A company of more than 45,000 employees worldwide, Los Angeles-based AECOM Technology Corporation is a worldwide leader in green building design and sustainable infrastructure development. To discuss the current hot spots for sustainable design and technology around the world, VERDEXCHANGE NEWS was pleased to speak with Jack Baylis, the U.S. Group Executive for Strategic Development at AECOM, which was acknowledged in May as the leading design firm by Engineering News-Record (ENR) magazine.
VerdeX: AECOM has been in place for 20 years. You are one of the senior people involved in the company, which is based in Los Angeles. Talk a little bit about how AECOM has evolved since we last saw you speak at the VERDEXCHANGE Conference in January. What is AECOM today?
Baylis: AECOM is an exciting story because we are a diversified professional technical services leader with experience, skill, and technical ability that serves the civil infrastructure, architectural, and planning industries. We pulled together some of the best firms and leadership into one company. Now, we have about 45,000 people around the world, over $6 billion in revenue, and, most importantly, we are working for our clients on some of the more exciting projects around the globe.
We are headquartered in Los Angeles, and founded in Los Angeles, but we have leadership and talent all over the world.
VerdeX: When our sister publication, the Metro Investment Report, last interviewed you, we talked about infrastructure and the challenges for California and metropolitan Los Angeles. What are today’s infrastructure challenges? What is AECOM’s role in advancing an agenda that responds to these challenges?
Baylis: The challenges haven’t changed. We continue, as a society, to insufficiently invest in the environment and infrastructure. Every person counts on the environment and infrastructure every day, whether that means traveling on a road, turning on tap water, enjoying the outdoors, or commuting on a subway. Globally, society hasn’t invested enough to keep up with the existing infrastructure and natural systems that serve us.
VerdeX: Both Los Angeles and the state of California in recent years have passed sizeable infrastructure bond measures for transportation, water, and ports. What progress has been made on deploying these bond funds, and how intelligently are the investments being made and leveraged?
Baylis: We have passed some good measures. One of the great ones is Measure R, due to the leadership in Los Angeles and the mayor, which will provide an estimated $30-40 billion in sales tax revenues to help build more transportation systems like the “Subway to the Sea”—a really important conduit for people on the Westside of Los Angeles to get Downtown and connect with the very good regional system being structured. Measure R provides for many other regional projects as well.
Then there is the High Speed Rail bond. The voters passed a $9 billion bond that will compliment federal money and enable a very important statewide public transportation system,. The California High Speed Rail is counting on a private-public partnership to bring financing. Private sector partners, if it’s structured properly, will bring in financing to compliment the existing state bond and federal monies to build this critical need for California. It is a true high-speed rail system, connecting San Diego, Los Angeles, San Francisco, San Jose, Sacramento, and many of the cities between them.
VerdeX: You have been deeply involved in water infrastructure. Elaborate on the projects that AECOM has been involved in planning and engineering.
Baylis: AECOM is doing water work all over the world. One of the very interesting examples is San Francisco, which recognized a need to upgrade their water supply system from the Hetch Hetchy Reservoir and Aqueduct down to the San Francisco Bay Area—not just to the city of San Francisco. The city and its stakeholders decided to invest over $4 billion to upgrade that system, including various pump stations, conveyance, and treatment systems from the Sierras and the Tuolumne River runoff to San Francisco. AECOM is serving San Francisco as the program manager and construction manager of the final phase of that upgrade. Other projects include Xi Ling in the People’s Republic of China, Aberdeen Wastewater Treatment in Scotland, the Blue Plains wastewater plant in Washington D.C., long term work with New York City, finishing up work on Deer Island in Boston, and working in Miami. We are truly global, with staff in Asia, the Americas, Europe, Africa, the Middle East, Australia, and New Zealand
VerdeX: According to ReNew Canada, AECOM has 13 of the top 100 water projects in Ontario, Canada. Expand on AECOM’s involvements in Canada.
Baylis: Canada is an exciting market for AECOM. AECOM was fortunate to merge and acquire some of the top firms and leadership in water in Canada. Rob Andrews, who runs AECOM’s global water operation, is headquartered in Toronto. He has vast experience in global water leadership. We are working on the Montreal Integrated Water Resource Management Program. Rob and his team have done a lot of the major projects in Canada—from Toronto to Calgary to Vancouver. Reading The Economist and other journals, Canada is now viewed as smart for their banking regulations and their investment in infrastructure—they continue to invest in their infrastructure and recognize how important it is.
VerdeX: AECOM has worked with the L.A. Bureau of Sanitation and the Department of Water and Power. How difficult is it to collaborate across departments and then to build such projects in a timely fashion?
Baylis: Most public agencies work in silos and focus on their mission. One of the better agencies at understanding how to work with the community and other government entities is the L.A. Department of Public Works, particularly the Bureau of Sanitation. After the city went through the issues with the consent decree and the lawsuit brought on by Heal the Bay, the Bureau of Sanitation learned how to step up and improve their systems, working with other agencies to get there. Their leadership is some of the finest, whether for stormwater, solid waste, or wastewater. The Hyperion Plant is one of the premier examples of wastewater facilities. AECOM and one of our legacy companies was involved at the start of the Hyperion Plant.
VerdeX: You are being honored by Heal the Bay this month. What is the nexus between groups like Heal the Bay and the your responsibilities at AECOM?
Baylis: Heal the Bay is one of the finest environmental groups because science is at the forefront of their mission. Agencies and the private sector can work with Heal the Bay because they have based their interest in, and drive toward, good science. That is a common platform for scientists, planners, and engineers to work across, versus emotional issues or passions. Passions are good, but when you base them on science, like Heal the Bay does, it shows leadership. Heal the Bay was very involved in Los Angeles’s Prop O and stormwater issues. They were critically involved with the Hyperion Plant. Heal the Bay is a good example of a non-profit environmental organization working with the city and county of Los Angeles and other agencies to improve water quality and treatment systems.
VerdeX: There will be a water bond on the California ballot, likely in November 2010. Address the goals of the $11 billion bond measure and the opportunities it will provide if it passes.
Baylis: California has always recognized how important water is to people, including the critical farming and commerce in the Central Valley—to wildlife, fisheries, and communities. Water is a critical part of how communities and businesses survive. Pat Brown was one of the founders of a great water system, but the conveyance system that Pat Brown founded today needs an upgrade.
They never adequately addressed the Delta issues. The water that comes through the Sacramento Delta is conveyed through organic peat soils, which has naturally occurring trihalo methane potential. That’s a fancy way to talk about a pollutant potential triggered by clorination. We had to look at better treatment, like UV and other technologies to deal with that. However, several better solutions, such as finding ways to bypass the Delta while still maintaining the ecosystem there, are being addressed. There is a significant cost to provide community water supply, maintain an ecosystem, and still provide water to our farmers. The whole system needs an upgrade. That is the crux of the recent bond measure.
VerdeX: At the last VERDEXCHANGE Green Marketmakers Conference, you led a panel on leveraging the opportunities that public-private partnerships (PPP) play in integrating infrastructure and the environmental goals in California. What progress has been made in utilizing PPP to finance these large infrastructure projects?
Baylis: First, let me compliment VERDEXCHANGE for bringing top leaders and decision makers to the 2010 conference. From Portland Congressman Earl Blumenauer, who is well known for his leadership in water, to local and state leaders like L.A. Supervisor Zev Yaroslavsky and California BTH Secretary Dale Bonner, who is one of the best advocates for private-public partnerships in California.
Private-public partnership is a tool; it is not the panacea; it is not the answer. It is one important tool for us to use. If public agencies have gaps in financing, they can use this tool to bring on financing. However, the financing approach is only one aspect; it is much more than that.
Private-public partnership brings a team, or a concessionaire, that, if structured well by the contract, takes responsibility of a project—from the design and construction onto operations and maintenance. The private entity that partners with a public agency doesn’t get paid unless that structure—either that bridge or water treatment plant—is not only built, but is operating properly every year. The designer or builder looking for the partnership devises a plan to optimize the structure so they don’t have to significantly redo or reinvest unnecessarily; i.e., they do it correctly the first time. Conventional low-bid public works get it done cheaply and quickly. And we’ve seen, lowest bid does not equal lowest costs, especially when you look at life cycle costs. Private-public partnerships secure an approach in design and construction for that structure to last a longer period of time. That is how the concessionaire is paid back—the payments happen every year or are based on a toll or annual payment while (and if) the structure operates well.
VerdeX: With Dale Bonner and the governor of California supporting the concept, why has it been so difficult to link PPP to the infrastructure projects that are on the state’s agenda?
Baylis: It is a new tool. Private-public partnerships typically involve the design-build approach, which people are just getting comfortable with. Most bureaucracies are comfortable with the traditional approach. If you bring those tools, you really have to demonstrate that they work. There have been leading-edge examples that didn’t get the contract right or they didn’t understand that the tool worked and it was bumpy. California has suffered some of those bumps. The tool has been refined; there have been some great success stories, such as with toll roads. Miami is doing a tunnel where, through PPP, it actually came in cheaper than the engineering estimate. When you optimize the design and get it done in a shorter time frame, you can save on construction costs. The tool is ready for implementation. This administration, with the governor and Dale Bonner, recognizes that. They recognize the many benefits of private-public partnerships. That is why now is a good time to implement it.
VerdeX: You spoke on a panel entitled “One Water” at the VERDEXCHANGE Green Marketmakers Conference in January. Elaborate on AECOM’s notion of “One Water.”
Baylis: It is an understanding for many people in water leadership. The concept of “One Water” calls to attention the fact that people created a disconnect by thinking of wastewater, stormwater, and water supply as different systems. We drink the same water the Egyptians drank. Water is not new. The same water that falls as rain and goes down the storm drain is collected in the municipal water supply. The same water we flush down our toilets goes into a treatment system that ends up back in the water cycle, goes up into the sky, and comes back down as rain. There is no new water. The water we use is constantly being recycled and cleansed. People need to recognize that we need to treat water better; we need to take care of it. We need to recognize that what we do with that water impacts future generations. If people can understand that, they can understand how important it is to invest in stormwater and good water supply.
VerdeX: As a design and engineering firm, AECOM was recognized as the top U.S. design firm by Engineering News-Record (ENR) magazine and the American Society of Civil Engineers named the Sutong Bridge project in China the “2010 Outstanding Civil Engineering Achievement.” AECOM also won accolades as team member on the new police headquarters in Downtown Los Angeles. Talk a little bit about the capacity and record of AECOM in design and engineering.
Baylis: That was great recognition. The same team did the Sutong Bridge and another similar bridge in Hong Kong, called Stonecutters Bridge. The design for Stonecutters Bridge is the same design that the Port of Long Beach is using for the Gerald Desmond Bridge. It is a great bridge. Our folks in Asia were able to demonstrate that with the Sutong and Hong Kong Bridges.
The police building is the same architectural team that did the RAND building in Santa Monica. We have great leadership in architectural design, and we have worked with some great local partners. What we call Planning, Design, and Development is one of our leading practices in the world in design—from the London Olympics to the Beijing Olympics to buildings in Hong Kong and London. We have a great Building Engineering group that we are combining with that architectural practice to really frame the state of the art design and technology for that industry.
VerdeX: Your current title is U.S. Group Executive for Strategic Development. Talk a little about the depth and scope of that position so our readers better understand what you will be doing in the future.
Baylis: My role at AECOM involves working with teams to help bring in major projects across our business lines. It is where we want to strategically invest our resources to promote and compete for projects that are large or strategic in nature. My impetus is to look for those elephants around the U.S. and, sometimes, the globe. I have been spending time in Mexico and Asia, looking for large projects where we can bring talent and resources to help our client achieve their needs. VerdeX: As Los Angeles works to turn its economy around, what are the benefits of AECOM headquartering in Los Angeles? Baylis: Not only do we provide a great tax basis, we understand Los Angeles. It is very important to have people live in the community they work in. That way they compliment and understand the political issues and the community issues. When we work, whether it be a private or public sector project, we are aware of how it connects to the other projects and people in that community. The greatest value we bring to Los Angeles is that we know it and it is important to us. We want to serve Los Angeles.
VerdeX: Included in this issue of VERDEXCHANGE News is an interview of Congressman Blumenauer from Portland, Oregon, who, as you noted, was on your VERDEXCHANGE Conference panel. The federal recovery agenda was to be focused on shovel-ready infrastructure projects. Has it managed to achieve those goals? What is your hope regarding the Congress and for the federal stimulus funding?
Baylis: The Obama administration has set into motion some great infrastructure projects for transportation. And the administration has appointed some great leadership at Interior, for the EPA, and for water. What is important is that we continue to invest at the federal level, focusing and enabling projects.
What is great about people like Congressman Blumenauer is that he began his public career in Portland, Oregon, in local government. Portland is a progressive city regarding infrastructure investment. They have done some especially great work on water—downtown waterways, water supply, and water supply. Portland is a good example of a well-run city, and Rep. Blumenauer, serving at the city level and now 14 years in Congress, understands the importance of leveraging local and federal vision and funding. •••