Developing, managing and assessing infrastructure investments
The federal government continues to boost community economy in Canada by building a multi-billion-dollar funding plan aimed at helping develop infrastructure across the country. The 10-year plan provides provinces, territories and municipalities with new funding for investments such as public transit, social infrastructure and green infrastructure.
But with big funding come big responsibilities…and risks. In addition, implementing a large capital project or program can put a strain on resources. Receiving the capital to support infrastructure is only the first step of a complex process. In order to succeed, it’s important to put in place a strategy that goes from preparing and planning, including the application for funding, to procuring and executing—a plan that addresses every part of the project’s life cycle.
Is it the right infrastructure investment? What are the risks associated with the project? What are the financial and social benefits? What are the skills and resources needed? How to control costs and schedule? How to meet value expectations?
Johanne Mullen, Partner, PwC Canada
Engaging in an infrastructure project without having the expertise or proper processes in place could cause money to be wasted—a situation that would not only force organizations to go over budget, but could also damage their reputation, lead to media scrutiny and, ultimately, jeopardize an entire project.
Having big amounts of capital can be a challenge, but addressing those challenges with a project control framework allows organizations to better prioritize, manage and budget each infrastructure development. Municipalities need to make sure money is being used in the best way possible, gathering the resources, special skills and capabilities necessary to be effective, while staying in constant communication with stakeholders to avoid surprises throughout the process.
Understanding all the stages of a major capital project—and its investment life cycle—will give organizations the ability to put together a successful plan for building a strong and sustainable infrastructure now and in the years to come.
Our strategic journey consists of three main offerings that work together and provide a complete set of services across the life cycle of a project. Whether it's identifying the right project, justifying the capital investment, providing risk assurance or making sure the processes are being executed to standard, this journey is imperative when developing an ideal infrastructure funding plan.
How can you identify projects suitable for receiving funding from provincial and federal levels?
This area focuses on the upfront and early phases of the cycle. Before receiving any infrastructure capital, provinces and municipalities need to have a robust plan that justifies the capital project. Developing the appropriate business cases for investment decision approvals, while expanding partnerships among the public sector, will help build a strong foundation for a winning case.
Using the right tools to analyze and prioritize different capital investment opportunities will ensure the funding gets approved with as much capital as possible. This initial assessment becomes key once the project is approved, as it helps prepare organizations to maximize their resources and capabilities when it comes to executing the project.
“Funding is still finite. It's not limitless. Municipalities need to be very careful when designing, managing and scheduling their projects. They need to make sure that they’ve got control over their budget as the project is being constructed.”
Are you following the right processes and execution plans?
This area targets the consulting element of the cycle, focusing on designing accurate processes and providing the appropriate tools and leading practices to help improve the infrastructure project. Implementing the right mechanisms lets organizations take advantage of a system designed to monitor and control each initiative.
This step of the journey also helps with the execution and oversight of the project—commissioning, construction management or procurement. It’s important to build appropriate rigour within the organization with suitable capabilities and skill sets to provide the necessary level of oversight at any phase.
“In many cases, organizations relinquish their oversight and ownership role to contractors. You need to have at least the ability to oversee and make sure that the public money is being spent in the most appropriate way. You need to make sure that you are getting the value you expected to get, and that requires special skills, capabilities and processes.”
Is the execution properly governed and controlled?
Risk management control provides assurance over every step of a capital project. The risk assessment applies robust controls throughout each stage of the cycle, allowing for easy decision making when allocating funds and reviewing and tasking processes to make sure they're operating effectively.
The objective is to make sure all the key critical governance processes, oversight actions and standard operating procedures for each project are in sync, so the plan adheres to budget and can be delivered on time. Following a controlled and governed model that’s based on strong analysis will facilitate timely project delivery.
“The opportunity here is to be able to provide assurance over all the governance, managing risk through each phase of the project. Whether it's a hospital, a bridge or a road, organizations should be able to provide assurance over everything.”