![](https://www.verdexchange.org/sites/default/files/styles/profile_scale_crop_135_190/public/field/image/IRF.png?itok=yDiwTVFM)
As featured in the VX2021 "One Infrastructure" Webinar, the International Road Federation partnered with McKinsey & Co to survey the global road sector for a comprehensive view of trends and best practices to ensure road networks best fulfill the transportation needs of the people and economies they serve. VX News excerpts A Better Road to the Future, IRF & McKinsey's study of more than 20 road-infrastructure delivery systems across the world.
Improving the global delivery of road infrastructure
Research shows that road-sector investment needs to be approximately $900 billion per year to keep pace with projected growth—currently, it falls short by $180 billion per year. Additionally, experience shows that, to significantly and sustainably improve a country’s road network, the whole delivery system must be taken into consideration. It is not enough simply to increase funding.
The International Road Federation partnered with McKinsey & Co to survey the global road sector for a comprehensive view of trends and best practices. A study of more than 20 road-infrastructure delivery systems across the world has enabled us to identify a number of root causes and potential improvements. Many road-infrastructure tenders receive too few bids and there are often significant cost variations. There is a lack of value-assurance processes and there are significant challenges to scaling innovation.
So, what can be done to improve infrastructure delivery, so that the road network best fulfills the transportation needs of each country’s economy?
The solutions are complex, and there is no single quick fix. However, we have identified five best practices that should inform every country’s improvement journey.
Maintain rigorous, fact-based, and transparent project selection
The key to improved project selection is to establish (and stick to) a rigorous, fact-based project evaluation and a transparent process for establishing what can be done and in what order. Having one entity responsible for evaluating projects and establishing a fact base enables policy makers and elected officials to properly prioritize. Ensuring an outcome-focused approach to prioritization will bring the greatest benefits to citizens and businesses. Transparency in the process and on the criteria for prioritization also helps with stakeholder management. It is equally important that the fact-based project-selection method originates in the infrastructure strategy and is linked to the overall strategic goals of the society.
Streamline delivery
The key to streamlining delivery is to boost sector cooperation across contracting, tendering, site management, and stakeholder management. The infrastructure owner decides the type of contract and how to tender the projects. For example, a decision to move away from design-bid-build contracts toward design-build contracts may pay dividends. Of course, design-build contracts are not a panacea, but their increased use can improve cooperation, align incentives, and enable stakeholders to better draw on each other’s strengths. Equally, the use of negotiations under the framework of public procurement laws can deliver benefits. Negotiations can help limit erroneous calculations, reduce overly wide discrepancies in risk estimates, and encourage improved use of alternative construction methods—however, they also increase the need for advanced tendering capabilities from infrastructure owners and suppliers.
Make the most of existing infrastructure
Governments often seek to address transportation needs by launching new projects, but the existing stock of roads will always be more important than network additions—making better use of the existing network is key. Our diagnostic shows that many countries do not focus enough on this lever. Additionally, building a fact-based maintenance strategy to reduce road lifecycle costs and ensuring that assets are not allowed to deteriorate to a point where reconstruction costs start to rise sharply enables governments to increase network reliability and reduce overall cost of ownership.
At the same time, pricing mechanisms such as congestion charges can improve road-network utilization and lead to higher economic effectiveness, while environmental effects are often positive. Furthermore, the capacity of existing assets can increase by making them more “intelligent.” This includes familiar solutions such as adjustable road signs, and adaptive traffic lights, as well as newer technology such as navigation apps with crowd-sourced traffic information. In future, connected and self-driving vehicles may increase the capacity of existing infrastructure significantly, both by cutting accidents and the reduction of “stop-and-go waves.”
Ensure effective sector governance
Our diagnostic efforts found that, across the board, three enablers need improvement for the road infrastructure sector to work better—capabilities, collaboration, and governance:
- Capabilities. Our research across thousands of infrastructure and construction projects shows that project-management skills make all the difference—no other factor correlates as strongly with the outcome of the project. Attracting, developing, and retaining talent is imperative, but also something that many governments and private-sector representatives acknowledge to be a challenge.
- Collaboration. An effective road sector requires collaboration between a broad range of stakeholders from the private sector, public sector, and citizens. Our research has consistently shown that this lacks efficiency, often because there is not a commonly shared goal for the road sector.
- Governance. Finally, cooperation across government can pose challenges. Separating technical and political responsibilities can help clarify roles and facilitate improved governance—but solutions must be tailored to the political situation in each country.
Enhance funding and finance frameworks
While funding of roads will likely continue to be predominantly sourced from government budgets, many countries would be better off if they could complement public funds with access to private money. No one solution is right for all countries, but tools ranging from toll stations, infrastructure bonds, real-estate appreciation capture, congestion charges, public-private partnerships, build-operate-transfer, and other methodologies can be part of the toolbox and considered as a way of topping up available funds.
Additional Information
Download A better road to the future: Improving the delivery of road infrastructure across the world – Full Report (14 Mb) and Executive Summary (260 KB)
Watch an interview with one of the report authors