips with living much closer together while making it easier for pathogens to infect entire communities faster.

It might make sense when times are good for government to require new projects like transport, water and waste and social infrastructure to build up population density to justify costs and deliver more financial benefits from scarce land. But during periods of extreme biological risks the same infrastructure morphs into superhighways for pathogens to spread with alarming efficiency. 

Australia must learn from others if its ambition for greater density is to be responsible and safe. Taiwan is a nation with high population density coupled with significant geopolitical vulnerability. As a matter of necessity, they have a culture of adaptiveness, being technology savvy and most of all collaborative in sharing information across government. In the case of COVID19 this has been key in Taiwan’s effectiveness in getting timely information from immigration, customs, transport and the health sector to pinpoint high risk people and neighbourhoods to quarantine sooner therefore helping avoid costly national shutdowns later.

It also means investing in latent capacity for infrastructure networks to isolate one part, while scaling up another is fundamental to managing continuity of services and acting responsibly to contain people impacted by a serious event. Coordination and collaboration are key, firstly within functional silos such as transport, so there is greater coherence to land use, urban density and transport service offerings to ensure people can remain mobile and safe. Access to online video medical consultations is an excellent example of tapping latent capacity from NBN, health clinic online systems and regulatory tolerance to permit this vital service being more accessible and safer.

It is imperative that infrastructure network owners and operators are incentivised to keep government and each other informed about such threats and cooperate to ensure safety and continuity of services, bound by an objective to quarantine what is unsafe and keep the rest working normally. Densely populated cities like Singapore, Seoul and Taipei have been effective in containing COVID19 because of good alignment of objectives across agencies and a culture to make strong decisions early. 

COVID19 has revealed Australia must fix these key capability gaps concerning the way biological risk impacts humans. The nation is seriously lagging in this area and has not matched successful efforts to implement anti-terrorist measures to protect critical infrastructure and biosecurity in respect of agriculture. 

Australia’s optimism bias towards the benefits of more population density has contributed to blind spots to long term risks. Without investment into vital data, knowledge and monitoring systems to detect abnormalities there is reduced ability for early detection and intervention. Key to this is understanding and predicting how patterns of living in cities and regionals areas change over time and using scenario planning tools to examine long-term consequences.

The practical reality of early intervention means getting information and actionable intelligence about who is sick, how they got that way and what to do about it. While the sciences will do the heavy lifting in finding solutions, it will be helped enormously by a culture of collaboration and trust, so information is shared across bureaucratic and business silos. Cracking this will underpin more skilful and timely interventions, like knowing what and where to shut down specific neighbourhoods, protecting buildings that house the vulnerable while at same time helping preserve the functioning of the rest of the community. 

Australia is an ideal place to do this preparation despite its clumsy federated system. Cities are small to medium sized by global standards and has relatively new infrastructure, combined with deep pools of social media and data from sensors and Internet of Things to track emergent trends. Additionally, there is high quality demographic and spatial data to trace critical interdependencies and their impact on people and businesses. 

Life after COVID19 will be better provided we can learn and adapt from this harrowing experience.  Population density, infrastructure design and management and early intervention skills and capabilities to contain biological risk is an excellent starting place to ensure Australia is a better, safer and more resilient place to live and work. 

Telstra’s retreat has lessons for infrastructure*

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* A version of this article was published in the Australian Financial Review on 17 July 2018.

Telstra’s latest predicament exemplifies what is Australia’s problem of failing customer stewardship in infrastructure.

Like a world cup own goal, team Telstra is scrambling to make up lost time by seeking to fix stubborn old problems. The quest to simplify Telstra in one fell swoop is a sign that long-term, steady and consistent customer stewardship of our big institutions is becoming very difficult, but not impossible.

Telstra typifies all the challenges of infrastructure. It has huge upfront investments, big focus on engineering and technology that defines its long term legacies yet these characteristics also make it hard to respond to customers and bring about change when needed – hence stewardship by customers.

The good news is that some Australian infrastructure firms are making the change in mindset and practice to get better at customer stewardship – rich in data, technology and innovation: driven by responsible people accountable for their actions.

These firms have gone beyond the basic compliance mentality of ‘ticking the box’ evident in so many annual reports where the reader can only be hopeful but not assured the right thing is being done.

Customer stewardship is an opportunity for infrastructure investors, owners, operators and policymakers to expand their toolkit of solutions for the nation’s problems from a pretty obvious starting place, the customer.

That means a determination to deliver good long-term outcomes, based on substantive relationships, where reciprocity strengthens performance and participation with stakeholders comes first.

This reflects a realisation among CEOs that not all our economic and social challenges can be addressed through reducing costs, lifting prices or through more funding.

Examples of customer stewardship are not abundant, but there is a growing cohort of spirited exemplars making their mark. Like Port of Brisbane with its storm water treatment in Lockyer Valley is helping redress silt build up down stream and avoiding expensive and disruptive dredging of channels. This is benefiting a multitude of stakeholders, including its private owners.

Unfortunately the social licence to own and operate infrastructure by the private sector is drifting into troubled water and must be corrected. Already there have been calls to renationalise Telstra. While that may seem absurd, nationalisation of broadband assets is exactly what has happened with NBN and UK is in the midst of maelstrom on similar issues.

A lack of connectedness of decision makers in Telstra to the anguish customers often face in dealing with their service provider has persisted across the decade.

While transparency is usually an enabler of managerial accountability to long-term outcomes, in the case of Telstra the sheer complexity and effort to understand the labyrinth by managers inside and outside has aided and abetted half hearted remedies to customer service and corporate misadventure.

Telstra appears to have finally self-medicated with a new business model splitting off its legacy physical assets into InfraCo. This reflects what customers have understood for a long time, that Telstra has reached a tipping point where benefits of size and scope of operations no longer justify the cost of underperformance.

Institutional investors can help buttress an enduring customer led, market based stewardship for infrastructure. That is where responsible owners are active in managing their assets to the shifting needs of customers, and are front footed in reimaging infrastructure to adapt and perform to higher standards of service and innovation over the long term.

While many investors are attracted to the infrastructure asset class because it is typically a safe haven from volatility and with inflation adjusted returns, it is important that they closely engage customers and community to ensure services are timely, scaled and feasible.

A plethora of challenges confront investors, owners and operators of infrastructure. On the one hand, pressure to payout dividends especially to retired security holders dependant on their investment to meet living costs has never been more acute, and on the other immense pressure to reinvest in assets and networks in response to climate, technology and social change. Public trust is delicately balanced as to how investors navigate these challenges.

Australia needs a stronger ambition to an infrastructure future where customers, asset owners and operators exchange information, understand needs and preferences and are motivated to meet them in a way that lifts the entire system. This simple process of stewardship underpinned by respect and humility to the customer and the community from which they come has been lost, as infrastructure gets bigger and more complex.

Customer stewardship is a means to a very important end, rebuilding trust. Integrity demonstrated through consistent behaviour towards the customer (and community) will be a big step forward. Too often communication with customers is not targeted, timely, clear or helpful and dressed with over-promise served on a platter of poor delivery.

Telstra along with the whole infrastructure sector must commit to being a beacon for exemplary customer stewardship. Its time to bring the customer and community in from the cold, and when they do not only will shareholders and customers be better off, so will Australia.

Private Capital Missing in Action*

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* As appeared in Australian Financial Review, 14 May 2018 authored by Garry Bowditch

Turnbull’s 2018 Budget is accelerating the shift to ‘equity’ as its preferred spending weapon in its war on infrastructure inadequacy. Securing a commercial rate of return on investments like Melbourne’s Rail Link, Snowy 2.0 enables government to spend up big without exacerbating budget deficits. But this magic pudding of political ambition and public accounting rules has its limits.

Lessons about big infrastructure projects like NBN are commonplace, aggressive spending followed by weak outcomes. Prospects of commerciality and off budget financing delivering good long-term outcomes do seem fanciful. Bad service, irrelevant products and gold plating are just a few of the modern trip-wires that can cause projects to be uncommercial causing debt and deficit blow ups for future budgets.

Being a monopoly was once a fail-safe inoculation against unhappy customers and competition. New technologies like 5G mobile telephony, batteries for energy storage and autonomous vehicles are creating alternatives to legacy infrastructure. They all point to a future where customers are no longer hostages to poor government decisions because they have other options.

The likelihood of stranded assets in infrastructure is much higher than ever before, so taxpayers need to be vigilant that off budget financing of infrastructure projects is prudent. Transparency is key along with ensuring these projects tap the enterprise and dynamism of private capital to do more heavy lifting in resolving the nations infrastructure challenges.

Too many projects in the Budget are all funded and orchestrated by government which sits oddly with the fact that superannuation funds have significant capacity to invest in infrastructure here and abroad.

This situation demands urgent redress so that the many sources of private capital can be put to work as equity and debt partners. Private capital should be given more of a chance to invest in areas that can earn commercial returns rather than blindly relying on taxpayers to fund infrastructure. Substituting private for public capital will free up government funds for budget repair and targeting community and social infrastructure in areas where commercial outcomes are less likely, but with high impact on liveability.

What is missing in Australia is a much richer and more authentic collaboration model for infrastructure where risk, innovation and customer outcomes are rewarded without the need for big capital spending. OFWAT, the UK utilities regulator no longer rules on capex and opex in respect of water, but leaves it up to the utility and customer to find the right mix. Gold plating is now a relic of history. In its place is a mindset to use capital effectively in the interest of customer and community outcomes.

Australia has lost its edge with world infrastructure leaders. To get back on track the nation needs to incentivise and reward more innovation solutions that are less capital intensive and deliver sooner big customer and community outcomes.

To do that, governments must step back from pulling the big dollar spending trigger and focus on governance reform enabling dynamic and innovative leadership of private capital and community sectors.

For example, there is no doubt the $400m Port Botany rail duplication project is critical but why does the taxpayer have to fund this? The problem is not the private operators, but the willingness of government to step in when other private capital options are possible with the right regulatory settings.

Major airports and now maritime ports that are mostly privately owned or leased along east coast need to increasingly look beyond their front gate and take responsibility and stewardship for the connectedness of their business to the broader economy. No doubt this is hard, especially with urban encroachment, a lack of long term planning make 24-hour operations difficult. But this is exactly the sort of innovation and enterprise challenge private owners and operators should embrace, and be rewarded when they succeed.

The scope for improvement in infrastructure governance is enormous. Creation last year of the Infrastructure and Project Financing Agency is a step in the right direction provided it is an instrument for collaborating with the many sources of private capital available for infrastructure. Equity financing by government can be legitimate provided there is plenty of room for private capital to play a big role in being accountable to customers to flex and adjust over the entire economic life of infrastructure.

Australia is much more likely to get back on the best practice frontier when it heeds the lessons of past reforms. Infrastructure businesses have proven to be far superior to that of projects. Fiduciary boards, light handed regulation and active private investors operating transparently and in concert with customers is what will make every dollar and every talent count towards securing prosperity and well being for all.