Infrastructure

Murray Rowden discusses how owners and investors are assessing the impact of infrastructure programmes and considering their legacy, whether that is via job creation, upskilling workers or wider socio-economic and environmental benefits.

Although there is uncertainty in the global economy, commitment to invest in infrastructure across the world remains unprecedented with spending expected to reach USD94tn by 2040.

The drive for sustainability has become more pressing and governments are placing the planning of infrastructure programmes at the heart of transforming and connecting cities, shaping communities and contributing to a sustainable urban future. Against this backdrop, our infrastructure business performed well, achieving 21 percent growth.

  • £178m Net revenue
  • +21% Net revenue growth

A changing landscape

The challenges facing the infrastructure market today are fundamentally different from those of any other time. Technology is changing the way we live and use our built environment and, at the same time, there is a growing movement towards responsible investment focused on social and community value.

Owners and investors are assessing the impact of infrastructure programmes and considering their legacy, whether that is via job creation or upskilling workers, or wider socio-economic and environmental benefits.

The viability and funding criteria of big infrastructure projects has never been more conditional on the impact they have on their local environment.

Furthermore, digital and physical infrastructure are moving at completely different paces. While we are building assets to last for more than 50 years, the embedded technology is becoming obsolete in a relatively short period of time.

In response, the planning and execution of projects now need agile and flexible delivery models. Traditional approaches are no longer fit for purpose.

There is increasing demand for investment in infrastructure, with vast sums of investment capital waiting to be deployed seeking long-term returns.

Over the last year, growth in our infrastructure business was largely driven by the UK, Middle East and Australia, making up over 80 percent of sector revenues, and the contribution of the Americas and Asia is increasing.

Overall, the business grew to £178m due to a number of major new contracts and an increasing focus on providing an offer centred on enhancing performance and increasing productivity.

In the UK, we have been helping clients including Heathrow Airport, Highways England, Network Rail and Sellafield Ltd on its transformative and complex programmes.

We were also appointed by the Australian Rail Track Corporation to provide a Programme Management Office for the Inland Rail project. Spanning more than 1,700 km, Inland Rail is the largest freight rail infrastructure project in the country and one of the most significant infrastructure projects in the world. We also won major contracts in Canada and Asia, including work on the Hong Kong MTR.

Success in the aviation sector continued. We are now working on 30 major airport projects including the expansion programmes at Schiphol, Heathrow, Lima, Toronto Pearson and a new greenfield site for the new Western Sydney International (Nancy-Bird Walton) Airport.

Our portfolio of rail projects expanded and showcased new innovations such as Sydney Metro, the first driverless passenger railway in Australia and Virgin Hyperloop One in India.

The emergence of new technologies is set to shape the industry going forward and we have seen an uptake in clients looking to create smart assets which adapt to changing infrastructure priorities.

A new industry model

There is growing interest in alternative funding and delivery models designed to attract investment, improve performance and encourage the wider creation of value.

In the UK, we have been working on the groundbreaking Project 13 which is moving industry towards aligning the commercial model to outcomes.

We are working with governments around the world on their national infrastructure plans and maturing methods of benchmarking and measuring major programme performance.

But there are challenges. Investors are becoming more intelligent on risk and, as the rise of populist governments continues we have seen infrastructure projects influenced by wider stakeholders. This has challenged the viability of some projects.

As a result, corporate responsibility is orientating towards more populous decision-making and funding models that build in the concept of ‘beneficiary pays’, where businesses that gain benefit from improved infrastructure contribute.

Shaping the future

We plan to capitalise on the success we have had in air and rail, and invest in helping clients navigate through the digitalisation of their assets and plan for a greener future.

We have increased investment in digitalising our own service, capturing and deploying data for better decision-making as well as increasing our market share in the utilities and power sectors, particularly in clean energy.

We will continue to leverage the benefits from our mergers with AMCL and Suiko to improve the way organisations manage their assets and help them to drive operational efficiencies, integrating our asset management advisory skills with our programme management offer.

As large-scale infrastructure programmes become more and more complex, our objective remains to help our clients benefit from global best practice and fully realise the desired outcomes

Annual review 2018-2019