Richard AmodeiSr. VP/Northeast Regional Manager,Transportation & Infrastructure DivisionSTV Inc.What global trends could make their way to the U.S. or perhaps grow in popularity?
One of the most impressive global trends — which, hopefully, will take root in the U.S. — is the level of investment other nations have been making in their infrastructure. Europe invests 5% of gross domestic product (GDP) in its infrastructure, and China invests 9%. By contrast in the U.S., total public spending on infrastructure has declined over the past four decades and now stands at 2.4% of GDP. Increased pressure on the U.S. to address its aging infrastructure and maintain its global competitiveness should demand a comprehensive strategy to reverse course — the expiration of MAP-21 in 2014 coupled with the projected bankruptcy of the Highway Trust Fund by 2015 may force this issue.
Public-private partnerships (P3) have had a lengthy and successful history, internationally, so they may be the trend that has commanded the most attention, not only in our industry, but also among elected officials and policymakers at every level of government. While Europe leads the infrastructure P3 market, you can look much closer to home for a remarkable commitment to and track record on P3 infrastructure projects. The Canadian federal and local governments have long recognized the merits of well-structured P3s, having put in place a federal program dedicated to improving the delivery of public infrastructure and achieving better value by increasing the effective use of P3s. From the Canada Line in British Columbia to the Confederation Bridge linking New Brunswick and Prince Edward Island, P3s have been playing an important role in meeting public infrastructure needs across Canada.
In Ontario, which has been a leader on P3s, the City of Ottawa is building a new light rail transit line as part of an ambitious plan to develop a world-class transportation system. STV, in a joint venture, provided preliminary engineering and continues to support this $2.1 billion design-build-maintain-finance project with project management and construction administration. And, Canada has more P3 projects in the pipeline.
Comparatively speaking, use of P3s in the U.S. is still in its infancy. But, as federal, state and local governments struggle under mounting deficits that have limited their ability to improve aging and deteriorating roads, bridges and airports, we will likely see an increase in the viability and use of P3s.
Have you seen growth in design-build? If so, how will it impact your business?
Many states have passed laws permitting design-build as an option for some or all types of design and construction, and there’s no question that the actual use of design-build has increased substantially over the past 10 or so years. Even states that have more recently enacted design-build laws have started to invoke them to deliver projects faster and more efficiently. New York State is a great example. Since passing legislation in 2011 to allow design-build for certain infrastructure projects, New York has already awarded one of the largest design-build contracts ever for the replacement of the Tappan Zee Bridge, and preliminary work on the project is getting underway.
From an industry perspective, this growing trend toward design-build seems to bode well on a number of fronts, beginning with the ability of design-build to get projects off the ground faster. In addition, the greater focus of design-build on communication efficiencies and collaboration of team members throughout the project schedule may have a spillover effect by fostering best industry practices that can be applied beyond design-build to other methods of project delivery. On a more micro-level, for design firms like STV, the design-build approach accelerates and increases opportunities nationwide and widens our pool of potential clients to include the contractor community.
What is your company’s greatest challenge?
In our industry, business relationships are a key component to success. Considerable effort goes into forming and cultivating good, productive relationships with new and existing clients and teaming partners and, more often than not, those relationships have been years in the making. The value and importance of those relationships, however, become that much more apparent when viewed in the context of the ‘Silver Tsunami,’ or the aging workforce, as leaders within our firms approach retirement age. With those impending retirements, any firm — including STV — has to consider how best to capture critical business, technical, operational and interpersonal knowledge before it is lost. When it comes to interpersonal knowledge, the question is, how do you pass on a relationship? This is a significant challenge.
The aging workforce and knowledge transfer issues implicate still another challenge: finding enough talent to meet the growing demand for mid-career level technical professionals in certain specialized areas. At STV, we have been addressing this challenge by taking a multifaceted approach that involves intelligently investing in our people through training and mentoring programs. We are also looking to the horizon for the skill sets that will be in demand, so we can best direct our training and recruitment efforts to keep pace with, and get ahead of, that demand.