Monday, October 29
INFRASTRUCTURE SITE VISITS
As an integral part of the Global Infrastructure Initiative (GII) program, we will be hosting six infrastructure and technology site visits, learning how some of London’s leading organizations are improving the way that infrastructure is planned, financed, delivered, and operated. The list of site visits include:
BATTERSEA POWER STATION
Battersea Power Station is one of central London’s largest and eagerly anticipated regeneration projects. It will see a 42-acre former industrial brownfield site, which had been derelict for 30 years, transformed into a new town center for London. The £9 billion regeneration will deliver thousands of new offices, homes, restaurants and retail space. It will also include 18-acres of public space and major infrastructure improvements including a new Zone 1 London Underground Tube Station. Once completed in 2020, over 40 million visitors are expected to visit the destination each year. https://batterseapowerstation.co.uk/
When completed this year, 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. Crossrail and the new railway (the Elizabeth line) is a wholly owned subsidiary of Transport for London (TfL) and is jointly sponsored by TfL and the Department for Transport. Once completed, it will be handed over to TfL and run as part of London’s integrated transport network. http://www.crossrail.co.uk/
LONDON BRIDGE STATION
London Bridge is the fourth busiest station in the country, bringing around 56 million passengers into the city each year. The Thameslink Programme has transformed London Bridge station to make it bigger, better and more accessible. Since opening in January 2018, passengers have benefitted from new platforms for more trains, a huge new concourse and better connections. The redevelopment of the station has made it a destination, optimizing the transit oriented development opportunities. Importantly, this development has expanded the capacity to 90 million passengers per year. https://www.networkrail.co.uk/running-the-railway/our-routes/south-east/london-bridge-improvements/
QUEEN ELIZABETH OLYMPIC PARK
Spread across 560 acres of parklands, Queen Elizabeth Olympic Park (QEOP) is home to landscaped gardens, historic waterways, famous sporting venues, and a vibrant arts and events program. QEOP opened in April 2014 following the 18-month transformation program of the London 2012 Olympic Park. The Park is still transforming and will soon provide additional homes, jobs, education and cultural facilities. The London Legacy Development Corporation (LLDC) is responsible for promoting and delivering the physical, social, economic and environmental regeneration in QEOP by maximizing the legacy of the London 2012 Olympics. Mace are the project management partner and have had a presence on the Queen Elizabeth Olympic Park since 2007. http://www.queenelizabetholympicpark.co.uk/
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. The project will upgrade London's sewerage system to cope with the demands of the city well into the 22nd century. Built from three main construction drive sites in Fulham, Battersea and Southwark, the Thames Tideway Tunnel is expected to take up to seven years to build, at a cost of £4.2 billion. It will require the use of 24 construction sites, 11 of which are located along the river bank. https://www.tideway.london/
TRANSPORT FOR LONDON INTEGRATED CONTROL CENTER
Transport for London (TfL) is the integrated transport body that runs nearly all the transport in London. As the Mayor of London’s executive body, it has responsibility for the Underground, buses, light rail, the strategic road network, management of road traffic and more. Given the breadth and varying age of the services, a wide variety of technical tools are used to keep the city moving. The interface between highly automated systems and human intelligence deals with complex situations every day, from the routine challenges of peak demand to unusual situations such as terrorist attacks. The visit to the control centers will demonstrate how these activities are brought together in a coordinated manner to provide seamless support for 27 million journeys every day. https://tfl.gov.uk/
WELCOME AND FRAMING
IMPROVING MAJOR PROJECT DELIVERY THROUGH DIGITAL TRANSFORMATION
Digital technology is disrupting industry structures and the way major capital projects are planned, financed, built, and operated around the world. McKinsey suggests that, by using existing technology, companies reduce project costs by up to 45 percent, and even bigger gains are possible for organizations that move first and fast. What are some of the most exciting solutions that have emerged in the past year?
PLAN: STRUCTURING MAJOR PROJECTS FOR SUCCESS
Major projects are continuously buffeted by strong forces—cost overruns, politics, regulations, and civic protests. It is essential to structure projects to be resilient to these inevitable stressors by clearly allocating risks and roles. What can be done to improve stakeholder alignment, risk planning, and execution governance to maximize the chance of success? How do we create the capacity and necessary capabilities in the public sector? How can technology improve the odds?
FINANCE: RETHINKING THE ROLE OF THE INSTITUTIONAL INVESTOR
With brownfield assets hotly contested and in short supply, the returns are considerably less favourable for investors than they once were. This trend has resulted in one of the biggest shifts in infrastructure finance over the past decade—institutional investors are going after greenfield projects. As institutional capital gets involved earlier in the project life cycle, what engineering, consulting, and other technical expertise will be required to engage and manage the development risks? What new collaborations and business models will unfold? What technologies and approaches—such as data analytics and capex optimization—can improve the outcomes?
DINNER AND KEYNOTE DISCUSSION
Tuesday, October 30
DISCUSSION SESSIONS Participants select one of four concurrent pillar discussion sessions
PLAN: PREPARING FOR THE FUTURE OF ENGINEERING
The engineering and construction industry is on the cusp of a new era, with new applications and tools changing how companies design, plan, and deliver projects. With major projects increasing in complexity and cost, what needs to change to benefit from digitization, automation, vertical integration, and solution selling? How will these technologies change project execution, and who will capture the “technology dividend”? How will the roles of engineers, designers, owners, and investors change?
FINANCE: INNOVATING REVENUE MODELS FOR MAJOR PROJECTS
Given their complexity, long-term return profile, and delivery risks, a compelling and robust business case is essential to finance major capital projects. Beyond optimizing the capital profile of the project and reducing schedule risks, what creative new revenue models can be deployed to maximize funds and improve bankability? How can we use digital technologies to create new value in project sourcing, evaluation, structuring, and risk allocation?
BUILD: RECOVERING PROJECTS IN DISTRESS
More than 90 percent of major projects face schedule delays or cost overruns. To manage risk, stakeholders must collaborate to increase the transparency of a project’s status and change the behaviours of the project team. What does it take to identify a distressed project earlier and fix it before the situation becomes unmanageable? What proven strategies can help owners and contractors reset a project, thus saving on costs and reducing delays? What is the role of technology in assisting this process?
OPERATE: ADAPTING TO THE FUTURE OF MOBILITY
Every day, billions of people and tons of goods move by road, rail, air, and water. The consequences are significant—pollution, CO2 emissions, congestion, and a massive load on public budgets for maintaining and improving our transportation infrastructure. However, in response to a wave of new technologies and financing pressures, we are beginning to experience major shifts in mobility. How can mobility players adapt to a future that is increasingly autonomous, connected, electrified, and shared? How will future mobility patterns change the value pools in traditional asset classes? What technology will customers expect operators to deploy to improve their experience?
BUILD: USING COLLABORATION TO IMPROVE PERFORMANCE
The relationship between owners and contractors is broken. For years collaboration has been heralded as the answer, yet the theory is stronger than the practice. How do we overcome the barriers that prevent us from implementing collaborative approaches? What innovative risk-sharing and supply-chain solutions (with supporting contracts) could build trust and incentivize better performance? How do the roles and business models of owners, contractors, and investors need to shift?
OPERATE: DIGITIZING INFRASTRUCTURE ASSETS
Digitization is inevitable and is already happening in certain asset classes. As end-to-end optimization, IoT, and digital twins become mainstream, the way we design, deliver, operate, and maintain our infrastructure will be radically different. In addition, infrastructure “customers” are demanding the same experience they receive from already digitized services. What needs to be done to accelerate digitization across all asset classes? What are the individual and institutional capabilities needed to make persistent use of digital assets? Is the case for digital twins as strong as we have been led to believe?
CROSS-CUTTING: CULTIVATING GREAT PROJECT LEADERS
Several studies indicate that the project leader is the primary driver of project performance but organizations have struggled to identify their peak performers and build these capabilities in-house. How can the industry bridge the talent gap and cultivate a skilled and diverse class of project leaders? How will the typical project leader role change in a digital environment?
CROSS-CUTTING: CONNECTING EURASIA
Multiple initiatives point to the growing importance of connecting countries in Europe and Asia—the Asian Infrastructure Investment Bank is a new multilateral development bank with members across the world; new investors and capital pools have emerged to help build out China’s Belt and Road Initiative (BRI); and India, Russia, Turkey, and the European Union are working on improving connectivity. How are multinational projects being financed? What opportunities exist for international companies to engage in BRI projects? How can high standards and good governance be assured?
SOLUTION SESSIONS Participants select one of four concurrent solution sessions
Participants will select one of four concurrent pillar solution sessions, each focusing on a major global project. A senior executive from the project will spend 10-minutes introducing their project and framing of the biggest challenges faced by the project team. The participant group, representing deep expertise from around the world, will spend the remaining 50 minutes in a facilitated discussion, solving for these challenges. We are in the process of identifying the best project candidates and will announce them in early-September.
DISCUSSION SESSIONS Participants select one of four concurrent pillar discussion sessions
PLAN: CREATING RESILIENT AND CLIMATE-SMART INFRASTRUCTURE
Increasing coastal urbanization, coupled with climate change and sea level rise, is dramatically intensifying the impact and cost of major storms. In the United States, the cost of weather and climate related disasters in 2017 alone reached $310 billion. How do we adjust our economic model to address the current and likely future vulnerabilities in our infrastructure? Who is best positioned to develop a long-term, sustainable path forward? How can technology assist in increasing resilience and mitigating risk?
FINANCE: WINNING IN A WORLD OF DIGITAL DISRUPTION
Technology is disrupting infrastructure investing by challenging the viability of certain assets and business models, while simultaneously opening new opportunities. This has resulted in a wave of new players competing for assets in this rapidly evolving space. How are these new infra investors identifying and engaging with the most transformative new technologies? What can be done to accelerate technological adoption across the sector? How do the incumbent investors compete in this new era?
BUILD: ADAPTING THE E&C BUSINESS MODEL
Completing projects on time and on budget under existing business models is increasingly difficult. Owners are taking on more ambitious and complex projects and expecting better productivity, stretching some contractors to the limit. Simultaneously, huge investments have poured into technology start-ups that are disrupting how traditional E&C activities create value. How do E&C companies adapt their business models to compete in this new world?
OPERATE: MAKING THE MOST OF BROWNFIELD INVESTMENT
To improve capacity, it is imperative to optimize existing infrastructure through improved operations and additional investments. How do we identify the small investments that can have major impacts? What goes into deciding whether to upgrade, repurpose, or rebuild existing infrastructure? How do we redesign assets to be agile?
THE BEST IDEAS
Recap of the best ideas, insights, and actions from the Global Infrastructure Initiative
DINNER AND ENTERTAINMENT MADAME TUSSAUDS
Wednesday, October 31
GII will be hosting three concurrent sector-specific roundtables covering Engineering & Construction, Energy & Resources, and Real Estate. The roundtables offer the opportunity to go deeper into specific sectors on some of the most exciting topics.
THE FUTURE OF REAL ESTATE
Taking place from 09:00-15:00, this interactive Real Estate roundtable will tackle two core themes—the future of real estate and understanding London’s real estate market. The first half will explore exciting topics like the future of construction, the future of shopping malls, and trends in mixed-use property development. In each session, you will hear from leading industry CEOs and McKinsey’s real estate experts.
ENGINEERING AND CONSTRUCTION: BEYOND MODULAR: FROM PROJECTS TO PRODUCTS
McKinsey’s research has demonstrated the significant productivity opportunities presented by modular, new materials and other technology-based solutions. However, different asset classes are better suited to different combinations of solutions and the path is not always clear. Focusing on three asset classes—real estate, tunnels, and airports—participants will explore what it will take for the construction industry to move beyond modular and what technology best applies to the respective asset classes. What could success look like, what shifts are required, and how do we get there?
ENERGY & RESOURCES: DRIVING PRODUCTIVITY THROUGH DIGITAL TRANSFORMATION AND INNOVATIVE PROJECT LEADERSHIP
While energy and resources major projects have been growing in complexity and scale, schedule and cost performance has been stagnant for decades. However, increasing cost pressure in the industry is forcing market players to mitigate this productivity challenge and two enablers have risen as top contenders to address this challenge:
- Digitization of major projects - with a plethora of new digital solutions emerging, navigating the new digital landscape is difficult. How do we identify where digital can deliver the most value to our organizations and customers? What strategic decisions and capabilities are required to position an organization for market leadership?
- The art of project leadership - little attention has been paid to the “soft” organizational and leadership elements of major project delivery. Why do major projects continue to fall short of expectations despite so much experience, learning, discussion, and analysis? What are the unique success factors deployed by those who have managed to avoid significant time and cost deviations?
REAL ESTATE: HARNESSING LONDON'S REAL ESTATE MARKET
The second half of the Real Estate roundtable will take advantage of the location to provide participants with expert views of one of the most important property markets in the world—London. Participants will consider best practices in London's real estate development, planning in the UK, and lessons from project execution in London.