It’s not often than governments are told to stop worrying about new infrastructure. True, observers have underlined how the economic rationale behind grand, costly projects can sometimes be questionable – particularly in a handful of emerging nations, where new-built infrastructure is in some instances under-utilised. But encouraging greenfield is often presented as the way to plug the world’s growing ‘infrastructure gap’.
The World Economic Forum begs to differ. In a report published with the Boston Consulting Group, the Geneva-based organisation warns that while building new assets indeed ranks high on the global agenda, leaders in both the developed and developing world often neglect existing ones – leading to “increasing congestion, unnecessary operational costs and inadequate maintenance”.
The report reckons that growing consumer demand, constrained financing and ageing assets make it necessary for nations to get more out of their infrastructure base by extending its longevity and productivity. Addressing current weaknesses would help address what the World Economic Forum estimates is a global $1 trillion infrastructure investment need – while making sure spending goes towards well-assessed needs.
Better asset management – via the enablement and adoption of best practice in operation and maintenance (O&M) worldwide – are seen in the report as crucial in this effort. “In operations, [governments] fail to maximize asset utilisation and to meet adequate user quality standards,” its authors say. “Maintenance is all too often neglected, since political bias is towards funding new assets.”
Encouragingly, the World Economic Forum is optimistic this could be achieved. Best practice, it says, already exists across a number of sectors like airports, ports, power and roads. Recent innovation in digital technologies, such as remote sensing or advanced analytics, can help bring about further efficiency gains.
But another argument advanced by the organisation may have yet more traction among cash-strapped governments: such optimisation efforts remain largely affordable, being cost-effective in an otherwise capital-intensive industry. “Even small O&M improvements can make a remarkable impact, given the large size of the global asset base, where each percent of improvement translates into billions of dollars saved.”