Forward-thinking: infrastructure investment in Ireland
14 January 2015
Author: David Smith, associate, EC Harris
Cautious optimism, often used by economists and politicians alike to describe the revived optimism in a faltering economy, is an appropriate term to describe Ireland’s outlook for short- to medium-term forecasts. The debt-to-GDP ratio is reducing, while Ireland’s access to global markets and growth forecasts all suggest a positive outlook for Ireland’s economic revival. However, the economy can only grow so far until the need for investment in infrastructure assets is addressed.
For Ireland to move away from an economy focused on construction and property, the country requires a modern infrastructure capable of supporting trade across multiple sectors. There is a significant contrast in trade forecasts between the Middle East and US – a look at global trade patterns suggests a trend towards the east. The Middle East has invested significantly over the past decade in metro systems, highways, ports and airports and has now become a transportation hub for goods and services between the west and east.
In contrast, the US has failed to invest in infrastructure assets over the past decades resulting in inadequate infrastructure throughout the country. Major transportation assets such as highways and airports are far behind the standard required to support the US’ competitiveness on international trade markets.
Although the US appears to be showing signs of economic recovery, the federal government has identified the poor state of the country’s infrastructure as one of the key elements which will impact its economic recovery.
Arcadis has recently issued the second global infrastructure investment index 2014, whereby the United Arab Emirates and Qatar have been identified as countries with the most attractive return on infrastructure investment.
The Middle East region recognises that a strong economy must be founded on strong infrastructure networks and is currently investing significantly to support the development of an economy which will not solely rely on fossil fuel production. Ireland should learn from the different approaches adopted by these countries for its future development.
Ireland’s geographical position has been highlighted as a major advantage for the country. Combined with corporate tax rate, Ireland commands a competitive advantage over international rivals, which should not be taken for granted. A modern infrastructure capable of supporting international trade is critical for Ireland to maintain this platform for further economic growth.
Rail, ports, drainage, telecommunication networks are all areas where improvements are required. Like any business case, investment is necessary in order to realise sustainable returns. Ireland’s economic recovery should be based on infrastructure platforms that can support growth for the next decade and beyond.
Delivering major infrastructure projects
Innovative and modern approaches such as programme management must be adopted for the delivery of major infrastructure projects. Leading organisations in this regard should embrace this opportunity – prioritisation of key infrastructure projects with appropriate funding and employing qualified professionals to deliver a portfolio represents a modern approach. This approach represents a sophisticated delivery model where optimised outcomes (technically and commercially) can be delivered.
In addition to adopting a programme management approach to the delivery of Irish infrastructure programmes, a sustainable approach for the industry’s construction professionals is crucial. Traditionally, Ireland has imported management professionals whom delivered a service without the knowledge sharing or skill development aspect. Should Ireland wish to embark on major infrastructure investment, the country should do so with the support of skilled professionals who have a vested interest in the country’s development.
A programme management approach represents a move away from more commoditised services allowing construction professionals to create a competitive advantage on domestic and potentially international markets. By supporting Irish construction professionals in developing this skill set, there is an opportunity not only to support Irish professionals but to support economic recovery in Ireland.
Skilled professionals have emigrated from the country, finding new homes abroad in countries such as Australia and America, learning international best practices and becoming leaders in their fields. These international Irish professionals should be attracted back to Ireland bringing their best international practices to the country and assisting with Ireland’s economic recovery.
Whilst it may not be possible to attract all of them back to Ireland, a dedicated approach to support Irish professionals from the government could avoid the loss of talent experienced in the 1980s and during the post-boom years in this century. Ireland should create focused efforts to retain and attract the return of its talented and experienced professionals to support the country’s economy.
The skills sets required for professionals to be able to adopt an integrated service delivery model will take time to mature, but with the support of academic, professional and government institutes in Ireland, a new sophisticated approach to the delivery construction works could be adopted. Programme-management approaches are increasingly being sought internationally.
Government and non-government agencies particularly in developing countries are continually seeking programme management professionals to support development programmes. This trend would suggest that programme management delivery models will contribute to the future of the construction industry and is an opportunity that Irish construction professionals can lead.
David Smith is an associate at EC Harris, an ARCADIS company and global built asset consultancy firm.http://www.engineersjournal.ie/2015/01/14/infrastructure-investment-ireland/http://www.engineersjournal.ie/wp-content/uploads/2015/01/Cranes-1024x811.jpghttp://www.engineersjournal.ie/wp-content/uploads/2015/01/Cranes-300x300.jpgCivilconstruction,infrastructure,investment,Ireland