Find out how public-private partnerships (PPPs) and joint ventures are constructing China’s One Belt, One Road (OBOR). signaling its intent to fund high-profile transportation infrastructure projects to spur economic development and promote trade.By 2015, the government had announced 1,043 projects totaling $318 billion in value and promised to streamline approvals and offer tax breaks for public-private partnerships (PPPs or P3s) in public services.
The importance of accountability and transparency
This trend of seeking private investment to build infrastructure assets without huge public capital expenditures began in the 1990s in the United Kingdom and then spread steadily throughout the West. In Asia, however, a lack of confidence in emerging regulatory frameworks, inconsistent risk allocation and the need for a dependable pipeline of credible projects greatly inhibited private investment. With OBOR, however, China has the opportunity to break new ground, as the country looks to reinforce its position as the world’s largest construction market and infrastructure investor.
The rise of public-private partnerships and joint ventures has expanded opportunities for firms across the construction industry, particularly in Asia. Projects that would be too big or risky for a single firm can become a good financial bet when tackled by a consortium. The key to attracting private investors in a large infrastructure project like those associated with OBOR lies in the ability of project owners, planners, developers and operators to structure and execute projects in a way that allows for ownership, risk and expertise to be shared. And, the quickest way to accomplish this goal is to partner with companies that have a proven track record of enabling P3s to deliver the highest levels of accountability and achieve complete transparency.
The best collaboration platform for a P3 and joint venture
In March 2008, the Hong Kong International Airport Authority awarded Cathay Pacific Services (CPSL) a franchise to design, build, finance, and operate a new air cargo terminal under a 20-year agreement. CPSL, in turn, awarded the construction contract to two of the city’s biggest contractors, Gammon and Hip Hing. Instead of storing project information on one of the contractor’s in-house systems, the joint venture agreed to keep everything on Aconex. The decision to use a third-party platform guaranteed that the partners would retain control of their information no matter what happened to the joint venture. At the same time, Aconex made it easy to share information of all types, regardless of file size.
In the United States, the Colorado Department of Transportation (CDOT) and the High Performance Transportation Enterprise (HPTE) – a division of CDOT that operates as an independent, government-owned business – were looking for a partner to manage information and processes for multiple CDOT highway infrastructure projects. The US 36 Express Lanes project was the state’s first P3 venture and came at a cost of roughly US$500-million.
Initially, the project team for US 36 used enterprise file-sharing software that combined content management and document functionality. Unfortunately, the software didn’t handle large engineering documents well, and managing essential project processes like bidding became time-consuming and onerous. The HPTE began looking for a new document management solution. Although familiar with Aconex as a result of its use on the Denver RTD FasTracks initiative, the team conducted an independent evaluation, reviewing multiple commercial options.
The importance of information and process control
Aconex emerged as the best fit for the project because of the information and process control that it extended across every organization on the team. At first, Aconex was only utilized for document management. However, it quickly became clear that the benefits of a single, neutral collaboration platform like Aconex were particularly well suited to projects requiring innovative financing by multiple public and private stakeholders. There were no limits on the number of files, the size of files or the types of files managed by Aconex, making it easy to share large engineering documents and multidimensional building information models (BIM). Finding information was easy, too, using metadata-based web search tools with keywords.
In addition, the project team found Aconex intuitive to use and learned it quickly. The success demonstrated by the US 36 team has helped encourage adoption of Aconex on several other HPTE highway projects. Even stakeholders who were initially resistant to change perceived the benefits of a platform that ensured that everyone worked the same way and followed the same processes.
In the end, Aconex was able to help CDOT and the HPTE mitigate risk, avoid costly overruns, delays and supply chain breakdowns, ultimately delivering additional value to taxpayers while implementing systematic project management processes for managing all elements of a complex P3 project from beginning to end.
The need for alternative delivery continues to grow
Opportunities abound in Asia for companies that can demonstrate the ability to provide both transparency and control. Aconex offers a platform where real collaboration on OBOR projects is possible, risk is shared and reciprocal trust can be forged. If you’d like to discuss an upcoming or ongoing OBOR project, or some of the challenges you’re facing, please reach out to me!
Source: OBOR: Alternative Project Funding and Delivery Methods
