We are drowning in a sea of information. But knowledge can be hard won and wisdom sometimes seems almost impossible to implement. Many would experience this in the infrastructure sector. So for those that follow me on LinkedIn, I thought a series of infrastructure haikus might be a novel way to look at some of the issues.
Early vision cast, Needs and dreams on paper sketched, Blueprints in the mist.
Funding battles fought, Public voice and budgets weigh, Choice in numbers set.
Designs come to life, Engineers and planners meet, Maps turn into roads.
Shovels break the ground, Concrete, steel take form and rise, Promise now concrete.
End of useful life, Time to reassess the need, Planning is reborn.
Each haiku focuses on a specific phase of infrastructure planning, from initial conception to design, construction, operation, maintenance, and eventually reconsideration for future needs. Collectively, they aim to encapsulate the cyclical, ongoing nature of infrastructure planning and its multifaceted aspects.
Lytton Advisory recently visited Albury-Wodonga, and we have been thinking about some of the challenges of multi-level, multi-jurisdictional infrastructure planning.
Infrastructure Planning in Albury-Wodonga: Navigating Complexities and Embracing Opportunities
Albury-Wodonga, the iconic twin city on the Murray River border of New South Wales (NSW) and Victoria, exemplifies the complexities of infrastructure planning in border regions. As with other border areas, these cities grapple with intricate intergovernmental relations, but their unique geographical and administrative contexts add layers to the decision-making process. Both municipalities recognise this in their joint ‘Two Cities, One Community Approach’.
Key Challenges in Infrastructure Planning
Harmonization of Standards and Regulations: Collaboration is a hallmark of infrastructure projects in this region. Yet, each state brings its unique set of standards, regulations, and bureaucratic processes. Reconciling these differences becomes pivotal. Without a synergistic approach, the twin cities could witness infrastructural discrepancies, leading to inefficiencies and possibly, public discontent.
Interstate Transportation: Albury-Wodonga is not just two cities in proximity; it’s a transportation nexus. Roads, railways, and air links intertwine the destinies of these cities. The imperative is clear: both states must harmonize their efforts. Inconsistencies in funding allocation or project emphasis can stymie fluid connectivity, impeding the economic and social rhythm of the region.
Resource Sharing and Management: Nature doesn’t recognize man-made boundaries. The Murray River, a lifeline for both cities, exemplifies shared natural resources. Consequently, infrastructure like water treatment plants or riverfront recreational areas require scrupulous planning. Both equitable access and the long-term ecological sustainability of these shared resources are at stake.
Economic Development Consistency: Albury-Wodonga, in many ways, dreams of functioning as a cohesive economic hub. Yet, state-driven economic policies, if not aligned, can tilt the balance. For instance, preferential investment in one city’s industrial infrastructure could unintentionally dwarf the other’s economic aspirations.
Community Engagement and Perception: Beyond bricks, mortar, and policy, lies the realm of human sentiment. Residents might oscillate between their state affiliations and a broader twin city identity. Their expectations, molded by these affiliations, play a pivotal role. Striking a balance in infrastructural development that resonates with these sentiments becomes paramount.
The Population-based Infrastructure Planning Dilemma
A proposition of tailoring infrastructure based on relative populations adds a layer of intrigue to the planning discourse.
Pros:
At its core, population-based infrastructure seems egalitarian. Larger populations, logically, have augmented infrastructure needs. Meeting these proportionally ensures fairness.
Such an approach can be agile, adapting to demographic dynamism and ever-evolving urban needs.
Resource allocation rooted in population metrics could streamline funds, optimizing utility and curtailing wastage.
Cons:
A myopic focus on numbers could eclipse nuanced needs. A smaller populace might harbor intense infrastructural demands due to myriad external factors.
Over-emphasis on population-driven infrastructure could perpetuate developmental imbalances. One city, experiencing organic growth, might inadvertently overshadow its twin.
Fragmentation is a lurking danger. The very essence of Albury-Wodonga lies in its intertwined identity. A skewed focus might fracture this cohesion.
Looking to the Future
As we gaze forward, it becomes abundantly clear that Albury-Wodonga’s tale is not merely about connecting two cities with roads and bridges. It’s an intricate dance of administrative alignment, resource optimization, and human aspirations. While the significance of population in infrastructural decision-making remains undeniable, it should meld with other considerations. The ambition should be holistic development, ensuring that both cities, while retaining their unique identities, march forward hand in hand, into a future replete with promise.
Harnessing collaborative synergies, championing sustainability, and placing residents at the heart of planning can ensure that Albury-Wodonga evolves from being two cities on a map to a pulsating, integrated urban entity.
Doing infrastructure planning in a tri-level, multi jurisdictional context has its challenges. Keen to hear about your experiences.
Managing a local council’s budget is no simple task. From infrastructure to public services, CFOs are faced with the challenge of funding projects that are essential to the prosperity of their communities. Two potential sources of funding have been generating quite a buzz in council meetings across the country: grants and Public-Private Partnerships (PPPs). In this article, we unpack the advantages and limitations of these two funding avenues.
Grants: A Gift That Gives Back
Grants are like the presents that keep on giving, primarily because they don’t need to be paid back. This feature makes them a cost-effective source of financing for many local councils. Moreover, the focus of grants often aligns perfectly with the mission of local councils: benefiting the community.
Another upside is that grants often come with a degree of spending flexibility, depending on their source and nature. However, a word of caution: it’s not all smooth sailing in the world of grant funding.
Applying for grants can feel like being in a fiercely competitive race. It requires a significant investment of time and resources to prepare a compelling application – with no guarantee of crossing the finish line first. Another pitfall lies in the scope of funding. For larger, more ambitious projects, grants might fall short. The funding pool is also subject to availability and can fluctuate from year to year. Lastly, grants can come with strings attached, limiting how councils can use the funds.
Public-Private Partnerships: Sharing the Load
If you’re looking to bring big projects to life, PPPs could be the answer. They’re an effective way to facilitate large-scale projects that might be beyond the reach of a council’s independent financing. An appealing aspect of PPPs is risk-sharing. By involving the private sector, both entities share the project risks, mitigating the council’s financial exposure.
Another potential advantage is efficiency. The private sector often boasts specialized skills, innovative technology, and advanced management techniques that can help deliver projects more effectively.
But PPPs aren’t without their challenges. They often entail complex and lengthy negotiations, requiring clear agreements on roles, responsibilities, and rewards. It’s also important to remember that private entities are profit-driven, which could result in prioritizing profitability over community benefits. Lastly, the long-term nature of PPP contracts could tie the council’s hands, reducing flexibility to adapt to changing community needs.
Making the Choice
Both grants and PPPs have their unique strengths and challenges. The choice between them hinges on a council’s specific circumstances and needs. Remember, these aren’t the only funding options out there. Other strategies such as municipal bonds, levies, or direct budget allocations are also worth exploring.
In the ever-changing landscape of local government finance, it’s more crucial than ever for CFOs to stay informed about the various funding mechanisms available. Balancing community needs with financial sustainability is the art of local council financing.
Recently Lytton Advisory is seeing Artificial Intelligence (AI) being applied across a wide range of sectors of economies. Currently we are engaged in national infrastructure investment planning in Samoa and Vanuatu. This prompted us to think about some of the issues around using AI in national infrastructure investment planning. It is a promising approach that can enhance efficiency, precision, and foresight. However, implementing this technology, especially in Pacific Island nations, is not without challenges. Three big challenges we see are:
Limited Access to Quality Data: AI thrives on large, diverse, and high-quality datasets. For AI to be effective in infrastructure planning, it needs access to data on the current state of the infrastructure, usage patterns, environmental factors, and the like. However, in many Pacific Island nations, data collection and management practices may be underdeveloped due to resource limitations, which results in poor quality or incomplete datasets. These nations may lack the digital infrastructure, like advanced sensor networks, to gather sufficient real-time data for AI to work effectively. The issue of data privacy and protection also comes into play, given the sensitive nature of certain infrastructure-related data.
Technological Capacity and Expertise: The implementation of AI requires technical expertise and strong digital infrastructure. In many Pacific Island nations, these capacities may be lacking due to constraints in resources, education, and infrastructure. Training locals to use and manage AI systems could be difficult, and attracting or retaining AI talent may also be a challenge due to economic factors and brain drain. There’s also the task of integrating AI with existing systems, which could be outdated or incompatible.
Environmental Vulnerability: Pacific Island nations are among the most vulnerable to climate change. Frequent natural disasters like cyclones, flooding, and sea-level rise create an unpredictable environment for infrastructure planning. While AI could potentially help manage and adapt to these issues, the volatile environment also makes data collection and analysis more challenging. Infrastructure and equipment needed for AI, such as data centers and sensor networks, could also be damaged by environmental events.
To overcome these challenges, it’s essential to adopt a strategic approach that includes improving data management practices, investing in education and digital infrastructure, promoting technological capacity building, and implementing robust measures to mitigate environmental risks.
Trying to do this at a national level may be limiting, especially for some of the very small nations of the Pacific. Developing AI on a regional Pacific basis, rather than a series of national ones, might bring some of the following benefits:
Shared Resources: AI development requires substantial resources, including technology, data, and skilled professionals. By pooling resources at a regional level, Pacific Island nations can collectively create more robust AI systems than they might individually. They can share the costs of necessary infrastructure, the development of AI applications, and the hiring or training of experts.
Standardization and Interoperability: A regional approach can foster standardization of data formats, protocols, and AI technologies. This makes systems more interoperable across countries, which can facilitate cross-border initiatives and collaborations. This is particularly useful for the Pacific Island nations given their geographical proximity and shared regional challenges.
Shared Data: AI relies heavily on data for training and functioning. By pooling data at a regional level, nations can create larger and more diverse datasets, which can help improve the accuracy and reliability of AI systems. This can also compensate for the smaller population sizes and hence smaller national datasets of these nations.
Regional Adaptation: Given that Pacific Island nations face similar environmental challenges, such as climate change and natural disasters, a regional AI system can be designed to specifically tackle these issues. AI models could be trained to predict and respond to regional weather patterns, sea-level rises, and natural disasters, aiding in preparedness and mitigation strategies.
Collective Bargaining: A region acting as a unified entity has a stronger position when negotiating with global tech companies or other international entities. This can lead to more favorable terms in data privacy, technology transfer, and intellectual property rights.
Capacity Building and Learning: A regional approach encourages collaboration and exchange of knowledge and best practices among nations. This can help build capacities in AI and related fields across the region, further fostering a regional tech ecosystem.
While a regional approach offers these advantages, it also presents its own challenges such as coordinating between different national interests and regulations, data privacy concerns, and managing shared resources equitably. Therefore, a balance between regional cooperation and national autonomy needs to be found.
International cooperation could play a vital role in providing the necessary resources and expertise, particularly in kick-starting a regional approach. It’s crucial to develop AI systems with an understanding of local contexts and needs, as well as appropriate safeguards for data privacy and security.
The unique nature of the Pacific poses several large risks in building infrastructure in Pacific Island nations. While the risks are not necessarily unique to the Pacific, the potential combination of these factors can increase the overall risk profile of building infrastructure in the Pacific and might require stronger risk responses. The following six factors are worth considering.
Natural disasters: Pacific Island nations are prone to earthquakes, cyclones, and other natural disasters, which can damage or destroy infrastructure projects.
Political instability: Political instability in Pacific Island nations can lead to changes in government policies, which can affect the financing and completion of infrastructure projects.
Limited financial resources: Many Pacific Island nations have limited financial resources, which can make it difficult to fund infrastructure projects.
Limited skilled labor: Many Pacific Island nations have a limited pool of skilled labor, which can make it difficult to find workers to complete infrastructure projects.
Environmental concerns: Building infrastructure in Pacific Island nations often requires the use of natural resources and the modification of the landscape, which can raise environmental concerns.
Cultural sensitivity: Building infrastructure in Pacific Island nations requires sensitivity to the cultural traditions and values of the local communities, which can present challenges.
A risk approach that does not consider these elements is inherently risky. How do you handle this kind of risk in your organisation?
As Queensland’s local governments strive to ensure sustainability in waste management, innovative techniques like A-B Testing are increasingly gaining traction. This method, commonly used in marketing to test consumer preferences, can also be applied to household waste behaviour. It involves comparing two groups – one following the current waste management practice (A) and the other testing a new approach (B).
Recently I have been thinking about three ways this might be done in a local government context:
Study 1: Recycling Education Programs. Educational programs about the importance and methods of recycling are key to promoting responsible waste management. A-B Testing can be used to measure their effectiveness. Group A could continue with the current education approach, while Group B would receive enhanced education material – perhaps more engaging, interactive content. The success could be measured in terms of recycling rates, contamination rates, and waste volume reduction.
Study 2: Waste Collection Frequency. Changing the frequency of waste collection is another variable local governments could experiment with. Group A could maintain the current schedule, while Group B could have more frequent recycling pickups and less frequent general waste pickups. This encourages households to recycle more and could result in substantial landfill reduction.
Study 3: Pay-As-You-Throw (PAYT) Policies. Finally, implementing PAYT policies could be a game-changer. Under this scheme, households are charged based on the amount of waste they produce. Group A could continue with the flat fee structure, while Group B would test the PAYT policy. The impact would be measured through waste volume, disposal costs, and recycling rates.
A-B Testing in these areas could provide local governments with robust data on the effectiveness of new waste management strategies. It’s an evidence-based approach that can drive better policy-making and offer several potential gains. There are many more options for this kind of analysis.
But what are the benefits?
For the councils, the benefits include better resource allocation, improved recycling rates, and reduced costs associated with waste management. It can also drive innovation in service delivery and contribute to sustainability goals.
Ratepayers also stand to gain significantly. Efficient waste management systems can lead to lower rates over time. Moreover, they provide an opportunity for households to play an active role in waste reduction and recycling, contributing to the larger goal of environmental sustainability.
A-B Testing allows us to bring data to the heart of decision-making, fostering an innovative, evidence-based approach to household waste management. Queensland local governments, by embracing such methodologies, can set an example in driving sustainability through informed, data-driven decisions.
Lytton Advisory is pleased to announce that Managing Director Craig Lawrence has been appointed to a Panel of Economic Experts for Australia’s Solomon Island Resource Facility (ASRIF).
ASIRF supports the Department of Foreign Affairs and Trade in meeting the objectives of Australia’s aid program in the Solomon Islands.
Craig previously advised the Ministry of Infrastructure Development there on how to incorporate economic tools to assess climate change adaptation strategies into the transport invesment guidelines.
This year marks the tenth anniversary of Lytton Advisory’s engagement with Pacific Island nations on a range of economic and infrastructure issues.
Decision-makers do not get it right all the time. Understanding potential avenues of failure provides a good basis for being able to identify risks associated with failure and develop strategies to avoid them. Avoidable errors always seem more egregious than unforced ones. Infrastructure planning can often fail due to a variety of reasons.
Lack of long-term vision: Infrastructure projects often have long lifespans, and it is important to have a clear vision of the future needs of the community in order to plan effectively. If the infrastructure is not designed to meet the needs of the community in the long term, it may become outdated or inadequate.
Insufficient funding: Infrastructure projects can be expensive, and if there is not sufficient funding available to complete the project, it may not be feasible to proceed. This can be especially challenging when infrastructure projects are designed to serve a large, diverse community with a variety of needs.
Political considerations: Infrastructure projects can be influenced by political considerations, such as the interests of local politicians or the preferences of specific groups within the community. This can lead to projects being implemented that do not fully consider the needs of the community as a whole.
Poor coordination: Infrastructure projects often involve multiple stakeholders, including government agencies, private companies, and community organizations. If these stakeholders are not effectively coordinated, it can lead to delays, cost overruns, and other problems.
Environmental and social impacts: Infrastructure projects can have environmental and social impacts that are not fully considered during the planning process. For example, a highway project may disrupt natural habitats or displace communities, leading to negative consequences for the environment and local residents.
Technological advancements: Infrastructure projects may be designed and built using technologies that become outdated or inferior to newer alternatives. This can lead to problems with the performance and maintenance of the infrastructure, and may require costly upgrades or replacements.
Planning frameworks that do not address these issues imperil successful delivery of infrastructure over time.
How do you manage planning risk in your organisation? I would be keen to read your views in the comments.
When Lytton Advisory was in the US last month we visited Boston. Moving around the old parts of the city, a number of infrastructure challenges were evident.
Boston’s infrastructure is aging, with many of its roads, bridges, and transit systems in need of repairs and upgrades. This can lead to increased maintenance costs and disruptions to transportation and other services, which can impact the city’s economic competitiveness.
A significant part of the old city is on reclaimed land. The city is practically the Venice of the US. It is vulnerable to the impacts of climate change, including sea level rise, which could have significant impacts on the city’s infrastructure. This can lead to flooding and damage to critical infrastructure, such as roads, bridges, and buildings, which could be costly to repair and disrupt economic activity.
Like many other cities, Boston is facing a housing affordability crisis, with high housing costs and a limited supply of affordable housing options. The city has some of the highest rents in the nation. This can make it difficult for low- and middle-income families to find suitable housing, which can limit economic opportunities for those who cannot afford to live in the city.
Boston also experiences significant traffic congestion, which can impact the city’s economic competitiveness by increasing commuting times and reducing productivity. According to the Global Traffic Scorecard, Boston drivers lost about 134 hours of their lives sitting in traffic in 2022. That’s a jump up of 56 hours from 2021 as more workers head back to the office, though still 10% less than pre-pandemic levels. This can also have negative environmental impacts, such as increased air pollution.
Finally, some locals mentioned to me that Boston is also facing challenges related to digital infrastructure, such as access to high-speed internet and other digital technologies. This can impact economic growth and innovation, as well as limit access to important services and resources for residents. Nearly 15% of households in Boston do not have a subscription to Internet service at home, and more than 32,000 households have no Internet access at all. However, I am not as sure how significant the digital divide is in Boston.
These challenges are all known and potentially solvable. Focus and resources are needed to resolve them. The city has huge potential to address these issues given its role in Massachusetts and the nation’s life, as well as its long history of development and adaptation.
In February Lytton Advisory spent a week in New York City, mainly in Manhattan. It is hard to comprehend the scale and scope of this metropolis and the infrastructure challenges that the City and its residents face. We believe there are three key infrastructure challenges that NYC faces:
Aging Infrastructure: New York City’s infrastructure is aging, with many of its bridges, tunnels, and other transportation facilities built over 50 years ago. This has led to increased maintenance costs and disruptions to transportation and other services, which can impact the city’s economic competitiveness.
Affordable Housing: New York City has one of the highest housing costs in the country, which is a major challenge for many of its residents. The lack of affordable housing options can make it difficult for low- and middle-income families to find suitable housing, which can limit economic opportunities for those who cannot afford to live in the city.
Economic Inequality: Despite being a global economic hub, New York City has one of the highest levels of income inequality in the country. This can create a variety of economic challenges, including limiting access to quality education, healthcare, and other services, as well as limiting economic mobility for those at the lower end of the income spectrum.
In a heavily built urban form solutions are never easy, but there are some possible answers:
Aging Infrastructure: To address the aging infrastructure in New York City, the city could invest in a comprehensive infrastructure renewal plan, which would prioritize repairs and upgrades to critical transportation, water, and energy systems. The plan could also include public-private partnerships to help fund infrastructure improvements and ensure they are completed in a timely and efficient manner.
Affordable Housing: To address the lack of affordable housing options in New York City, the city could invest in new housing construction and rehabilitation of existing properties. The city could also create incentives for developers to build affordable housing units, such as tax breaks or streamlined permitting processes. Additionally, the city could explore policies like inclusionary zoning, which requires a certain percentage of new developments to be affordable for low- and middle-income residents.
Economic Inequality: To address economic inequality, the city could invest in education and workforce development programs that provide training and support to residents from disadvantaged backgrounds. The city could also work to promote small business development and entrepreneurship, which can help create jobs and economic opportunities in underserved communities. Finally, the city could implement policies like minimum wage increases, paid sick leave, and other labor protections that help ensure workers are able to earn a livable wage and have access to essential benefits.
All of these require money and a critical challenge is how NYC could fund the investments needed to address its economic infrastructure needs:
Government Funding: One possible funding source is government funding, such as federal or state grants, which could be used to support infrastructure improvements or affordable housing projects. The city could also allocate funds from its own budget to support these initiatives.
Public-Private Partnerships: Another potential funding source is public-private partnerships, which could help finance infrastructure projects and affordable housing developments. Under this model, private investors or companies would provide financing in exchange for a return on their investment.
Tax Credits: The city could also offer tax credits to incentivize private investment in infrastructure and affordable housing projects. These tax credits could be structured in a way that encourages long-term investment and helps ensure that projects are completed in a timely and efficient manner.
Municipal Bonds: Another option is for the city to issue municipal bonds, which would allow it to borrow money from investors to fund infrastructure improvements or affordable housing developments. These bonds would be repaid over time, typically with interest.
Impact Investing: Impact investing is a relatively new form of investment that aims to generate social and environmental benefits in addition to financial returns. The city could explore opportunities to attract impact investors who are interested in supporting infrastructure improvements and affordable housing projects.
The matrix of need and funding needs to be carefully assessed to make sure the right incentives are generated to do the right projects with the right funding. The problems are not particularly unique, but the scale and scope of work of a key node of the global economy means the investigation is definitely worth the effort.
Lytton Advisory 