July 2012

Consultant Roundtable: Industry Focusing On Gains

by Alex Roman, Managing Editor

The Burns Group
Rick Simonetta, Business Development, rail and transit

What trends are you seeing in the industry right now?
In general, there is a sense of uncertainty about long-term transit funding at the federal level and a continued concern about the economic recovery and the impact that will have on tax revenues at the state and local level. The lack of clarity on funding and the stalemate in Washington until after the November elections has frozen planning and decision-making on major capital construction projects.

Transit agencies continue to tighten budgets with service reductions, staff downsizing and fare increases. This is occurring at a time when higher gas prices and a struggling economy have increased the demand for more affordable transit options. Transit ridership has increased in each of the past several months and shows no signs of changing direction.

Capital development continues at a slower level in most systems where comprehensive programs were initiated and locally supported, or where limited federal funds have been awarded. Needless to say, competition and creativity within the consultant community has increased as a result of these market conditions. Transit systems that are able to advance projects under the current circumstances are benefiting from innovative project delivery approaches and lower construction pricing.

In what ways are consultants promoting green practices in their own businesses, as well as in transit project development?
Environmental sustainability and sustainable design are at the heart of the transit industry’s contributions to society. Our industry’s carbon footprint and energy consumption per-traveled-mile is far superior to the traditional private automobile. The promotion of these facts has begun to take shape through public advertisements and concentrated lobbying efforts. These green initiatives help promote a more sustainable environment and also help attract the top talent into our industry.

Continuing to get that message out to the public will play a significant role in the future success of our industry.

We’ve found that many green initiatives are being insisted on by the employees. The development of next generation transit professionals has created a groundswell within organizations that is helping change the culture in the consulting world. Energy control systems, alternative and sustainable energy sources, resource conservation and reduced carbon footprint have become common lexicon in the office spaces we inhabit, the modes of transportation we use and every project we now work on.

Tom Waldron, Sr. VP/Americas Director, transit & rail

Has the lack of a transportation bill started to impact your projects?
Because of the continuing resolutions keeping the current bill alive at pre-existing funding levels, we haven’t seen a widespread impact on the execution of our projects. Certainly, if the current bill were allowed to lapse, many federally funded projects would grind to a halt. What has been impacted, though, is our strategic business planning. We’re being very conservative in our approach due to the uncertainty that the lack of a long-term, well-funded transportation bill creates. It’s difficult to decide where best to invest our future focus, energy and resources when federal transportation funding priorities are not clear.

In this environment, we’ve seen agencies constantly adjusting their capital priorities. State of good repair over system expansion and lighter technologies, such as streetcars and BRT, instead of more infrastructure-intensive options, are some of the trends we’re seeing. Innovative project delivery approaches are being looked at intently, bill or no bill. Design-construct and P3, for instance, are increasingly seen as solutions for meeting transportation infrastructure needs. While these approaches hold promise to shift risk and upfront cost to the private sector, they still require a healthy share of public dollars to make them financially viable.

Of course, it’s incumbent upon all of us in the industry to adjust to market conditions. In doing so, AECOM has expanded our alternative delivery portfolio, continued our focus on modal trends and agency priorities, and have grown our presence in overseas markets where transportation funding is robust.

Other than funding, what are some key challenges the public transportation industry is facing today?
Considering the current workforce demographics, I think that workforce development needs to be at the top of the list. In both the public and private sector, we need to make sure that we’re able to attract the best and the brightest to the field, where they can have fulfilling and rewarding careers that make the world a better place. We need to invest now in the professionals and leaders of tomorrow to ensure that the growing demand for public transportation can be met for years to come. And while we must address the cultivation of the workforce of tomorrow, we must also make sure that our agencies have adequate staffing today to deliver vital services and create a forward vision. In these austere times marked by staff reductions, it has perhaps never been as difficult for them to do more with less.

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