The United Kingdom is in the midst of a major infrastructure expansion phase with a number of megaprojects in the planning, development and delivery phases. Similar expansive phases took place in the nineteenth century with the development of the London Underground and the post-World War II rebuild. On October 14, a group of infrastructure leaders from ten countries visited two of London’s most ambitious and innovative infrastructure megaprojects —Crossrail and Tideway.
When completed in 2018, Crossrail will link four major London economic centers: Canary Wharf, the financial district, the West End, and Heathrow Airport. The £14.8 billion rail line’s program to identify and implement new ideas, Innovate 18, is one of the reasons why Europe’s largest infrastructure project is running on time and on budget, seven years after construction began. Tideway is the organization delivering the Thames Tideway Tunnel, a 25km sewer tunnel needed to prevent an annual average of 20 million tons of untreated sewage discharge from entering the River Thames.
Andrew Wolstenholme, CEO of Crossrail, and Andy Mitchell, CEO of Tidewater, led the respective visits, sharing how the innovative approaches taken can be broadly applied to megaprojects worldwide. Steve Allen, CFO of High Speed Two, joined the group for lunch to discuss the strategy, economic impacts and delivery plan for this forthcoming £55 billion megaproject.
Some of the key themes that emerged during site visits and discussions included:
- The government is the primary enabler of major infrastructure development. Per Chris Heathcote’s observations in his Voices article, making infrastructure a core part of the economic development strategy, encouraging public-private partnerships, and vesting decision-making in a single government entity are key steps to enable infrastructure development.
- Positive stakeholder engagement goes a long way to getting public support. London’s infrastructure organizations have been exceptional in engaging stakeholders early and comprehensively throughout the development and delivery process. A strong communication strategy has helped focus stakeholders on the net benefits of the completed projects.
- Independent governance structure promotes efficiencies. Establishing an independent board goes a long way to ensure efficiencies in the management and execution of megaprojects.
- Cultivate a culture of innovation. Crossrail has broken the mold in UK construction by being the first organization to develop a strategy and process for managing innovation in mega projects. Innovate18 systematically identifies and delivers improvements based on ideas generated from people across the project. At the heart of Innovate18 is a commitment to deliver capability, collaboration and culture.
- Develop skills through in-house and apprenticeship programs. Crossrail’s Tunneling and Underground Construction Academy and Apprenticeship Program have been revolutionary in meeting the skills training needs of the Crossrail project and the wider industry. Tideway have benefited from these skills and initiated their own specialist training and apprenticeship programs.
- Create innovative financing structures and limit investor risk. Tideway’s innovative financing model has resulted in 42 percent of the project funded upfront by equity investors. Investor and project risk is limited due to RPI-linked revenue; multiple build contracts with incentives and risk transfer to contractors; Government guarantees on debt availability; and caps on investor exposure which allows for worst-case scenario modelling.
- Ensure legacy planning. The methods and skills from Crossrail and Tideway are systematically being institutionalized to ensure that the entire industry benefits. Innovate18 has become a national program to benefit future infrastructure projects. Additionally, Crossrail have established a Learning Legacy Website to share insights from Europe’s largest infrastructure project.