Is no one concerned anymore with the state of the foundation of our economy? Say what you will about Donald Trump, but the American President, along with other world leaders, has understood one crucial point: we need to reinvest in our infrastructure. However, this is not merely to create jobs, but to address a more pressing issue: vast parts of the world are subsisting on decaying infrastructure, unaware of the ticking time bomb beneath them. Don’t believe me? Here are a few warning examples: a study by the World Health Organization estimates that nearly 660 million people currently lack access to clean drinking water. According to data from the Alliance 90/The Greens, over 1,000 railway bridges in Germany are in disrepair, and 46% of the bridges on Germany’s federal highways have exceeded critical thresholds. Still not convinced? The German Economic Institute warns that the country’s transport infrastructure is shifting from being an asset to a liability. But what are the causes behind this global decay?
The Aging Infrastructure
Infrastructure is inherently complex, and so are its crises. Infrastructure is the foundation, the backbone of an economy, but this foundation has become fragile. Roads, railways, waterways, as well as energy and telecommunication networks, are deteriorating. One of the main reasons is the age of much of this infrastructure. Many bridges in Germany, for instance, were built either in the post-war era or even earlier. Nearly half of Germany’s 25,682 railway bridges are over 80 years old, and their designers certainly didn’t anticipate today’s traffic volumes. Little thought was given to long-term planning, and while new projects were undertaken with vigor, maintenance and repairs were seldom budgeted. However, there is some light at the end of the tunnel. Policymakers, scientists, and industry leaders agree that Germany must invest more in preserving infrastructure today so that future generations can rely on this foundation as a guarantor of prosperity. And it’s not only a German trend. To meet the rising demand for modernization, governments and investors worldwide are increasingly committing to infrastructure projects. China plans to invest $6 trillion over the next decade, the UK $375 billion by 2030, and the US $300 billion over the next four years. But will these investments be enough, or must our entire approach to infrastructure change?
Creators and Users of Today
Our infrastructure is caught in a state of lethargy. I often hear people say, “I pay some price for some level of quality that I have no control over.” Unfortunately, most users of infrastructure still show little interest in the infrastructure itself. The foundation of our daily lives is taken for granted, seen as unchangeable. Indeed, the “price” citizens pay for infrastructure, largely through taxes, remains quite opaque, especially in terms of the indirect benefits it provides. Adding to this, users focus primarily on the “product” that infrastructure enables. What they overlook is that in many areas, the quality of the “product” heavily depends on the underlying infrastructure. In the last election campaign, broadband expansion finally became a topic that got more people thinking. Yet, awareness among infrastructure creators and users remains limited in many areas.
A Sign of the Times
But where does this indifference come from? Why aren’t we more interested in what we use every day without a second thought? Especially in Germany, this can be attributed to the subjective perception of infrastructure. Most feelings and emotions associated with it are entirely negative: too late, too expensive, dirty, congested. The list goes on. This effect is amplified by the numerous horror stories about infrastructure projects: the Stuttgart 21 train station, the Rheintalbahn in Rastatt, Berlin’s airport. It’s also true, however, that media coverage of many projects is often exaggerated and, as mentioned earlier, largely shaped by a lack of understanding.
How are infrastructure projects planned? How do they unfold? Due to limited investment in infrastructure and the absence of recent large-scale projects, many citizens are no longer familiar with such projects. Additionally, some infrastructure operators have exhibited a lack of professionalism, leading the public to remember only the failures. Operators need to draw attention to their product and its benefits. Often, there’s a lack of true customer focus. But how can that work if operators are unaware of their stakeholders’ needs or fail to proactively monitor them? The Dutch and the British offer examples of how it can be done better. They are one step ahead in tracking and understanding customer needs and what people are willing to pay for them. Moreover, many infrastructure operators, whether municipal or private, lack the “owner’s expertise.” Due to insufficient know-how, too many tasks are delegated to a host of operational service providers. As a result, inefficiencies, errors, and delays are common.
A Look to the Future
Not everything is negative – there are success stories and global role models. In transportation infrastructure, for example, the Hong Kong transit operator MTR finances itself solely through ticket sales (cost-efficiently) and boasts incredibly low delays. In addition to a necessary shift in users’ mindsets, there are pathways for infrastructure operators to become more professional. Value-Based Asset Management methods lead to transparent, goal-oriented actions by motivated decision-makers and operational employees. Infrastructure management means determining the real infrastructure needs, protecting the environment in the process, and ensuring adequate quality at the best possible cost. Through my company, Meliorate, I have been supporting infrastructure owners and operators in these matters since 2011.
Author: Lars Overdiek