Research from Oxford University reveals that mega infrastructure projects typically exceed budget expectations, with overruns occurring nine out of ten times. This unsettling trend, observed in a study led by Professor Bent Flyvbjerg, examined 16,000 projects and found that average overruns often reach double-digit percentages. A key factor in these failures is that crucial decisions impacting project outcomes are often made too early, when flexibility is highest but information is limited.
Jasna Sims, head of client delivery at Akordi, emphasizes the significance of early decision-making. “The decisions you make at the beginning, when you have the most options and the lowest cost to change, fundamentally shape what you can deliver at the end,” she notes. Akordi leverages hindsight analysis, predictive analytics, and optimization models during the pre-feasibility and concept design phases, maximizing the impact of initial decisions.
Complex Challenges in Mega Projects
According to Dr. Regan Crooks, director of strategic programmes at international engineering firm Laing O’Rourke, the environment for major projects has become more complex than ever. Factors such as economic volatility, geopolitical tensions affecting supply chains, and acute talent shortages contribute to the challenges faced by project managers. “It’s more important than ever to achieve good community outcomes from these projects,” Crooks states. Involving construction expertise early allows teams to anticipate how external factors may impact delivery and to build resilience from the outset.
Crooks further adds, “What’s changed is the practicality.” With Akordi’s expertise combined with artificial intelligence capabilities, teams can now evaluate various construction methods, understand their implications, and explore trade-offs with the necessary speed and rigor. If Professor Flyvbjerg’s findings hold true, the $213 billion Australian infrastructure pipeline could face significant delays and cost overruns unless substantial changes are implemented in project management strategies.
Innovative Solutions for Project Delivery
In one notable case in Victoria, a large-scale program faced mounting schedule pressure just six months into delivery, risking timeline derailment. Coordination challenges among multiple stakeholders, a common issue in complex infrastructure delivery, prompted the asset owner to engage Akordi. The firm tested alternative construction methods, assessing their potential performance and impact on the overall schedule.
Over several weeks, Akordi modeled variations in construction sequencing and temporary works approaches. This analysis revealed substantial potential for schedule savings, demonstrating a possible fourfold return on investment. “This approach allows for schedule recovery – or mid-course correction – after challenges emerge with tangible results,” Sims explains. Early results indicate a promising five percent cost saving and a reduction in schedule by between seven and eleven percent. For a $3 billion project, this could translate to savings of up to $150 million and a reduction of up to one year in construction time.
The most promising applications of these strategies involve manufacturing-led construction, off-site assembly, modularization, and design for manufacturing and assembly (DFMA). Crooks asserts that these modern methods consistently yield significant program improvements. “The key is getting that expertise to owners early, when the impact and opportunity are greatest,” he adds.
Akordi’s approach enables asset owners to test and validate manufacturing methods against traditional techniques, quantifying schedule and risk improvements in real time. This capability is particularly beneficial as skills shortages and supply chain constraints make conventional methods increasingly challenging to execute.
As the construction industry looks to the future, the role of artificial intelligence in infrastructure delivery remains to be seen. Nonetheless, early indications point to a promising shift. “Enhanced decision-making capability in the face of complexity – that’s the differentiator,” Crooks concludes. The combination of deep construction knowledge with advanced analytical skills represents a commercially significant advantage for Australia’s expanding infrastructure sector, making it clear that the opportunity to improve project outcomes is one worth pursuing.
