Built on Collaboration

An article in the business pages of The Age (Melbourne's main broadsheet newspaper) this week amusingly uses Bob the Builder to illustrate how the financial crisis has impacted the construction industry.

It's put that, whereas the previously optimistic Bob's catchphrase was "Yes we can" when asked whether he could dig it, build it or fix it, he may now need to qualify that with, "...but only if we can access the funds and transfer the risk to government." Not as catchy, but even Bob will have to ride this one out.

As mentioned in my recent post about Dubai's market, 'Decline in Dubai?', the silver lining in times like these is that it will give companies and governments a chance to better analyse and prioritise infrastructure projects.

If research by law firm Blake Dawson is anything to go by, this could be a very good thing. Their recent survey of the infrastructure industry found that a quarter of Australia's projects worth $1 billion or more experienced cost blow-outs of $200 million or more. Of smaller projects, one in five had cost overruns of more than 20% of their value. More than half of the respondents said that projects were not adequately defined in the first place leading to problems after contracts were signed. Clearly those with the purse strings need to be smarter about where the dollars are being invested.

The article concludes, 'Sound investment in infrastructure - which has been properly assessed and funded - will create jobs, stimulate the economy and help Australia play catch-up on the backlog of both major and minor pieces of much-needed infrastructure.'

I couldn't agree more and, as this will account for a large chunk of the construction and engineering industry's business over the foreseeable future, can only hope this thinking is echoed in many of the other markets that we're operating in.

Labels: Global trends