Over the past 20 years there has been extensive debate on how we measure value for money in transport infrastructure.  Originally the focus was on whole of life costing for physical infrastructure assets with the aim of maximising cost performance.  This often drove a focus in infrastructure procurement on lowest cost and hard dollar contracting.

In the last 10 years, the focus started to shift to value for money.  Value for money evolved our thinking beyond lowest price to look at a broader definition of value.  This included collaboration, stakeholder engagement, traffic management and risk management along with other areas of non-price attributes.

More recently the focus has shifted to public value which adopts a broader focus on road transport infrastructure to consider how it contributes to liveability of the community.  This broader focus considers urban planning outcomes, environmental sustainability, social equity, diversity and inclusion, mental health, and biodiversity.

BRS recently wrote a blog on public value v value for money which works through the points above which can be found at Should Government Agencies change their approach to measuring Public Value rather than Value for Money?

This view on public value is changing the way we see commercial acumen and its important to building the capability and capacity of your staff that manage projects and budgets.  Commercial acumen is no longer about contracts, dollars and risk allocation.  It is emerging as a more mature discipline about how we maximise limited community resources to drive enhanced liveability and outcomes for the community.  Its also changing the way we see asset management.  Asset management will be under pressure to have a broader focus on maximising liveability and wellbeing outcomes.  Performance of physical assets will need to be balanced against other criteria such as active transport needs, green corridors, placemaking and public safety.

To illustrate this, it most notably proposes a number of potential opportunities for the industry in how we move forward commercially such as:

  • Treating trees, green spaces and biodiversity as assets with asset management plans, dedicated asset planners, capital works funding and maintenance operating plans;
  • Including carbon offset and minimisation in the evaluation criteria for procurement of road construction and maintenance;
  • Placing an emphasis on greenification and biodiversity into urban design standards and guidelines;
  • Implementing strategies to provide greater access for indigenous people, women, people with disabilities and people from disadvantaged social backgrounds to gain access to employment and other opportunities in the infrastructure industry;
  • Increased focus on sustainable urban outcomes into transport planning decisions and investment prioritisation;
  • Incorporating sustainability into asset management strategies and asset management plans;
  • Providing greater support for indigenous communities, women and community groups to develop entrepreneurial opportunities and obtain funding for businesses which service the infrastructure industry;
  • Factoring carbon into the calculation of the net present value (NPV) or benefit cost ratio (BCR) when developing business cases for new capital infrastructure projects;
  • Setting carbon budgets for transport and other Government agencies and measuring senior executives’ performance on achieving carbon targets;
  • Embedding sustainability in design as we have done with safety to ensure that the environment, social equity, and liveability is central to the design process;
  • Including tree planting and greenification as part of the project scope and minimum requirements for infrastructure projects;
  • Including representation of indigenous leaders on project boards and tender evaluation teams; and
  • Changing the mix of skills recruited into transport agencies with greater focus on people from a humanities, stakeholder and community background.

This evolution is an important shift in recognising a holistic approach to commercial skills required by staff who are custodians of the communities’ assets.  Incorporating these changes in society is part of the challenge in designing tender and procurement practices that drive the outcomes we are looking to see more of that deliver public value outcomes.